Overview of Long Term Care Insurance

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Long-Term Care Insurance Services

The phrase "long-term care" refers to the help that people with chronic illnesses, disabilities or other conditions need on a daily basis over an extended period of time. The type of help needed can range from assistance with simple activities (such as bathing, dressing and eating) to skilled care that's provided by nurses, therapists or other professionals.


Employer-based health coverage will not pay for daily, extended care services. Medicare will cover a short stay in a nursing home, or a limited amount of at-home care, but only under very strict conditions. To help cover potential long-term care expenses, some people choose to buy long-term care insurance.

Policies offer many different coverage options. Since you can't predict what your future long-term care needs will be, you may want to buy a policy with flexible options. Depending on the policy options you select, long-term care insurance can help you pay for the care you need, whether you are living at home or in an assisted living facility or nursing home. The insurance might also pay expenses for care coordination and other services. Some policies will even help pay costs associated with modifying your home so you can keep living in it safely.


Factors to Consider

Your Age and Health


Policies cost less if purchased when you're younger and in good health. If you're older or have a serious health condition, you may not be able to get coverage — and if you do, you may have to spend considerably more.

Your Support System


You may have family and friends who can provide some of your long-term care should you need it. Think about whether or not you would want their help and how much you can reasonably expect from them.

Your Savings and Investments


A financial adviser — or a lawyer who specializes in elder law or estate planning — can advise you about ways to save for future long-term care expenses and the pros and cons of purchasing long-term care insurance.

The Premiums


Traditional long term care insurance consists of an annual premium, for a predetermined future benefit of long term care insurance. Inflation riders can be added to increase this coverage over time. There have been changes in the industry to reduce increases of premium, however this does not guarantee against an increase. At Affordable Long Term Care Insurance you will be working with a Certified Financial Planner to design an affordable policy to meet your needs.

Your Income


If you have difficulty paying your bills now or are concerned about paying them in the years ahead, when you may have fewer assets, spending thousands of dollars a year for a long-term care policy might not make sense. If your income is low and you have few assets when you need care, you might quickly qualify for Medicaid. (Medicaid pays for nursing home care; in most states it will also cover a limited amount of at-home care.) Unfortunately, in order to qualify for Medicaid you must first exhaust almost all your resources and meet Medicaid's other eligibility requirements.

Your Taxes


The benefits paid out through a long-term care policy are generally not taxed as income. Also, most policies sold today are "tax-qualified" by federal standards. This means if you itemize deductions and have medical costs in excess of 7.5 percent of your adjusted gross income you can deduct the value of the premiums from your federal income taxes. The amount of the federal deduction depends on your age. Many states also offer limited tax deductions or credits.

"Susan and her team were so helpful and attentive in helping me navigate through the options in the long term care market. Highly recommended!"

-Lindsay Brown

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Long-term Care Policy Sources

Traditional Long Term Care Insurance

Traditional Long Term Care

The most affordable and popular long term care insurance.

Hybrid or Asset Based Policies

Hybrid or Asset Based Policies

Attempts to combat concerns about traditional long-term care insurance have resulted in combination or hybrid products using an asset-based approach to fund long-term care. These new approaches generally combine long-term care funding with life insurance or an annuity.

Short-Term or Critical Care Insurance

Short-Term or Critical Care

Ideal for older individuals who may have some health challenges.

Frequently Asked Questions

What Does Long Term Care Insurance Cost?

Long term care insurance rates vary. According to the 2012 long term care insurance Price Index the costs for LTC insurance can vary significantly. Age 55, standard health rate. Initial policy benefit for EACH is $164,000 based on a Daily benefit of $150 and 3 year benefit period.

Can you deduct long term care insurance premiums?

Premiums for "qualified" long-term care insurance policies are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 10 percent of the insured's adjusted gross income, or 7.5 percent for taxpayers 65 and older

What does long term care insurance pay for?

Long-term care insurance can cover home care, assisted living, respite care, hospice care, nursing home, Alzheimer's facilities, and home modification to accommodate disabilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed.

Is there an age limit for long term care insurance?

Long term care (LTC) insurance companies do not necessarily have an age limit, however, if you wait to buy long term care insurance the cost of premiums will increase every year since premiums are based on age, in addition, the chances of being denied a long term care insurance goes up as you get older.

Can you buy long term care insurance at 80 years old?

Long Term Care Insurance For 85-Year Olds. ... According to the Association's examination of long term care insurers offering coverage to those over age 80, a single individual who could meet the health qualifications could expect to pay around $11,000 per year for a policy that would pay around $164,000 in benefits.

Can you get long term care insurance with a pre existing condition?

However, the company may not pay benefits for long-term care related to that condition for a period after the policy goes into effect, usually six months. Some companies have longer pre-existing condition periods or none at all. Long-term care insurance is available to you in several different forms.

Can you write off long term care insurance?

If you have a tax-qualified long-term-care insurance policy, you can count a portion of the premium as a tax-deductible medical expense. Medical expenses are deductible to the extent they exceed 10% of your adjusted gross income (or more than 7.5% of AGI if you're 65 or older).

Is long term care insurance considered income?

Since amounts received for personal injuries and sickness are generally not includible in gross income, benefits received under qualified long-term care insurance are generally not taxable. But there is a limit on the amount of qualified long-term care benefits that may be excluded from income.

Do assisted living facilities accept long term care insurance?

It covers home care and home health care services, assisted living, respite care, hospice care, nursing home and Alzheimer's facilities. Not all long-term care insurance policies cover all services, nor do they all pay the same for similar services.

Is assisted living considered a long term care facility?

Nursing homes, skilled nursing facilities, and assisted living facilities, (collectively known as long-term care facilities, LTCFs) provide a variety of services, both medical and personal care, to people who are unable to manage independently in the community.

How does medicaid work for long term care?

Medicare covers only up to 100 days of "skilled nursing care" per illness. ... The care in the nursing home must be for the same condition as the hospital stay. You need to be broke to qualify for Medicaid. Medicaid helps needy individuals pay for long-term care, but you do not need to be completely destitute to qualify.

Who is in need of long term care?

Long term care is care that you need if you can no longer perform everyday tasks (activities of daily living) by yourself due to a chronic illness, injury, disability or the aging process. Long term care also includes the supervision you might need due to a severe cognitive impairment (such as Alzheimer's disease).

What does it mean to be self insured?

Self-insurance refers to funding the expenses of long term care through assets and other financial resources that a person owns. One method of self-insurance is accumulating savings and later using this saved money for long term care expenses, including buying medications or paying caregiver service fees.

In fact, paying out-of-pocket is advisable for people whose assets, including the home, are worth over $2.5 million. Self-insuring can be effective in states with relatively low costs of skilled nursing care, assisted living, and home health care. Wealthy individuals who live in certain areas with more affordable long term care can also consider this approach.

What is long term care insurance and who needs it?

This type of policy covers basic daily needs over an extended time. While health care insurance or Medicare helps pay for immediate medical expenses, say, a surgeon's bill, long-term-care insurance helps people cope with the cost of chronic illnesses, such as Alzheimer's disease, or various disabilities.

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