Long-Term Care Insurance
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What is Long Term Care?
Just as you insure your car, home, and family from potential financial disruptions, you can help protect your investments ifyou ever have a long-term care event such as a stroke or Alzheimer’s that requires extended care.Long term care isn’t medical care, but rather a range of services and supports designed to meet your personal care needsat home or in a facility after a licensed healthcare practitioner certifies that you are unable to perform at least two of the sixActivities of Daily Living (ADLs) due to illness, disease, or cognitive impairment.ADLs include: EATING, DRESSING, BATHING, TOILETING, CONTINENCE, TRANSFERRING TO/FROM BED
Who pays for Long Term Care? (Hint: not Medicare)
What Medicare Pays For:
Days 0-20 - Pays in full if you're hospitalized for at least 3 consecutive days before entering a Medicare-approved skilled nursing facility.
Days 21-100 - May pay for the difference between the total daily cost and a significant co-payment if you continue to need skilled nursing care.
Days 100+ Medicare does not pay
Medicare does not pay for Assisted Living Facility care, retirement community, Adult Day Care services, nor ongoing personal care or custodial care needs (help with Activities of Daily Living)
What is the best fit for YOU?
Long-Term Care Insurance
Pros:
*Inflation protection
*Care Coordination concierge healthcare
*Maximizes long-term care insurance leverage
while minimizing premium committment
*Premiums are tax deductible for business
owners
*HSAs
Cons:
*Premiums are not guaranteed
*"Use-it-or-lose-it" premium (no cash value
or return of premium)
Hybrid Life/LTC
Pros:
*Maximizes flexibility & provides a substantial
benefit for a long-term care insurance event
*Flexible payment options
*Guaranteed premiums
*Easier to qualify for coverage (underwriting
can be less stringent than with a Traditional
LTCi policy)
Cons:
*Not the same tax advantages for business
owners for Life Insurance premiums (if self-
employed you can only deduct the LTCi
premium portion)
*Not the best LTC coverage for your money/
more expensive than "traditional" LTCi
*LTC payouts can reduce the cash value or
death benefit
*Limited availability to be customized for
individual needs
Self-insured
Pros:
*Zero up-front costs while retaining liquidity
Cons:
*Not a healthcare plan
*No care coordination benefit
*Tax timing consequences
A prolonged illness, injury or disability can cause a significant amount of assets to be tied up, making it difficult to immediately liquidate funds to quickly cover long-term costs. Moreover, having to quickly liquidate nonliquid assets may result in having to accept a substantial loss on a sale or potential tax consequences.
