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There are several critical things about Long Term Care insurance (LTCi) that everyone should keep in mind when evaluating policies and the insurance companies that offer them.
First, we recommend that only Qualified LTCi policies be considered. This means that you will not be taxed for the benefits that you receive if you make a claim and you may also write off the premiums on your taxes.
Second, we recommend that only Qualified State Partnership plans be purchased. Many LTCi carriers now offer or will soon offer State Qualified Partnership Plans that allow you to keep a significant share of your assets during the Medicare spend down period if you run out of insurance. This is especially important if you would like to leave a legacy to your children.
Third, we recommend that Long Term Care Insurance only be purchased from LTCi companies that are highly rated by A.M. Best or other insurance rating firms. The higher the rating, the more likely your insurance company will be around to pay your claim when you need it.
Fourth, make sure that your LTCi policy covers in-home care and care in an assisted living facility. In-home and assisted living care is the fastest growing segment of the healthcare industry and you or your family will likely have to pay these expenses out of pocket. Notably, Medicare does not provide coverage for living assistance in the home or in an assisted living facility and Medicaid coverage is extremely limited and restricted.
Fifth, we recommend that the inflation option be purchased so that the per day rate that your insurer will pay keeps up with inflation. For example, a $150 daily rate for assisted living or nursing home care may sound like a lot today, but 20 years from now that may not cover all the daily expenses for your care. There are other important options that you should also consider, but it is too complex to discuss here.
Finally, please click on the link below for your LTCi toolkit provided by the Department of Health and Human Services to help you evaluate the various Long Term Care insurance carriers and their costs. We recommend that at least 3 LTC insurance carriers be evaluated and their costs compared to ensure that you get the most insurance for your hard earned dollar!