Senate Bill Would Allow 401(k) Distributions for Long-Term-Care Insurance

Long-term care insurance could be purchased using funds accumulated in tax-advantaged 401(k) and 403(b) retirement accounts under terms of a new bill introduced in the U.S. Senate.

Sponsored by Sen. George Allen, R-Va., the Long-Term Care Act seeks to raise the proportion of Americans who purchase long-term care coverage from the current level of 6%, as well as to induce more consumers to purchase the coverage at earlier ages, Allen said in introducing the legislation. Under terms of the bill, individuals would be free to use pretax dollars to pay long-term care premiums for policies covering themselves or their spouses without any early withdrawal penalty.

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Senate Bill Would Allow 401(k) distributions for Long-Term-Care Insurance
Source: A.M. Best