LONG-TERM CARE

The costs associated with nursing facilities and skilled care can be addressed in more that one way. Life insurance with living benefits, annuities (providing lifetime income partnered with need-based benefit multipliers) and traditional Long Term Care Insurance can all be utilized to plan against future uncertainty. More targeted, short term solutions such as a Critical Illness or Cancer Plans are increasing in popularity as tools protect assets against potential illnesses.

It’s impossible to predict the specific needs of an aging individual- expenses for a visiting or live-in caregiver, companion, housekeeper, physical therapist, or a private-duty nurse up to seven days a week, 24 hours per day. And when staying home is no longer an option, private skilled nursing facility costs can exceed $80,000 a year. If that’s unaffordable, many states will require a forced Medicaid Spend Down before contributing to nursing home costs, reducing an individual’s assets (beyond a home and a few other essentials) to $2,000. 

While traditional LTC is costly, there can be some real advantages to going that route. Premiums paid on a long-term care insurance product are usually tax-deductible, with the amount of the deduction depending on the age of the insured.  If employer-sponsored, business deductions of premiums are determined by the type of business. Usually, companies that pay LTC premiums for an employee are 100% tax-deductible, if not included as part of an employee’s income. When benefits are utilized, benefits paid from a long-term care contract are generally excluded from taxable income.