Long Term Care

Long term care insurance (LTC) is designed to pay for some or all of the costs associated with a chronic medical condition, or one that is not likely to improve over time. Coverage will typically begin after there is an inability to perform certain activities of daily living or after a cognitive disorder has been developed. Health insurance does not cover long term care needs, Medicare can pay under certain conditions but only for a very limited amount of time, and Medicaid is only for the impoverished. These reasons intensify the need to evaluate ones need for long term care insurance. The savings and retirement fund that has built up over decades can be depleted in a short amount of time without a proper plan in place. Aside from providing the funds to offset the care provided, long term care insurance limits the obligation of family members to be caregivers. Policies will now allow for care to be provided in one of several facilities, including the insured’s own home, adult day care, nursing home, and hospice.

Today’s market offers coverage is several ways, a few of which are listed below:

  • Traditional – this type of policy is the original that was designed to specifically provide benefits for long term care coverage
  • Linked Benefit – using a single premium or a series of smaller deposits, a predetermined amount of coverage is provided to cover the potential cost of care. If care is not needed, the premiums may be returned to the beneficiary in the form of a death benefit
  • LTC Rider – a rider is placed on a life insurance policy to allow the insured the ability to take early distributions of the death benefit to cover LTC cost. Once the death benefit reaches zero, payments stop, and any amount not paid as LTC will be paid to the beneficiary as originally designedSince each policy will contain its own eligibility criteria and may limit what/how much benefit can be provided, we recommend that you contact us to review each option to see which one will be the best fit for your situation. There are also limits on the amount of benefit that can be provided in one day, and any amount received in excess of that limit may be taxable.

All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.

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