FAQ & Advice on Long Term Care Insurance

Why should I buy LTC Insurance?

Majority of Americans hit a point where they won’t be able to take care of themselves and even their families anymore.This could be as a result of diseases such as heart attack, Alzheimer’s, and cancer. Advancement in technology in the field of medicine has played a major role in increasing life expectancy thus elevating the need of LTC. Americans aged over 65 face have a 50% chance of being admitted into a care facility.The care cost in an average nursing home was over $85,000 back in 2012. In some parts of the nation such as Coastal California and the Northeast, that could go up to over $220,000.

Is LTC Insurance a bad or good investment?

Many people tend to think that buying Long Term Care Insurance is making the wrong type of investment. The reality of it though is that LTC Insurance helps safeguard your retirement future, as well as that of your family. If you’re seeking your advice on LTC from financial advisors, take heed. Most of these are simply not experts in the Long Term Care domain. They understand the general idea, but do not have a breakdown of the risks, pros and cons involved.

Let’s do some breakdown.

A 47 year old American mom subscribed to LTC and paid less than $1900 in premiums per year. After 6 years, she got injured from a fall and ended up needing a knee-replacement surgical operation. Assuming she’ll live up to the life expectancy for women (80 years), and her LTC policy pays maximum benefit schedule, this is how it adds up.

In total, she’s paid no more than $11,400 over the 6 years she was paying premiums. However, she will receive over $2,210,000 in expense coverage from the insurance provider.

What’s the most popular average daily benefit that people select?

The average rates most people choose vary depending on the part of the nation where they live. It’s important to familiarize yourself with care costs in your region before you answer the big decision regarding LTC insurance benefits.The rate ranges from $130 per day up to $300 a day which can be a bit high for some people.

Note: some local agents who book appointments to your home may attempt to scare you with huge figures reflecting the cost of care in the country. In response, you might feel inclined to buy ‘enough’ LTC coverage. Keep in mind though that most times, you’re just better off with a modest level of coverage.

Which is the average yearly cost for care in assisted living facilities?

Assisted living centers are less costly than nursing centers and other medical care facilities. According to Argentum.org, a one-bedroom private apartment goes for about $3000 per month. However, this cost is going up since baby boomers are retiring at incredible rates. This has gravitated to an increased demand, limited supply kind of situation. Realistically, you can expect the cost of care at assisted living facilities to considerably go up. This is yet another reason why you should only settle on an LTC policy that has sensible inflation protection.

FAQ: How do I identify the best LTC insurance firm?

Here are some of the factors you should keep in mind when shopping around for a long term care insurance provider.

  • Competitive pricing you should consider a company that has fair, competitive pricing for what you need.
  • The firm’s financial stability -the possibility of using your policy for decades are still very slim, but you still want to ensure that you go for a company that has good standing to pay claims anytime if needed.
  • Company claims payment history – do some homework to learn how different companies are doing when it comes to paying claims. Major national ‘blue chip ‘companies like MetLife, Genworth, Transamerica and Mass Mutual should be on your selection scope.

What are the daily living activities(ADLs)?

We often take for granted simple everyday activities such as eating, until we can’t do them anymore. Any Tax-Qualified Long Term Care Insurance company will necessitate that you require help with at least 2 of 6 ADLs in order for claim payments to start trickling in. The 6 ADLs are:

  • Eating
  • Transferring
  • Dressing
  • Toileting
  • Bathing
  • Your continence maintenance

Learn more about Activities of Daily Living here>>

Does the IRS consider LTC Insurance to be deductible?

In many situations, LTC Insurance is a tax deductible expense. In some cases, you might be able to deduct our premiums by itemizing your taxes. For individuals, the age plays a role when it comes to determining how much will be deducted.

How are the policy benefits treated by the IRS?

Generally, long term care insurance benefits are not taxable – for individuals.

Why choose long term care insurance and not Medicaid?

Long term care insurance makes ensures that you get care when you need it. Medicaid, on the other hand, necessitates that you prove you’re literally broke before you can start getting any help. If you’ve got a qualified LTC state partnership, and end up using all your policy, you can get government assistance without spending down on your personal assets.