Investment News just put out an article on how some savvy financial advisers and their clients are using some of their HSA funds to cover part of their long term care insurance premiums. Read It Here (New Window)

Is That Allowed By The IRS?

It's not carte blanche by any means and according their article:

"...clients may cover LTC insurance contracts with the balance in their HSAs with certain limitations. The insurance must cover only qualified services such as diagnostic, therapeutic and personal-care services, and the contract can't provide a surrender value or reimburse expenses that otherwise would be reimbursed by Medicare."

But that is still a lot better than paying all of your long term care insurance premiums out of your own IRA with post tax dollars. Aside from the tax benefits, the the long term care insurance will actually cost less because the premiums are paid pretax.

Because we are not financial advisers, we'd suggest you talk to yours before implementing any investment strategy. But when you are ready:

Get a free, no-obligation comparison quote for Long Term Care insurance