As we have mentioned here on the blog and on the MBK Beat Podcast, we seek to provide users with useful, direct information that adds value to your situation. If you wish to take a deeper dive into anything involving your life insurance or retirement strategy, you should take some time to sit down and let us know a bit more about your personal case. Each case varies, and each situation has potential for improvement. We can certainly find out how we can help with a simple phone call or message! Today on the blog we wanted to talk a bit about the simple factors to consider when thinking about Long Term Care Insurance.
For More Info – Check Out Our Podcast on Long Term Care Insurance!
For anyone who is still out there fighting the good fight in your given profession or industry, you may not think it’s the right time to be thinking about Long Term Care Insurance. You may have a healthy life, healthy family, and secure income. You may have the best life insurance plans you need, but what about Long Term Care? The phrase “Long Term Care” refers to the help that people with chronic illnesses, disabilities or other conditions need over a course of time. This could range from bathing, dressing and eating after a surgery or fall, or even skilled nursing care provided by nurses, therapists or other professionals.
Some individuals may have employer-based Long Term Care insurance, and Medicare will cover a short stay in a nursing home lets say, but in the event higher, longer-term care expenses are needed, this won’t be covered. This is why timing is everything, well at least ONE thing to consider.
Here are a few things to consider when thinking about Long Term Care Insurance
Timing
Your age and your health are two major factors when looking at cost of Long Term Care Insurance. Put simply, policies cost less if purchased when you’re younger, and healthier. You may not be able to get coverage if you are old or are unfortunately sick with a serious health condition.
Cost
Your budget will determine if you will be able to cover your premiums. Consider not only your payment now, but your payments down the road. You are investing in a policy, but if you can’t cover the payment, you can lose your investment.
Income
This option may not be for everyone, but lets say you are a high earning professional or maybe even you own your own business. Your particular skill is your weapon in income. If you can’t go to work, your income will be cut. Employer based and medicare may cover some of what you make on paper, but you can’t be in two places at once. The money you can take in from a soundly invested Long Term Care Insurance can help you get over the hump and get back to work.
Read More: NAIC: The State of Long-Term Care Insurance
Your Family
Depending on your familial situation, you may have people who will be available to take care of you in the event of an accident, or as you age and need further help. What if you don’t? What if you feel your family won’t be able to take care of you because they live out of state? Your support system matters when making life insurance decisions. You want everyone to be able to continue living, earning, and making a difference, no matter what policy you choose.
Taxes
Benefits paid through a long-term care policy are generally not taxed as income. Most policies sold today are “tax-qualified,” meaning if you itemize deductions and have medical costs in excess of 7.5% of your adjusted gross income, you can deduct the value of the premiums from your federal income taxes. The amount of federal deduction depends on your age. This all depends of course on what state you live in, amongst other factors.
This is only the tip of the iceberg when it comes to long term care insurance. You may not think of long term care insurance as something that is necessary or helpful to your situation right now. That’s okay. It may not be, but without checking you don’t know what you don’t know. Each case is different, as we’ve said many times, but we love to work with professionals and business owners to help them see the many benefits that can be found when you dig a bit deeper. Understanding the IRS and tax laws can be confusing, but navigating those waters is something we work hard at. If there is anything we can do to help you get your books in order and start organizing your retirement portfolio, please don’t hesitate to reach out!
We are always willing to help!