Long-Term Care Insurance
The premiums for long-term care insurance are dependent on multiple factors, including:
Here are some of the features to explore in long-term care insurance policies:
It is also important to look at the tax advantages of policies. There are non-tax qualified policies, which are usually not deductible as a medical-related expense, and tax-qualified policies. Under a federal law, the Health Insurance Portability and Accountability Act of 1996, tax-qualified long-term care insurance contracts, or qualified contracts, provide purchasers with some federal income tax advantages. There may be other tax advantages in specific states. In addition, employees with Health Savings Accounts (HSAs) may use these pre-tax dollars, besides funding medical and prescription drug costs, to purchase long-term care insurance as an individual or group plan offered by an employer.
Lastly, check out the company and the agent selling the policy, and ensure that both the company and agent are licensed in the specific state to sell long-term care insurance. The state health insurance department is a good source of information.
We never know what lies ahead. Long-term care insurance is designed to help individuals and their dependents plan for the unexpected and help protect against the high cost of care and services associated with a severe illness, injury, or supervision due to a cognitive impairment.
If people are unable to care for themselves, long-term care insurance can assist in covering the cost of long-term care services provided at home, an adult day center, an assisted living facility or a nursing home—essential everyday care like help with eating, dressing and bathing. Certain conditions, such as severe cognitive impairment or inability to perform a certain number of activities of daily living, determine when the insured person will receive benefits, subject to an assessment by an insurance company representative. Benefits vary with the term of the insured person’s policy, and the daily benefit may not equal the daily cost of care.
Should you or shouldn’t you purchase long-term care insurance? Here are some general rules of thumb, according to the National Association of Insurance Commissioners:
You should not buy long-term care insurance if:
You should consider buying long-term care insurance if:
Applicants must meet medical underwriting standards to be eligible for long-term care insurance. A person with a preexisting medical condition or addiction may be denied coverage or be subject to stricter terms. Individuals with existing health problems that indicate the likely need for long-term care—for example, Alzheimer’s disease or Parkinson’s disease—probably would not be able to buy a policy, according to NAIC. Check with the state insurance department in the state in which the potential policyholder resides since some states do not permit certain exclusions.
For more information about long-term care, connect with the Alzheimer’s Foundation of America’s licensed social workers. Click here or call 866.AFA.8484. Real People. Real Care.
Alzheimer's Foundation of America 866.AFA.8484