Long Term Care Information

7. Are there tax incentives to purchase long term care insurance?

The Health Insurance Portability and Accountability Act of 1996 provide several tax incentives (subject to certain conditions and limitations) to purchasers of private long term care insurance. These include:

• LTC insurance premiums will be deductible as a medical expense for those who itemize.
   

• LTC insurance benefits received by a claimant will be tax free to the recipient.

• LTC expenses not covered by insurance will be deductible.

• Employers who pay LTC premiums on behalf of an employee will be able to deduct that premium as a business expense, as they do for medical insurance.

• LTC premiums paid by an employer on behalf of an employee will not be treated as income to that employee.
   

8. How Does The RISK of Requiring Long Term Care At Home Or In A Nursing Home Compare To Other RISKS You Face?
 

• 1 in 1200
  The chance of a $100,000 loss from a fire or accident in your home*
   

• 1 in 240
  The probability of a $100,000 or greater liability suit arising from an automobile accident*
   

• 1 in 15
  The chance you will encounter major medical health care expenses of $ 100,000 or more (according to the Health Care Financing Administration)
   

• 1 in 4
  The chance that you will have a major long term care expense

You probably have coverage for each of the above risks, and well you should. Yet the probability of encountering significant long term care expenses, better than I in 5, is the greatest risk of all.

What STEPS Have You Taken To PREPARE For The Possible Need For Long Term Care?

* Source Money Magazine, April, 1988


9. Do you need long term care insurance?

Not everyone needs long term care insurance. If you have limited assets, then Medicaid and community based programs may effectively meet your long term care needs. If you do have assets to protect then you probably would hot qualify for Medicaid or community based programs. Also, if you want to maintain your independence, if you want to have the most choices as to where, when, and how care is provided, then long term care insurance may be your best answer. Financial professionals and legal advisors know the importance of a properly structured long term care insurance policy in sound financial planning.