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".
His words emphasize the need to think about the lifestyle you would like if a change in health were to happen!
There is no one answer but 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