James W. Goodacre II, RHU and REBC

Experience, Integrity, and Knowlege

Long Term Care (LTC) Insurance

Long-term care insurance is a useful financial instrument for dealing with the uncertianties associated with a population that is living longer than any other previous generation.

What is Long Term Care?

Long Term Care includes medical and non-medical care to people who have a chronic illness or disability. Long-term care helps meet health or personal needs. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community, in assisted living or in nursing homes. It is important to remember that you may need long-term care at any age.

What is the possibility of my needing Long Term Care?

You may never need long-term care. However, this year, about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly.

A study by the U.S. Department of Health and Human Services says that people who reach age 65 will likely have a 40 percent chance of entering a nursing home. About 10 percent of the people who enter a nursing home will stay there five years or more.

What are nursing home costs today in California?

Nursing home care in 2006 for the state of California residents averages about $190 a day or over $69,000 per year. Source: CA Office of Statewide Health Planning and Development & California Partnership for Long Term Care

What is Long Term Care Insurance?

Long-term care insurance gives you financial protection against the cost of long-term care services for both skilled and non-skilled care.

Long-term care insurance coverage can vary widely. Some policies may cover only nursing home care. Others may include coverage for a whole range of services like care in an adult day care center, assisted living, medical equipment, and formal and informal home care.

Long-term care insurance premiums vary, depending on your age and health status when you buy the long-term care insurance policy and how much coverage you want. Additionally, you must be in generally good health to pass underwriting when purchasing a policy. For this reason, it may be better to buy long-term care insurance at a younger age when premiums are lower. If this is done, a periodic review is advised to make sure your policy covers your current and future long-term care needs. But you can buy long-term care insurance at any age.

Most long-term care insurance policies offer certain tax benefits. These policies are called Tax-Qualified, or TQ, policies. Depending on your age, you can include some or all of the premium for a TQ policy as a medical deduction on your Federal income tax form if you itemize your deductions. Also, when you receive payments from a Tax-Qualified policy, you generally don't have to pay Federal tax on them.

If you have questions contact me via email James Goodacre, or call us at 831-626-9250. We can discuss a long term care plan that matches your needs and desires.


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