5 Reasons for Considering LTC Insurance

Posted on

Mar 04, 2012


Florida - Southwest

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As a Nation, improved longevity is a reality. Enhanced medical care, better diet and exercise, and less invasive medical technology are adding years to our lives. Living longer is a blessing but can propose significant financial worries.
Here are the main reasons to consider protecting yourself by investing in Long-Term Care insurance.
The odds are in your favor that you will need it.
The cost of care is steadily rising.
Family member cannot be counted on. Family sizes are shrinking.
Self-insuring is not a reasonable option.
The Government will be trimming benefits, not enhancing them. Assistance is currently being scrutinized for a reduction. The Medicaid program is even more fragile.
The Long-Term Care plans offered today have many options and innovative benefit parameters to help put together an affordable policy to offset these financial woes. There are even plans that offer your premiums back. Regardless of how you tackle this problem, you must act before a health problem arises. It is MUCH less expensive to seek this protection BEFORE poor health makes it difficult or impossible to purchase.
You will never save money by waiting until you are older, even though you will pay premiums longer statistically before you need the benefit. And the healthier you are the less you will have to pay for premiums. Be smart, plan ahead.
Editors Note: This article was submitted by Rosemarie Hurley, President of Senior Insurance Solutions, 239-274-6678, www.longtermcareinsurance-online.com

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What to Know About Long-term Care Medicaid

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Deducting Long-Term Care Insurance Premiums in 2023

Are you a taxpayer who has purchased long-term care insurance (LTCI)? Take note of your policy details and your premium amount, as you may be able to deduct the cost or at least part of it from your 2023 income.If your total eligible medical expenses (including your LTCI policy premium) for the year exceed 7.5 percent of your adjusted gross income, you may be able to take the amount of your LTCI policy premium as a deduction on your federal income tax return.However, note that only certain LTCI policies qualify.What Is Long-Term Care Insurance, and Do I Need It?Long-term care insurance helps you cover costs for services you'll likely need as you grow older, such as nursing home care or home health care.According to LongTermCare.gov, U.S. seniors aged 65 today face a nearly 70 percent chance of requiring some form of long-term care later in life. In fact, almost a fifth of them will need it for more than five years.Policies for this type of insurance can vary dramatically. Most will provide you with between $2,000 and $10,000 in funds each month, with premiums costing up to $5,000 a year. The younger you are when you purchase LTCI, the less pricey your annual premiums will generally be.Keep in mind, too, that the average prices for long-term care have skyrocketed over time. For example, a private room in a nursing home will currently cost you more than $9,000 a month on average.Unless you have very significant wealth, paying for LTCI may be well worth the cost, given how quickly long-term care can drain your retirement savings.Can I Deduct My Long-Term Care Insurance Premium?As mentioned above, only certain LTCI policies are tax-deductible. If your LTCI policy is considered qualified for tax deductibility, your total eligible medical expenses (including your LTCI policy premium) for the year also need to exceed 7.5 percent of your adjusted gross income in order for you to be able to deduct your premium.In addition, you're limited in how large a premium you can deduct. Read more about these caveats below:1. Tax-Qualified Policies  To qualify for tax deductibility, your LTCI policy is required to meet specific rules, as outlined by the National Association of Insurance Commissioners (NAIC).If you purchased your policy before January 1, 1997, it's likely qualified. (Double-check with your insurance broker or their states insurance commission.)Policies purchased on or after January 1, 1997, have to meet a number of federal standards. Learn more about these standards on Page 9 of the NAICs Shoppers Guide to Long-Term Care Insurance, available in PDF format.2. Deduction Limits  The limit on your deduction depends on your age at years end. The IRS annually issues adjustments to these limits; it increased the 2023 tax-deductible limits by about 6 percent since 2022.Note that if your annual premium amount for 2023 exceeds the limit provided in the table that follows, it won't be considered a medical expense:Attained age before the close of the taxable yearMaximum deductionAge 40 or under$480 (up from $450)Age 41 to 50$890 (up from $850)Age 51 to 60$1,790 (up from $1,690)Age 61 to 70$4,770 (up from $4,510)Age 71 and over$5,960 (up from $5,640) 3. Other CaveatsIf you're self-employed, you can take the amount of the policy premium as a deduction if you made a net profit. Your medical expenses don't necessarily need to have exceeded 7.5 percent of your income.Most hybrid life insurance policies are typically ineligible for tax deductions.Note as well that benefits from per diem or indemnity policies, which pay a predetermined amount each day, aren't included in income except amounts that exceed the beneficiarys total qualified long-term care expenses or $420 per day (for 2023), whichever is greater.For further details on these and other inflation adjustments, access the complete PDF from the IRS website.Additional ResourcesTo get an idea of how much long-term care may cost you, visit Genworths Cost of Care online tool to calculate the cost of care where you live.Be sure to seek out information from a professional when it comes to evaluating your long-term care insurance needs as well as protecting your loved ones assets in the event that you do require long-term care. Find a qualified elder attorney near you.

Older Adults Lack Information in Search for Long-Term Care

According to a recent national study, nearly a quarter of Americans aged 50 and older say they or a loved one needed long-term care in 2022. The findings further suggest that seniors and their caregivers could benefit from more consumer-friendly information and guidance about long-term care services, a need researchers say will grow exponentially in the future.Finding Long-Term Care Causes Wide-Ranging EmotionsResults showed that people looking for long-term care experienced a range of emotional responses in searching for a provider:53 percent of respondents reported feeling anxious about the process 52 percent described feeling frustration23 percent said they were confident during the process of long-term care for themselves or their loved one23 percent of respondents felt at peace about the choice they made for long-term careOnly 14 percent of respondents reported feeling happyRespondents Want to Feel Prepared When Deciding on Long-Term CareResearchers found that respondents want advice for seeking long-term care when it comes to the following:92 percent wanted to know what types of long-term care services are available90 percent wanted more information about paying for long-term care90 percent said advice and support on long-term care would have been helpful to them88 percent needed help understanding whether their personal or health care needs require long-term care88 percent of those surveyed also said they needed help choosing a long-term care provider86 percent said having someone to listen to them when seeking long-term care services would have been important to them84 percent of respondents wanted help deciding whether to pursue in-home care or community-based services (i.e., nursing home care)Paying for Long-Term CareA large number of respondents reported needing more information about how to pay for long-term care.Of the people who were surveyed, 63 percent said it was extremely important to have additional details about the various types of care options available. Meanwhile, 69 percent said it was extremely important to have further details about the cost of care and their payment options.Who Participated in the Survey?The survey featured responses from a nationally representative sample of more than 1,000 participants with annual household incomes ranging from under $30,000 to more than $100,000. Responses were collected in November 2022.Respondents, all aged 50 and older, were 53 percent female and 47 percent male, and represented the following regions across the United States:South 38 percentWest 23 percentMidwest 21 percentNortheast 18 percentNORC at the University of Chicago conducted the survey, which was commissioned by think tank Nexus Insights.Can This Problem be Solved?In a separate Nexus Insights report from September 2022, experts called for the creation of information hubs where seniors and their caregivers can find the resources they need to answer their questions regarding long-term care.The report also outlined seven criteria defining these proposed navigational hubs:AccessibilityConsistency in services across the countryLocal focus with a deep understanding of each communitys programs and providersVisibility among its target usersFreedom from incentives that would promote specific service providersUnbiased adviceFull serviceTo learn more about long-term care services and options, find a qualified elder law attorney in your area.