Long Term Care Insurance FAQ

Get answers to the most common questions regarding long term care and long term care insurance below. Simply click on a question to view the answer.

+ How do I determine the best combination of policy benefits for me?
There are several factors you need to consider when making your choice, including your age, income, asset base and tolerance for financial risk. Carefully examine your reasons for acquiring a policy. If you would like to worry less in the future and have the most protection, maximizing your benefits up to the limit you can comfortably afford will allow you to do so. However, if you prefer to save more while still having sufficient coverage, go for a “leaner” approach.

Ultimately, each individual’s circumstances are unique, and it’s best to receive expert advice from a professional who specializes in long term care planning. An hour of consultation can be enough to get helpful recommendations among the different benefits and policies that would fit your situation.

+ Can I still change my benefits after my policy has been issued?
Yes. To increase your benefits, you will need to undergo medical underwriting again for approval. Your updated policy’s new premium will then be computed at your current age at the time you apply for the increase.Reducing your benefits however will not require medical underwriting.

+ How are premiums calculated?
A policy’s premium is determined by personal factors, such as your age and health at the time you apply, and by your benefit choices, such as the benefit amount, benefit period and elimination period. Insurance companies perform underwriting to examine your application and determine your premium.Other factors that affect your premium include policy riders, such as inflation protection and shared care, and discounts, such as spousal discounts or good health discounts.

+ Does long term care insurance have tax advantages?
Tax-qualified policies issued after the implementation of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 have the following advantages:

  • They are tax deductible if you itemize and if your total expenses (including LTC premiums) exceed 7.5% of your total adjusted gross income.
  • Benefit payments are treated as tax-free and are not subject to federal taxation. Some states also have this provision.
  • Employer LTC premium contributions made for employees and spouses may be 100% deductible as an ordinary business expense.

Benefits remain non-taxable to the employee.

+ If I have plenty of assets to carry me through my retirement, why should I consider getting long term care insurance?
You are one of the fortunate few. But consider the steps you took to arrive where you are today. You have probably planned well and made good decisions throughout your life. Long term care today costs between $60,000 and $100,000 annually and it will be much higher in the future. Wouldn’t it be a good strategy to use a portion of interest from your assets to get the safety net of long term care insurance? Again, it depends on your risk tolerance.

+ I’m a veteran. Will the VA pay for my care?
Benefits are available for those with severe service related illnesses under their priority group system. Although the Veterans Millennium Health Care Act “guaranteed” access to long term care benefits, coverage is rationed based on funding and the veteran’s ability to contribute to the cost. It’s recommended to contact the Veterans Health Administration for information pertaining to your individual situation.

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If you have a question about long term care planning, please contact us to get comprehensive information about planning and long term care insurance. By asking us directly by using our Contact page.

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