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Long-Term Care

 

Long Term Care 101

Why is Long Term Care Protection and Long Term Care Insurance Necessary?
  • It is the single most asset protection insurance that needs to be discussed and is often neglected in financial planning.
  • The majority of Americans aged 65 and over will have long-term care needs (70% of “Baby Boomers” can expect to use some form of long-term care during their lives).*
  • Paying for needed long-term care services is expensive and often burdensome; many individuals and families exhaust their assets paying for much needed services and supports.*
  • Medicare does not pay for most long-term care services. Individuals should not rely on Medicare to meet their long-term care service needs. Medicare does not pay for custodial care when that is the only kind of care needed. Skilled nursing facility care is covered by Medicare but only on a very limited basis.
  • Medicare Supplement Insurance Plans are designed to fill in some of the gaps in Medicare coverage, but they do not cover most long-term care services.
  • Private health insurance covers mainly acute conditions and probably does not cover long-term care.
Ways This Potential Threat to Assets Can be protected
  • The default for most consumers is savings. Most consumers with assets have a chunk of assets in “savings Accounts, Money Market accounts, CDS, or under their mattress. The Rainy day fund is for what?? How much do you need to protect you? How efficient are these assets at today’s interest rates? Are there alternatives?
  • Better efficiency of this money can be achieved through tax protected insurance products like deferred annuities, immediate annuities, and life insurance.
  • In addition, Long Term care insurance as a stand-alone product or in combination with other insurance vehicles makes sense.
Long Term Care Insurance Revisited
  • Stand Alone Products – Traditional Long Term Care product and Partnership Plans.
  • Hybrid Products.
  • Total asset protection products.
New York State Partnership for Long Term Care Stand Alone Products
  • Anyone living in the state of New York should be reviewing this option.
  • The New York State Partnership for Long-Term Care offers a lifetime of long-term care coverage while protecting assets, at the price of a two-year nursing home/four-year residential care or home care policy. Other Partnership policies are available to meet specific needs.
  • A lifetime inflation protection option of 3.5% compounded on an annual basis results in a lower cost policy while still making sure the daily benefit keeps pace with inflation over the life of the policy. This has been modified over the years from the original 5% compound inflation option that was automatic in these policies pricing it out of the market.
  • Covered persons wishing to move out of New York can access the Medicaid portion of their policy in 40 other reciprocal states. Total Asset Plans will be considered Dollar for Dollar plans in reciprocal states. This is often THE MOST MISUNDERSTOOD FEATURE!
  • 20% New York State tax credit: The State will support New Yorkers’ efforts to plan for the future by paying 1/5 of the bill for their long-term care insurance premiums. This credit is available to anyone paying premiums, including children who pay for coverage on behalf of their parents when they file a New York State income tax return.
  • Federal Tax Deduction: The premiums charged for tax-qualified policies are treated as medical expenses for purposes of itemized deductions up to certain dollar limits that are indexed annually.

Any agent that is selling Long Term care should offer partnership opportunities and should obtain a separate partnership license and be knowledgeable of all options In addition any elder care attorney should be kept up to date on the availability and understanding of these plans.

We strongly urge and recommend the NEW YORK STATE Partnership for Long Term Care Website for more details about types of plans and a more detailed look into Long Term Care Plans

LTC Companies We Represent

Genworth Financial

genworth-financial

(Traditional & Partnership)
ages 18-79

John Hancock

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(Traditional & Partnership)
ages 18-84

Mass Mutual

MassMutual

(Traditional & Partnership)
ages 40-79

MedAmerica

medamerica_logo

(Traditional, Partnership & HC Only)
ages 21-85

Mutual of Omaha

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(Traditional)
ages 18-79

Transamerica

transamerica-1

(Traditional)
ages 18-79

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© Main Street Planning Group 2013
Website by JoanCH
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