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Long-Term Care Insurance

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.

* U.S. Government Accountability Office

You may require long-term care due to:

  • Dementia/Alzheimer’s
  • Stroke
  • Complications with diabetes
  • Other chronic conditions

Where Can You Receive Care?

  • At home
  • Assisted living facility
  • Services in community facilities
  • Skilled nursing facility

What is Your Plan Should You Need Care?

By allocating nothing for long-term care, you could be risking retirement assets. With the help of your family and your financial advisor, you can create a written plan that seeks to ensure care for yourself today and in the future.

Things you should consider

  • Who would you want to care for you? Your children, your spouse, a qualified professional, a nurse? How would this affect the lives of your loved ones and family?
  • Where would you like to receive the care? Your home, an assisted living facility, a community center, a nursing facility, your child’s home?
  • How will you pay for your care? With your own assets? If so, which asset would you use first? Are they in taxable accounts? Are the assets liquid? Would you use a long-term care insurance policy?

Why is Planning Important?

Needing long-term care puts an enormous emotional and physical strain on your loved ones and family members. By planning ahead of time, you can help manage this burden. Also, as you age, your health may change, which could make it difficult to get coverage in the future. This is why it’s important to start planning now while you have the most options.

Would Healthcare Insurance or Medicare Cover These Costs?

Healthcare, including Medicare, pays for skilled or rehabilitative services only, and it doesn’t cover custodial care. Medicare may cover a portion of the first 100 days of care received at a nursing facility if specific program requirements are met. After the first 100 days, you’ll have to cover your own costs.

Medicaid is the joint federal and state welfare program for those with low income and limited financial resources. Eligibility restrictions such as gifting money to loved ones, transferring assets into trusts, and creating promissory notes make it increasingly difficult to qualify for this program.

Ways to Fund Your Long-Term Care Plan

Traditional LTC Insurance

These policies offer flexibility in benefits to help you design a plan that addresses 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 Cetera 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’re actually addressing 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 an appropriate option to self-insure. This product offers a simplified application process for life and long-term care. In the event you don’t 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. Note: It may have tax implications.

We can work with you to design a Long-Term Care Insurance plan to provide the most economical protection for your specific needs. For more information on Long-Term Care Insurance, please contact us today.

Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices.

This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.

Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing.

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