Heading Main

Abstract: The high cost of long-term care (LTC), which may include an assisted living facility, nursing home or home health care, can quickly devour resources needed to maintain one’s lifestyle during retirement and provide for children or other heirs. Below, we have outlined what to consider in a LTC insurance policy.

Too often, people planning their estates focus on tax and asset-protection issues and overlook long-term health care needs. However, the high cost of long-term care (LTC), which may include an assisted living facility, nursing home or home health care, can quickly devour resources you need to maintain your lifestyle during retirement and provide for your children or other heirs.

LTC expenses, which can easily reach into six figures annually, aren’t covered by regular health insurance policies or Social Security. Medicare provides little assistance, if any, making it important to have a plan for financing these costs. Consult with us to be sure that LTC costs are considered as part of an integrated estate and financial plan. We can help ensure that you set aside sufficient funds to provide quality LTC for you and your spouse if necessary.

For example, consider an LTC insurance policy. Although these policies are expensive, under the right circumstances they can prevent LTC costs from depleting assets you’ve set aside for retirement and estate planning. Moreover, many of the policies provide for the return of principal or include a life insurance component. Each policy is different, so it’s important to understand their terms, conditions and scope of coverage.

Also, find out whether a LTC policy is “tax-qualified.” If it is, any benefits you receive will be excluded from your taxable income, subject to certain limited exceptions, and you’ll be able to deduct a portion of your premium payments. Tax-qualified policies are guaranteed renewable and non-cancelable, don’t delay coverage of pre-existing conditions more than six months, and meet certain other requirements.