According to LTCI specialists, more and more people are considering universal life insurance policies combined with a long term care (LTC) rider. Unlike the standard LTCI policy, hybrid life insurance polices provide LTC coverage and death benefits. So apart from receiving access to quality care you won’t leave your family penniless later on since your unused benefits will go directly to them.

Such LTC plan is tempting, isn’t it? Hybrid life insurance policies with LTC rider are unfortunately more expensive than traditional LTCI policies as they provide monetary benefits not only to the policyholders but their families, as well. Despite being pricier, reports have it that a big percentage of Americans between 45 and 64 are dead serious about getting hold of this type of insurance product.

However ideal it seems to have a life insurance policy fused with LTC benefits, experts advise buyers to weigh their other options very well before putting their money on this product. Remember that you are investing your money into an LTC plan to spare yourself and your family from huge nursing home or in-home care expenses in the future without compromising your health care needs.

If you go for a very expensive plan without giving it much thought, it won’t take long before you wipe out your assets to the price of your coverage.

More Long Term Care in the News

Apart from various platforms for LTC planning, today’s news also focuses on in-home care as this happens to be the preference of 90% of the population past the age of 50. Fresh home care programs have been introduced by public and private LTC agencies to make better caregivers out of family members without depriving them of their own lives and health care needs.

It’s common knowledge that a greater percentage of in-home care recipients are depending on their loved ones for care as they have failed to come up with an effective LTC plan. Unfortunately, majority of the country’s informal caregivers are at risk of health disorders which will later require years of care.

Most women take on the responsibilities of a caregiver once someone in the family starts to require LTC. They wouldn’t hesitate to leave their jobs if only to be able to provide the needs of their loved ones round the clock.

Statistics reveal, however, that less than 40% women in the country have LTCI policies. According to the U.S. Department of Health and Human Services, women are more likely to require higher levels of care than men and thus the former should prioritize their LTC plans.

Paying taxes leads to the construction of more highways and freeways, better education for children, topnotch health care, and maintenance of peace and order in the country. Still no one can argue with the fact that tax rates are burdensome especially to most Americans who are just regular employees.

Good thing that people have the freedom to reduce the amount of taxes that they pay annually. They simply have to plan their future health care needs via LTCI policies and the amount of premium that they pay into their personal coverage or a loved one’s shall be tax deductible since LTCI premiums are treated as medical expenses by the Internal Revenue Services (IRS).

To find out how much of his LTCI premium shall be tax deductible, the insured individual can simply check the deductible limit table of the Internal Revenue Code 213(d). This table consists of the age bracket of taxpayers and their corresponding tax deductible limit. Each year, the amount of deductibles increases to keep pace with inflation.

For example, if a person is 45 years old at the end of the taxable year then his paid premium amounting to $660 will be treated as a deductible. Meanwhile, a 70-year-old policyholder’s corresponding deductible limit would be $3,500. The older the insured gets, the higher his tax deduction becomes.

Long Term Care Tax Breaks

Suppose your parents were not able to plan their LTC so now you are footing your mother’s in-home care expenses and occasional trips to a nursing home. Do not fret because the money that you pay into the LTC services that she acquires is treated as a medical expense.

The IRS says you can treat your LTC expenses and that of your loved ones which exceed 10% of your adjusted gross income (AGI) as tax deductible; this tax deduction rate is a big jump from last year’s 7.5%.

For instance, your mother attends physical therapy in a nursing home and makes trips to a nearby hospital for her doctor checkup. Apart from the therapy charges and doctor fees, your transportation fare to and from the nursing home and hospital are all considered as medical expenses, too, and thus deductible from your taxes.

Now if your AGI is $65,000 and your total expenses on your mother’s LTC for that year amount to $7,000 then you can deduct this much from your income tax as it exceeds 10% of your AGI.

Private insurance companies that sell LTCI policies teamed up with government agencies advocating quality health care for the elderly and disabled to be able to come up with the Partnership Program. This LTCI project aims to encourage everybody to plan their future health care needs because the youngest baby boomer is turning 65 soon and yet only a fraction of the elderly population has successfully secured LTCI policies.

Without a definite long term care (LTC) plan an individual cannot possibly acquire quality care, but in case he does manage to get it there’s more likelihood that it’s going to be irregular.

The Partnership Program is relatively new in the LTCI industry but policies under this program are much appreciated by the public as these offer affordability and supplemental coverage from Medicaid.

Medicaid by nature does not provide LTC coverage to individuals earning a good income since it is primarily intended for the very poor; those whose monthly and annual income falls below the poverty line. If a middle-class American wishes to avail Medicaid coverage he has to spend down his assets first up to a certain amount which is required in his state of residence.

However, through the Partnership Program an insured individual can be assured that once he has exhausted all of the benefits of his policy he can apply for Medicaid without complying with the said health insurance program’s spend-down rule. A portion of his assets which is equivalent to the total amount of benefits that he received from his policy shall be automatically exempted.

So, people are given a choice. They can either receive Medicaid assistance instantly by depleting their assets or use it as supplemental coverage through a Partnership qualified LTCI policy.

Long Term Care Partnership States and What You Need to Know

Before you buy a Partnership LTCI policy you have to decide first where you wish to retire and receive care in the future because each state has its own set of rules with regards to the Partnership Program.

For instance, some states would require Partnership policies to have a maximum and minimum benefit period but in others this is not a requirement. If your state of residence does not apply this you could encounter major problems should you relocate to a state which does.

Aside from that, you also have to know which states are participating in the Partnership Program’s reciprocity agreement so that you will be able to receive the same Medicaid asset protection and other benefits that are stipulated in your Partnership LTCI policy. If you wind up in a state that does not participate in the reciprocity agreement, your eligibility for benefits could be questioned.

Long term care insurance (LTCI) provides so many benefits which an individual will never be able to get from his health insurance policy. While the latter offers limited dental, vision and other forms of medical care, LTCI polices provide a wide range of services to people in need of custodial and medical care.

So we start with custodial care, a term which is seemingly useful only in the long term care (LTC) industry. It refers to personal care or assistance which is provided to people who cannot perform the most basic activities of daily living (ADL) due to a disability, an injury or infirmity. Recipients of custodial care are not necessarily in nursing homes. As a matter of fact, a bigger percentage of them can be found in their own homes because apart from the daily assistance that they receive from a home health aide there is nothing else that they need as of the moment.

You have probably noticed the mention of activities of daily living or ADL above. This term is also famous in the area of LTC because it is the basis for determining one’s eligibility for care. Policyholders need to satisfy the benefit triggers of their LTCI contracts and these are almost always the six ADLs which are eating, bathing, toileting, dressing, continence, and transferring.

Different circumstances can lead to one’s inability to do any of the six ADLs so when negotiating for your policy ask your LTCI representative which of these circumstances shall qualify you for your LTCI policy’s benefits. Most companies will not count attempted suicide and drug addiction as valid.

Long Term Care Glossary

Aside from helping you grasp the industry’s language, an LTC glossary will also guide you as you work on your LTCI policy for it contains the four major components of a policy which are the maximum monthly/daily benefit amount, period of coverage, inflation protection rider, and the elimination or waiting period.

It is necessary to learn these four important factors by heart because the amount of your annual premium will depend on them.

Your maximum benefit amount is the highest amount of benefits that you will receive from your policy and this can be paid to you daily or monthly. The period of coverage which is popularly known as the maximum benefit period refers to the length of time that you will receive coverage from your policy.

Meanwhile, having an inflation protection will keep your policy’s benefits at pace with annual inflation. Elimination period, on the other hand, pertains to the length of time in which you have to pay for the LTC services that you acquire using your own money.

Even though in-home care is highly in demand in the U.S., experts on the field of LTC discourage people from disregarding other settings such as nursing homes, assisted living facilities, and adult day health care centers among others because if they wind up needing any of these facilities in the future it will cost them a fortune.

As one moves towards the retirement age he should stop letting that whatever-is-God’s-will belief run on his head because it will only get him nowhere. God, after all, gives people freewill so why not use this gift properly? If you turn out to be among the 40% Americans who will need nursing home care someday, you have to be financially ready because this will cost you a lot of money.

Of course, it is difficult to say whether or not you will enter a nursing home or another type of LTC facility for that matter especially if you are very young at present. However, you can anticipate it for as long as you are not clueless about the present state of your health. Planning your LTC entails research so take time to visit your doctor and study your family’s health history as this has a lot to do with your future health care requirements.

Long Term Care Facilities

Most people are full of procrastination especially when it comes to the area of LTC. They think 80 or 90 years old is far down the road so they have more than enough time to plan their future health care needs. They are not thinking of all the possibilities like what if an event in their life would subject them to LTC earlier than they planned?

Aside from infirmity resulting form old age, an accident or an illness can also lead to a person’s need for LTC. To be safe why not plan your LTC earlier like a decade before the year that you plan to retire? By doing so, you can ensure yourself of quality care someday as well as financial protection.

Without a clear or definite plan for your LTC you could end up like many Americans who are not only on the receiving end of mediocre LTC services, but whose families are now trapped in debt. Anyone who chooses to self-insure is headed for the road to impoverishment because a year’s stay in a nursing home would cost $77,745 while an assisted living facility’s annual cost is $39,135.

By planning your LTC carefully you will be able to receive care in whichever setting that you prefer without being dependent on your loved ones. You can stay as long as you want in your own house without your spouse and kids feeling pressured to quit their jobs just so they can provide you with care round the clock.