Category Archives: Reasons to Buy Long Term Care Insurance

Retiring Overseas – Plan for Long Term Care

The world is at your fingertips. As you consider retirement, you may have the luxury of jet-setting to far off locations and plan on retiring overseas.

If you’re planning for retirement years filled with travel and adventure overseas, don’t forget to think about your long term care needs in the future.

While some may retire overseas to be closer to family, others may be further away from family or friends who could provide care in an emergency.

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The Cost of Long Term Care Insurance for Families

Though the cost of long term care insurance is often a financial one, there are other costs associated with having coverage versus not having coverage.

Long term care insurance does more than just pay for care. Yes, it helps ease the financial burden on families, but few may realize how LTC insurance can help ease other burdens on a family during a long term care event.

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Long Term Care Costs – What You Need to Know

Long term care costs can vary based on your location, where you receive care, and the level of care you need. Learn more about what you need to know about long term care costs below.

Cost of Care Varies by State

The cost of care varies based on your state of residence or the state you plan to receive care. For example, the annual cost for home care in Alaska is $60,000 (according to 2015 statistics). In comparison, a year of home care in Texas costs $45,000.

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How to Pay for Assisted Living or Home Health Care?

A question many people wonder when planning for retirement or helping aging family and friends is, “How do you pay for assisted living or home health care?”

This may be especially true for individuals or families on a limited income, or those who want to protect their hard-earned assets from the high expense of long term care services.

Common Misconceptions

Don’t be fooled. The following are a couple common misconceptions when paying for care:

  1. Local state governments may offer financial assistance for individuals who are disabled or fall below the poverty line, but this coverage may not be available to everyone. Medicaid is reserved for people who have spent down1 their savings to $2,000 and meet other individual state requirements.
  2. Your health insurance will not pay for extended assisted living or home health care. It may cover some rehabilitative services, but long-term care is typically not covered by health insurance.

Outside of government assistance for those who qualify, most individuals and families have the following options to pay for long term care services such as assisted living or home health care.

Self-Funding

Home care or assisted living services may be funded by individual income from their retirement, savings, social security, etc.

The cost of care ranges by state and can be a significant annual expense depending on your location and the level of care needed.

Those who choose to self-fund should be aware of the current cost of care and account for future costs due to inflation. The cost of home care rises 1% per year on average while nursing home care averages a rise of 4% per year.  As you can imagine, the cost of care 20-30 years from now will be drastically different than the cost of care now.

Depend on Family and Friends

You may choose to rely on family or friends to deliver care. It’s important to make sure your loved ones know of this decision and can offer the level of care you need.

In most households, this may require someone to quit their job to deliver full-time care in the home.

Caregivers who assist with the financial side of care of a loved one estimate that they pay, on average, about $10,000 per year in out-of-pocket expenses.  Most caregivers do not anticipate or plan for this expenditure.  Based on a recent study by Genworth Financial, 77% of caregivers indicated that in order to provide care for a loved one, they had to miss work2.

If you plan to save money by having your family help, make sure you count the financial, emotional, and physical costs involved in personal caregiving.

Protect Your Risk with Long Term Care Insurance

Have you experienced caring for an aging parent or loved one? If so, you understand the emotional and physical toll of providing care for someone you love.

Long term care insurance offers families peace of mind so they can focus their energy on spending time with and enjoying their loved ones.

When you protect your risk with long term care insurance, this coverage can pay for assisted living or home health care expenses.

Coverage typically provides access to additional helpful resources including a personal long term care planner. These planners assist you and your family with finding the right care and help ensure you’re taking advantage of all the benefits your policy offers.

Curious if long term care insurance is right for you? Learn more by browsing our resources and shop the market for an instant quote.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

1Medicaid spend down varies by state. 2Genworth Financial, The Expanding Circle of Care: Beyond Dollars 2015.

Long Term Care Insurance and the Baby Boomer Generation

Long term care insurance and the baby boomer generation is a hot topic today. From 2011 to 2029, baby boomers (those born between 1946 and 1964) will turn 65. During this time period, 10,000 people will turn 65 every day.1

With so many baby boomers in the workforce reaching retirement, we could face a shortage of nurses and support staff. Not to mention, a strain on government assistance programs such as Medicaid.

Learn more about the challenges baby boomers are facing and the importance of long term care planning.

Government Programs May Not Handle the Influx

Medicaid is a government assistance program for low-income, elderly or disabled individuals. Eligibility may vary by state, but in most cases, participants are required to spend down to $2,000 in assets before being eligible.

With 76 million baby boomers reaching retirement age within the next decade, can state Medicaid budgets keep up?

Knowing the wave of baby boomers is looming on the horizon, the government attempted to solve the issue with a provision in the Affordable Care Act (ACA) called the CLASS Act, a national voluntary long term care insurance program. Unfortunately, this was repealed in 2013 when they couldn’t develop an affordable product.

Relying on the government for your care may not be the best option. It’s important to take control of your future by planning now.

Baby Boomers Will Live Longer and Need More Care

Due to medical advances, baby boomers are expected to live longer, resulting in higher care needs for longer periods of time. Depending on your state, the current annual cost of care for home care or facility care ranges from $50,000 to over $100,000.

These costs will only increase in the future due to inflation.

The Cost of Care Is Increasing Each Year with Inflation

If you think the cost of care is high now, just think what it will be 20-30 years from now when you need it!

Inflation increases the cost of care 1-4% each year. This is why it’s important for baby boomers to make a long term care plan now.

By planning ahead, you’ll know who will care for you and where the money is coming from to pay for your care.

Long Term Care Insurance and the Baby Boomer Generation – Planning Is More Important Than Ever

Providing care for a loved one can be physically, emotionally, and mentally draining for family members. If you’re a baby boomer, prepare for your future now with a long term care plan to protect your family.

Peace of mind comes from knowing you’ll be taken care of when you need it most and have the financial means to do so.

Secure a long term care plan for your future now by speaking with an LTC Specialist today. Learn more about your options and get an instant quote for long term care insurance here.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

1 Visualizing Health Policy, Kaiser Family Foundation. August 28, 2013. Volume 310, Number 8.

Should You Buy Long Term Care Insurance with Your Spouse?

Statistics tell us a healthy female, age 65, has a 67% chance she will live to age 90 and a 38% chance she will live to age 951.

It’s no surprise that women typically live longer than men and require more care. So does this mean only one spouse should be covered by long term care insurance? Not necessarily. We’ll explain why.

In most cases, we recommend you buy long term care insurance with your spouse to cover your full risk and take advantage of extra benefits or incentives. If you’re on the fence about applying for coverage with your spouse, the following are a few discounts and incentives you may want to consider.

You Receive Discounted Rates

Most insurance companies reward married couples who apply together and are approved for coverage by offering discounted rates. Discounts may vary by carrier and can save you up to 30% on your premium resulting in significant savings over the life of your policies.

Since gender-based pricing entered the market a few years ago, costs for females have increased significantly to account for women living longer and needing more care. This break in premium for spouses is a great incentive to lower the rate and ensure you’re both covered in the event you need care together or at separate times.

Shared Care Spreads the Coverage

You share everything with your spouse, why not share your long term care benefits? Shared Care is an additional rider that can be added to your policy when you and your spouse are approved for coverage.

This valuable benefit acts as a bridge between both of your policies allowing you to share each other’s pool of money. If one of you uses your entire benefit, you can dip into your spouse’s policy for more coverage. Essentially, shared care can double your long term care benefit.

For example, Mr. and Mrs. Johnson purchase $200,000 each in long term care benefits. Mr. Johnson uses all of his $200,000 while Mrs. Johnson’s policy remains untouched. Because they added Shared Care, Mr. Johnson can access her benefits for additional coverage.

Survivorship Pays Up

Survivorship is another optional rider that can be added to policies when both spouses apply and are approved for coverage. When one spouse dies, Survivorship allows the surviving spouse to have a paid up policy. In other words, all future premiums for the surviving spouse are forgiven. These riders typically require the policies to be in place for seven to ten years before a spouse dies to be eligible to be paid up.

Survivorship can be expensive and is not for everybody. Though this added protection may be beneficial when there’s a large discrepancy in age between you and your spouse.

For example, a much older husband is statistically more likely to leave a younger bride with many years of life left after his passing. Survivorship ensures her future care needs are secure with a paid up policy. These are hard facts to face, but important to consider when applying for coverage together.

Still wondering if you should apply with your spouse? When financial constraints only allow one spouse to be covered, we believe some coverage is better than none. Get an instant quote for you and your spouse today and speak with an LTC Specialist to consider your best options.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

1Genworth Financial. A2000 Basic ANB Mortality Table with Scale AA mortality improvement.

Planning for Long Term Care When You Are Single

Betsy was my next door neighbor when I bought my house.  She was 87 years old and living in the same home that her parents built and that she lived in as a child.  I remember running over to help Betsy as she was up on an old ladder cleaning out her gutters.  My wife and I got to know her and her daughters who would lament they have been trying for years unsuccessfully to get their mother to move to a more manageable place.

Besty is not alone, in fact today there are more Americans living as a single household than ever before.  A recent study showed that more than 1 in 4 of all American households are single individuals.  Contrast that to 1920 when it was just 5%.

So what should you be thinking about if you are single and planning for the future and if you need long term care?  Here are some simple tips for planning for long term care when you are single:

  1. Develop a local network of friends.  Not only is having a steady group of friends important for meeting for coffee or dinner but they can help if you need other things.  When you are sick they can bring you meals or even check in on your house when you are away.
  2. Develop a written plan and give it to a trusted friend or family.  Your written plan should not just be your will and medical directive but also practical things like financial account logins and passwords, safe combinations, and if you need care how will personal care be provided and paid for.  Imagine if you could not communicate for some reason, how would your bills be paid or you be taken care of?
  3. Review your household chores and how they get done.  As we age, sometimes simple things like cleaning the gutters can be risky, especially when we are single.  If we fall and get hurt without someone else around this can make a simple injury life threatening.
  4. Regularly check in on your friends and they on you.  Having a regular check in, whether a simple call, email or meeting for lunch not only builds relationships but also lets someone know if you are not okay.

By keeping your social network of friends strong and implementing a few key items single people can enjoy being alone without truly being all alone.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

3 Things Baby Boomers Should Consider When Planning for Healthcare in Retirement

“I believe the key to happiness is; someone to love, something to do, and something to look forward to.”  Elvis Presley.

Baby Boomers have changed the world in many ways.  According to the 2014 US Census there are 76.4 million baby boomers and they are making a steady march towards retirement. Retirement for a baby boomer will look very different than previous generations.  For example, they are estimated to live longer than any previous generation and consume far more healthcare dollars than ever before.  One of the largest challenges for baby boomers is how much money to set aside in retirement for healthcare.  There is an inherent fear that they may outlive their retirement savings.  A 2014 Fidelity study found that the average couple retiring at age 65 will spend roughly $220,000 in healthcare costs like doctors, insurance, and drugs; but that doesn’t include anything for long term care services.

So, if you are a baby boomer preparing for retirement, what should you consider?  Here are 3 things baby boomers should consider when planning for healthcare in retirement:

  1. Look into Long Term Care Insurance.  Long Term Care insurance is like retirement disability.  If you are not able to care for yourself due to aging or a medical condition, the insurance pays for a professional to come and help.  It can cover simple things like cleaning, cooking, and helping with errands, to very skilled nursing care.  By using insurance instead of your retirement savings, it helps insure you do not live beyond your savings and protects your kids from having to provide care.
  2. Work with an insurance specialist.  Would you hire a roofer to wire your house?  Probably not.  Just like contractors, you will get better advice and lower costs by working with an insurance specialist in specific areas like Medicare Supplements, Long Term Care, and Annuities.  Make sure you find a specialist who works primarily in that product line and represents many companies.  They can work on your behalf to get you the best deal so you don’t have to do all the work.
  3. Start early.  Baby Boomers never think they will get old, sick or hurt.  But unfortunately, it still happens to everyone, eventually.  By starting early in your mid to late 50’s by setting up your team of specialists or getting educated on products like long term care, you will be more likely to have the coverage you need at the time you need it.  Just like you can’t buy home owners insurance AFTER your house is on fire, it is best to plan ahead and have the insurance in place BEFORE you need it.

Baby Boomers changed everything from music, television, to the internet.  They will also change the way retirement healthcare looks and by planning ahead and following these simple steps, they will be ready to shake up the establishment in their later years as well.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

Save on Long Term Care Using Your Health Spending Account (HSA)

According to the Department of Health and Human Services, 70% of people who reach age 65 will need some form of long term care in their lifetime.  It is a scary fact, but what may be scarier is finding ways to pay for your long term care insurance.  You may be interested to learn how to save on long term care using your health spending account (HSA).

For those who may struggle to fit paying for long term care insurance into their budget, the good news is you may pay for premiums with your HSA.  It must be a ‘tax-qualified’ policy (which most are) and the amount you can withdraw tax-free for these premiums depends on your age.

In 2015, you can use up to $380 tax-free from your HSA for long term care insurance premiums if you’re 40 or younger, $710 if you’re 41 to 50, $1,430 if you’re 51 to 60, $3,800 if you’re 61 to 70 and $4,750 if you’re over 70.  This amount increases each year to account for inflation growth.

If you chose not to use your HSA money to pay for a portion of your premiums, you may also be able to count those premiums as tax-deductible medical expenses.  You would need to follow the guidelines outlined in our 2015 Tax Guide.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

Is long term care insurance deductible?

One of the most common questions we receive about long term care insurance (LTCI) is: Are my long term care insurance premiums tax deductible?  One of the greatest features of LTCI is: It is tax deductible!

For individuals, current tax laws state that you may be eligible for tax breaks on premium of tax-qualified1 LTCI as it is considered a medical expense.  If you itemize your federal income tax deductions, medical expenses are deductible to a certain extent, based on your age.

If you are under age 65, and your combined medical expenses (tax-qualified LTCI and other medical expenses) exceed 10% of your Adjusted Gross Income (AGI), you may be eligible for a deduction.  Currently, if you are 65 or older, the threshold is 7.5% of AGI for tax years 2013-2016.  Any portion of LTCI premiums outside of the eligible premiums listed below cannot be includable as a medical expense.2

Tax Guidelines

For more information on tax credits, ask about specific policies from given providers in your state; then check with your tax advisor or refer to LTC Consumer’s 2015 Tax Guide as most policies are tax qualifying.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

Disclaimer: This article does not constitute legal or tax advice and should not be construed as tax or insurance advice.  It was neither written nor intended for us by any taxpayer for the purpose of avoiding penalties, and it cannot be so used.  Please speak with your tax advisor or long term care insurance specialist in regards to a particular situation.

1A tax-qualified policy is based on the guidelines defined by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
2Allowable deductions are set by the Internal Revenue Code (IRC) section 213(d)(10).