Frequently Asked Questions
Long Term Care is broadly defined as skilled or custodial care that is required for greater than 90 days. The overwhelming majority of Long Term Care is custodial.
How much does Long Term Care Insurance cost?
Over the course of your lifetime, the total Long Term Care Insurance (LTCi) premiums paid will cost less than one year of care itself.
LTCi premiums can range depending on your age, health, marital status and plan design. LTCi policies are custom designed to fit your particular needs. Our goal is to help you obtain the right amount of coverage with a reputable carrier for the least amount of premium.
When is the right age to purchase Long Term Care insurance?
Some believe that you are never too young to consider the consequences of Long Term Care, given the large number of people under aged 65 that require care. The general consensus appears to be that anyone who is in their 40's, 50's or 60's and has assets to protect should at least learn the facts so that they can decide if LTCi is appropriate for them. The younger and healthier you are, the lower your premiums will be. Your health rating and age are then locked in for the duration of the policy.
What are the alternatives to Long Term Care Insurance?
There are really only three alternatives to Long Term Care Insurance when you need care. You may be able to have family members or friends care for you, pay out of pocket for In-Home or Facility care, or impoverish yourself to the point of qualifying for Medi-Cal (Medicaid in other states).
What if I buy this insurance and never use it?
That is probably the best possible outcome. There are optional riders available on most policies that offer a return of premium but the reason to purchase this insurance is if something happens, not if it doesn't. Most people hope they will never need to use their homeowner's or any other insurance. Typically Insurance is there to pay when something bad happens and the reason to purchase the Insurance is if the consequences of that event relative to the likelihood of its occurrence are significant enough.
If I have a policy, how do I become eligible to go on claim?
Once your doctor determines that you will require assistance with 2 or more activities of daily living or have a severe cognitive impairment, you immediately become eligible. The six activities of daily living are: eating, bathing, dressing, toileting, transferring and continence. Most policies have some type of elimination period or waiting period that you need to satisfy before the policy starts paying. Some policies waive the elimination period for home care.
Are my premiums tax-deductible?
Yes, if you purchase a “Tax Qualified Long Term Care Insurance Policy”.
Individuals can deduct a limited amount of the annual premium based on age under health expenses on Schedule A of the federal tax return.
Business owners can deduct premiums as business expense. The amount changes according to the type of business (Partnership, Sole-Proprietor, C-Corp, etc.).
Please visit “TAX SAVINGS TIP” page for more information. To request your free copy of the Tax Summary for Tax Qualified Long-Term Care Insurance click here.
Long Term Disability versus Long Term Care Insurance, what is the difference?
The purpose of Long Term Disability Insurance (LTD) is to replace income. LTD is purchased as a percentage of income and you must prove income in order to purchase. When collecting LTD benefits, the purpose most likely is to pay the mortgage and monthly expenses that continue even if you are unable to work. LTD benefits are paid as a lump sum each month. Most LTD policies cancel at age 65 and claim benefits will also stop.
The purpose Long Term Care Insurance (LTCi) is to pay for caregivers at home, or to pay a long term care facility. LTCi cannot be canceled as long as you pay your premiums, regardless of age. There is NO income verification when you purchase LTCi and you can purchase the amount you wish. Benefits are typically paid as reimbursement and claims are paid until the policy limits (which you selected) are reached regardless of age.
Where can I get the best price on a Long Term Care Insurance Policy?
Long Term Care Insurance Policy prices are set by the carriers and approved state. All agents who represent a given carrier have access to the same plans at the same rates from that carrier. The insurance companies must submit their rate schedule for each product to each state for approval. You cannot shop for the best price, only for the best advice.
Please contact us for more information or for the current age-based tax limits. Always consult a tax advisor for details for your specific situation.