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Lady Ianna,
the cash value of the life insurance policies, is an asset in the estate. The cash value should be used to pay for nursing care. If your father passes away before it is spent the remaining death benifits goes to Beneficiaries.

There are three ways to remove money from the policy. Two ways are tax free.
1. The basis of the policy, which is the money paid in premiums, can be withdrawn tax free.
2. You can get loans secured by the cash value which are tax free. Insurance companies expect you to borrow money on the policy under your father's situation. It is like a construction loan. Your need $240,000 for nursing care plus a 5% interest reserve for 24 months.
3. The third way to get fumds is a taxable withdrawal. That makes sense if the health care deductible exceeds the interest expense.

Do not pay of the loans. There is no benefit to the beneficiaries. Your father provided for the family and now you use the insurance to pay for long term care.

Call a fee based advisor who will for $500 advise you.
Redondo Beach Mike
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