What Is Long-Term Care?
Long-term care (LTC) goes beyond medical care to include all the assistance you could need if you ever have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time (longer than 90 days). While older people generally require the most long-term care services, 40% of long-term care claims are paid to someone under the age of 64.* A young or middle-aged person who has suffered a debilitating illness or accident may also require care.
Where Can You Receive Care?
- At home
- Assisted-living facility
- Services in community facilities
- Skilled nursing facility
Ways to Fund Your Long-Term Care Plan
Traditional LTC Insurance
These policies offer flexibility in benefits to help you design a plan that address your specific needs. It also may limit out-of-pocket expenses. Good health and partner discounts help reduce the cost of these premiums. Traditional LTC insurance policies may qualify for your state’s Partnership Program, which means that every dollar in benefits paid from a long-term care policy will allow you to protect a dollar of your assets should you ever need to qualify for Medicaid. Please consult with your financial advisor on how the Partnership Program may benefit you. All traditional LTC products that LPL Insurance Associates offer are tax qualified; however, not all premiums are tax deductible.
Life Insurance with LTC Riders
Many insurance carriers are now offering a long-term care rider that acts as an added benefit to a permanent life insurance product. This type of policy is advantageous for those clients who are primarily looking for life insurance, because they are actually securing two forms of insurance in one package. Long-term care riders come at a cost and they allow you to use a percentage of your death benefit should you require long-term care instead.
Single Premium Life/Long-Term Care Insurance
These product options, also known as linked benefit products, may be your best option to self-insure. This product offers a simplified application process for life and long-term care. In the event you do not require long-term care, the death benefit will be paid income tax-free to your requested beneficiaries. Such products may also include Return of Premium features that returns the premiums paid for coverage if you survive the policy’s terms. Such producers may also include a return of premium feature. At any time you can request a return of premium upon full surrender of the policy. The amount received will be adjusted for any benefits paid and any loans and cash withdrawals, and it may have tax implications.
Source: LPL Financial – Guide to Long-Term Care Insurance
Please keep in mind insurance companies alone determine insurability, and some people, for their own health or lifestyle reasons, are deemed uninsurable.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Riders are additional guarantee options that are available to an annuity or life insurance contract holder. Some riders are part of an existing contract, many others may carry additional charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.