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Beware the lure of Long-Term Care Insurance
Policies funded by Reverse Mortgages
ONTARIO, Calif., Feb. 19 /PRNewswire/ -- Every day, baby
boomers are turning 60, says Frank N. Darras,
the nation's leading disability and
long-term care insurance lawyer. 75 million
Americans over 50 are being aggressively
targeted as potential new customers and
every year, this number increases by 4
million.
With 75 million potential new customers the insurance industry is
creating a variety of feature-rich,
long-term care insurance policies funded by
reverse mortgages so seniors can afford to
make the high premium payments," says Darras.
See
http://www.darrasnews.com/.
"Not so fast," warns Darras.
There are ways to get a reverse mortgage and there are limits as
well. If you have built up equity in your
home, you can convert a portion of that
equity into cash.
The equity built up over years of home mortgage payments can be
paid to you. Unlike a traditional home
mortgage or a second trust deed, no
repayment is required with a reverse
mortgage until the borrower(s) no longer use
the home as their principal residence.
"Betting your house on an insurance policy can backfire and leave
you with nothing," says Darras.
Darras explains, Just Say No:
If you get a value on your house and agree to receive a monthly
payment for 10 years, that sounds okay. You
live longer than those 10 years. Since you
continued to live, you used up the
allowance.
Suddenly, you have no house, no money and no where to live and
nothing to leave to your heirs. This can
happen to you, even with payments as little
as $200 per month.
Lenders promise, "No payments as long as you occupy the home." You
need to understand what that means, says
Darras. When they say tax free, you may not
pay taxes for selling the house, but you
still must pay social security, Medicare and
property tax.
The reverse mortgage is based on your age and value of your home.
You retain the title until your contract
expires, then you may lose your home.
Some policies say that borrower's heirs retain 100% of the unused
equity. Your heirs may have to come up with
the money you used while living, to receive
any equity at all!
"Every year, Generation X, Baby Boomers and Senior Boomers pay
billions of dollars in insurance premiums;
Be careful before you sign and remember to
always get competent, free legal advice and
never ever bet your house on an insurance
policy," says Darras.
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