Long-Term Care Insurance – Do You Need It?

“There are 4 kinds of people in the world.  Those who have been caregivers, those who are currently caregivers, those who will be care givers, and those who need care givers.” – Roslynn Carter

Which one will you be?

Financial planning focuses on building and accumulating wealth for your retirement and, ultimately, the transferring of your wealth to the people that you love.

When people think about the challenges and threats to their retirements, the most commonly thought of culprit is financial losses in the stock market.  However, people typically fail to consider the risks of other types of ‘retirement invaders’ such as health care costs and long-term care costs.  Both of those situations can cause costly problems, often much more so than volatility in the stock market.

Planning for long term care is more than just more than simply planning for how to pay your bills.  From a financial planning perspective, long term care insurance planning determines how much of the monetary risk a client wants to assume versus how much they are willing to shift to an insurance company.

So what does Long-Term Care Insurance do?

1. Long-Term Care Insurance is a tool that protects your lifestyle as well as your retirement nest egg and savings.

2. Long-Term Care Insurance provides and preserves the freedom of choice as to how and where care is to be received.

3. Long-Term Care Insurance gives your loved ones peace of mind to care about you and not care for you.

One of the greatest myths about Long-Term Care is as it relates to Medicare.  Generally, Medicare does not pay for Long-Term Care.  Under limited circumstances and for a limited period of time Medicare will pay for medically necessary skilled nursing facilities or home health care. You must meet the rigorous conditions to be eligible for Medicare to cover the costs.  Most Long-Term Care is to assist people with support services, for example: activities of daily living like dressing, bathing, or using a bathroom.  Medicare does not pay for this type of care called custodial care.

4.  Those who purchase qualified Long-Term Care Insurance can take a tax deduction for part of the premium.  The tax deductibility limits for 2013 and 2014 are:

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For those who live in certain states (for example, New York), your state may provide a special tax deduction or special tax credit.

Why is it important to consider Long-Term Care Insurance now?

“Old age is like everything else, to make a success of it, you’ve got to start young.” – Theodore Roosevelt

1. Eligibility for the purchase of long term care insurance: any change in health, can impact your ability to obtain Long-Term Care Insurance.  Waiting to apply could be a very costly mistake.

2. Potential $ Savings: The younger you start Long-Term Care Insurance, the more you can save on premiums.

If you want to learn more, contact us.

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2 thoughts on “Long-Term Care Insurance – Do You Need It?

  1. karenlorenzo07 January 29, 2014 / 4:33 AM

    This is absolutely correct, people often have the misconception that the government will take care of them when they are old and when they need care, especially if they cannot afford the cost of long term care services. Some even plan for ltc when they are already 60 years old, however, health and longevity are unpredictable and who knows if we develop a condition that would require us to be ltc dependent. LTCI is not really a matter or how much it cost or who need to buy or when to buy it, but more of “is long term care insurance worth it?”. LTC insurance does not only gives us financial security but peace of mind as well..

    Like

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