These words from Mark Twain are very important today:
"Plan for the future because that's where you are going to spend the rest of your life".
The emphasize the need to think about the lifestyle you would like if a change in health were to happen!
Many people are:
● Over confident about being "invulnerable" and think - "I won't need assistance".
● Busy with other things and think - Oh I can take action later. However, there are two problems "when later comes":
˃ The cost to buy has gone up for each year they waited.
Note: The cost is 60% higher at age 60 vs 55.
˃ The Big One is - they may not qualify because of a change in health!
● Buying "insurance to protect income and savings":
˃ Is not the same as putting money in an investment and hoping to get more back.
˃ Gives you a guarantee the benefit amount you select will be there to pay for assistance. There is no hope involved!
● Lets say a 55 year old buys a plan with a four year benefit and needs help at age 80. What they paid over this 25 year period could come back in benefits in just 7 1/2 months! (227 days)
People (66%) incorrectly believe MediCare pays for on going assistance. But it does not! This quote from the What is Not Covered page on the Medicare.gov web site tells us: [I added bold]
"Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care."
Government coverage from MedicAid (welfare) will pay for long term services if - a person is indigent. The question to think about is - will the state/federal funding, which is not guaranteed, continue to be available in the future and what will it cover?
● Some people think it will so they plan to wait and apply if needed.
● Many however don't want to be in the kind of lifestyle, which comes when receiving MedicAID. They believe their dignity would be lost.
Note: In Connecticut MedicAID's reimbursement rates are very low so only certain nursing homes are available.
Surprise! There is help form the IRS!
Owning long term care insurance can have a positive affect on taxes. How?
● IRS regulations state - money received in benefits from a qualified long term care insurance plan is tax free!
● In addition: Some individuals can benefit from the Long Term Care insurance age based partial deduction. Payments are deducted when completing their IRS 1040.
Note: However, the IRS also says taxes have to be paid on any dollars withdrawn from investments to pay for assistance!
AALTCI created a 7 minute video with points on the wrong & right questions to ask when talking about this special kind of insurance and when to buy!
Call John C Parker today - 860.739.0005 to for an appointment. We can discuss developing a plan so you won't become a burden on the ones you love. Buying means you transfer the responsibility to pay for any needed assistance to a Long Term "Health" insurance plan. I'll get back to you if not available.
You can also send a note to - Learn@JohnCParker.agency