Long Term Care Insurance

Long-Term Care Insurance

Health care costs have skyrocketed in recent years; the median cost for skilled nursing home care in MA is more than $128,000/year; in NH, it’s not far behind at more than $122,000/year. In the event you require nursing home or other long-term health care, your long-term care insurance policy would pick up covered costs up to your policy limits. This can help protect what you’ve worked a lifetime to accumulate.

Long-term care insurance is coverage designed to help cover the cost of nursing home or other long-term health care needs.

Long-Term Care Annuity

Another annuity product that many clients may want to consider is a long-term care annuity. This is essentially a hybrid product, offering features of a long-term care insurance policy and annuity features.

With this type of annuity product, investors put a single lump sum into an annuity and then choose how much long-term care coverage they want, whether they want inflation coverage and how long they want that coverage to last. These choices will depend on what a particular insurance company offers, to some extent.

Money inside a long-term care annuity is free of federal income taxes when the money is used to pay for qualified long-term care expenses. And, if the annuity holder never needs long-term care, the annuity can be redeemed when it matures.

If you expect to be in a high tax bracket during retirement, buying a long-term care annuity can provide welcome relief from federal income taxes while providing insurance coverage for long-term health care without the need for a separate policy.

Long Term Care Insurance
Long Term Care Insurance

When Should You Buy Long-Term Care Insurance?

Many people aren’t sure when they should consider buying long-term care insurance. After all, we think of people who need nursing home care as elderly retirees. In reality, a condition requiring long-term care could arise for any of us – at any time.

The cost of long-term care insurance is based largely on your attained age and overall health status when the policy is issued. Buying long-term care insurance in your 40s and early 50s means you’ll pay less in periodic premiums, and will have the coverage you need regardless of what happens to your health later on in life.

According to the American Association of Long-Term Care Insurance (AALTCI), the best time to apply for coverage is in your mid-50s. The rationale behind that age is that for most of us, our health isn’t going to get any better at that point. Changes in your health for the worse could lead to a situation where you are ineligible for coverage. Don’t make the mistake of thinking you can wait until you need nursing home care to buy insurance; at that point, it will be too late.

For many people considering buying long-term care insurance, a big consideration is wanting to protect the assets they’ve worked a lifetime to accumulate from having to be used to pay for nursing home care. You may want to speak to an elder law attorney or estate planning attorney to discuss how long-term care coverage can help you meet your goals for protecting assets and leaving a legacy to the people or charitable organizations that are most important to you

Christopher Ferguson Insurance LLC offers various long-term care policies designed to meet different needs and goals.

Christopher Ferguson Insurance offers various long-term care policies designed to meet different needs and goals.