While Life Insurance solves the problem of “what will happen to my family if I die young?”, and disability insurance solves the concern of, “how will I provide an income for my family if I become disabled?”, Long Term Care Insurance answers the question, “What if I live a long time, but at some point require help because of a physical or mental impairment?” As we grow older, our needs and ability to take care of everything in our lives changes. Aging is a natural process which will affect us all and, although most people plan for their retirement, they fail to plan beyond that point. Long Term Care (or LTC) refers to a wide variety of medical care, personal assistance and social support that may be needed later in life.

Long Term Care can be received for short periods of time during an extended recovery period following an illness or accident. Anyone, not just the elderly, is susceptible to an auto accident, heart condition, stroke, or chronic illness, which leaves them needing care on an ongoing basis. Often times, people will not consider buying Long Term Care Insurance until they have a need for it, and unfortunately by that time, the insurers will not let you buy it. Some health insurance plans will pay for care that is medically necessary, often on a limited basis, but when it comes to providing assistance with everyday functions such as bathing, dressing, eating, toileting, etc., the cost is often picked up by the person receiving care, or their family. Most of our clients have told us that in the event they needed care, they would prefer to remain in their home while they receive it, if at all possible. Long Term Care Insurance can make that desire a reality.

Long Term Care Insurance pays for the care you receive if you require assistance due to a cognitive impairment i.e. Alzheimer’s or dementia, of if you need assistance with any 2 of the 6 “Activities of Daily Living”, which are:

• Toileting
• Transferring
• Bathing
• Eating
• Dressing
• Maintaining Continence

Long Term Care Insurance is a complex product. There are many carriers selling policies today, and as a consumer it has become increasingly difficult to differentiate one from the next. As your broker, we will work with you to design the best Long Term Care plan from among the many companies we routinely work with. Long Term Care is not only purchased by retirees. We are seeing more and more people considering Long Term Care in their early 50’s, and young adults in their 30’s and 40’s are purchasing Long Term Care for their parents, recognizing that they may be called upon to help their parents one day should they need care. A Long Term Care policy is just one piece of a sound financial plan. You can be the savviest investor, but should you require significant care for even a year or two, the savings you accumulated over many years, can easily be depleted.

Personal Premium Payments:
The table below shows the portion of the annual premium which can be deducted by an individual who itemize deductions and whose total medical expenses exceed 7.5% of adjusted gross income. The table is effective beginning January 1, 2011.

For a slide presentation of how Long Term Care works, click on this link:
Long Term Care Slideshow (Powerpoint Presentation, Size: 44 KB)

The ability to deduct a portion of, or the entire Long Term Care premium and still receive tax free Long Term Benefit payments is valuable. We can provide additional information if you desire.

*The amount of premium treated as a medical expense as defined in Section 213(d)(1) and Section 213(d)(10)of the Internal Revenue Code. Eligible premiums are based on age and are adjusted for inflation annually. Section 162(l) provides special rules for deductibility of health insurance costs for self-employed individuals.

**LLC members are considered to be partners for income tax purposes.

NOTE: The above is not to be considered legal nor accounting advise. Consult your attorney and accountant before acting on any form of program which may have tax consequences.