You're NOT Too Young To Plan NOW For Long-Term Care

November is Long-Term Care Awareness Month, .... even the U.S. Congress has urged "the people of the United States to recognize (this) as an opportunity to learn more about the potential risks and costs ... and the options available". We're proud to support this important educational campaign.

Smart reasons to think about long-term care as part of your overall financial plan.

You protect against other risks like a car accident or house fire. A need for long-term care is a risk to your savings and to your retirement. It will impact your family and loved ones. Just as it is smart to plan ahead for retirement, it's smart to plan now for long-term care. Here are some things you should know:

Buy before age 65; avoid the high cost of waiting. Your age and your health are important factors that determine the cost of long-term care insurance protection. Costs are based on your age at application and go up each year. By waiting to purchase until you are closer to retirement you might find it's just too expensive to buy this important protection.

At younger ages you can lock in good health special savings. Your good health today can help you "lock in" preferred health discounts that won't change even if your health does. If you currently have a health condition it's especially imporant to find out if you can health-qualify before it may get worse.

Discounts can help significantly reduce the costs. I believe you will be surprised by how affordable long-term care insurance protection can be for some of the newer plans suited for people your age. Today, there are ways to reduce the cost of long-term care insurance; savings available when you plan ahead.

The first step is in yourn hands. Getting the information you need to make an informed decision is always a smart move. Waiting is never advantageous. I encourage you to make this first step. Call or email me. There's no obligation, of course, Make Long-Term Care Awareness Month the time you start planning!

Additional Legal News ... You can Use

Question: Can a long-term care insurance policy be owned by an (irrevocable) trust? The goal of having this done to have the trust pay benefits directly to a facility so the actual person won't lose VA access to whatever care VA covers. It seems that if one had income from a policy reimbursemnent, it could mean they couldn't get the VA coverage.

Answer: To answer this question, our expert spoke with the VA to get a more definitive answer, but they didn't have an answer either without consulting the local eligibilty office (so the final outcome could depend on where the individual lives).

A long-term care insurance policy can be owned by an irrevocable trust if the carrier allows 3rd party ownership. That being said, this may not accomplish what the client wants. I assume the client is concerned that the LTC benefits would disqualify him or her from medical benefits (as the VA nursing home is free). If this assumption is correct, are the client's VA benefits dependent upon low income? If not, the benefits should have no effect on eligibility. If the benefits are dependent on low income, it does not appear that the application asks for such payments in the income section, however, they should contact the local VA eligibility office to definitely answer that income question.


Question: If a single woman buys LTC insurance and then later gets married and the spouse buys coverage, is the spousal discount applied to the second policy? Or, how does it work?

Answer: With most carriers this is how it would work. Ms. Smith purchases coverage with carrier "x". When married and Mr. Jones gets coverage (also with carrier "x") Mr. Jones' policy will be issued with the spouse discount. The new Mrs. Jones (Smith-Jones if you prefer) will have the spousal discount applied as of the effective date of her (new) husband's policy. Rules will vary from insurer to insurer and because the spousal discount can be so significant, it is worth checking this out in advanced.

Legal News ... You can Use

Question: Long-term care insurance premiums may be paid from a Health Savings Account (HSA). It is my understanding that someone on Medicare cannot have a HSA and thus take advantage of this. Does this mean that someone paying premiums from a HSA will need to stop doing so once reaching 65 and going on Medicare?

Answer: According to IRS Notice 2004-50, 2004-33, IRB 196, A-3; an individual enrolled in Medicare Part A or B may not contribute to an HSA. If someone is eligible for Medicare but has not enrolled, they may still make the contribution. The LTCi premiums would still be an allowable distribution from a HSA, just no further contributions would be allowed for this individual.


Question: Where precisely does a self-employed person write off tax-qualified LTC insurance premiums? And where does he/she write off premiums paid for her W-2 employee who is also her husband? Both policies will have shared riders.

Answer: The actual deduction for the long-term care insurance premium paid by a self-employed individual is actually taken on line 14 of Schedule C (of the For 1040). As you know, the deduction is limited to the amount of the "Eligible Premium" amount for the self-employed individual and spouse of the self-employed individual (Internal Revenue Code Section 162 (I)(2)(C) and Section 213 (d)). If the spouse is a bona fide employee of the business, then the actual long-term care premium may be deducted for the employee / spouse's policy (Internal Revenue Code Section 162 (s)).

2010 Tax Limits Announced

The Internal Revenue Service (IRS) has just announced the increased deductibility levels for long-term care insurance policies purchased in 2010. I think there are several positive things worth noting ... and sharing with others.

First, the maximum deductible limit for an individual now exceeds $4,000. That should get some people's attention - even though few individuals qualify for the personal deduction. Second, the levels were increased for 2010. Pension contribution limits for 2010 were NOT increased.

Here are the 2010 limits:

Attained Age Before Close of Taxable Year
Age 40 or less: $ 330
More than 40 but not more than 50: $ 620
More than 50 but not more than 60: $1,230
More than 60 but not more than 70: $3,290
More than 70: $4,110

The per-diem limitation under 7702(d)(4) for calendar year 2010 is $290.

Your Good Health Today Can Save You 10% - 20% Each Year

Drivers who've had accidents pay more for their car insurance than good drivers who benefit from good driver discounts. When it comes to long-term care insurance protection, individuals who are in good health when they apply for coverage can take advantage of good health discounts. These good health (or preferred health) discounts can reduce the yearly cost of your long-term care insurance protection by 10-to-20 percent. Best of all, once you qualify for a good health discount, you won't lose the annual savings, even when your health changes.

Four Important things to keep in mind:

1) Health changes as we age. Even a simple change that is not life-threatening can cause you to lose the ability to qualify for good health discounts offered by insurers.

2) Each long-term care insurance company sets its own good health standards. An existing health condition that may be acceptable to one company ... may not be acceptable to another.

3) Taking common medications, and even your weight can impact your ability to qualify for good health discounts with some insurers.

4) If one company denies your application for long-term care insurance, another may refuse to insure you. But that's not always true; so seek professional advice BEFORE you apply.

There Are Ways To Reduce the Costs of Long-Term Care Insurance

Most people believe they are likely to live a long life ... into their 80's, their 90's and maybe even longer. When you live a long life, you are more likely to need long-term care. Maybe you've seen this with an aging parent, a friend, or a neighbor.

When the need for long-term care occurs, will you be prepared? Will you have a plan in place? No one likes to think about aging. But, like it or not, we're all going to get older and that means you have to plan for it. When it comesto planning for long-term care, it's never too early to get the facts you need to make a smart decision. That's especially important because once you have health problems getting protection may be more difficult or even impossible.

When it comes to long-term care insurance, here are three important facts few people know:

1) There are ways to reduce the cost significantly.

2) A change in your health can increase what you pay for insurance protection. It can make it impossible to get long-term care insurance no matter how much you are willing to pay.

3) You might be surprised how affordable long-term cre insurance protection really is when you compare it to having to pay for care itself.

Remember: Living a long life is likely .... Planning for it is necessary and a smart financial move.

CMS Posts Quality Ranking of 16,000 Nursing Homes

The Centers for Medicare and Medicaid Services has launched the federal government’s first website devoted to ranking of the 15,800 nursing homes that participate in the public insurance system. Homes are assessed based on health inspection surveys, quality control measures and staffing levels.

In this first round of rankings, twelve percent of homes earned a top rating of 5 stars; twenty-two percent earned the lowest rating of 1 star and the remaining sixty-six percent were distributed fairly evenly at 2, 3, or 4 stars.

Consumers are urged to use the ranking in their evaluation of nursing home alternatives in their area, but are advised the data is no substitute for personal visits and discussions with administrators.

To review the rankings, click here for the Nursing Home Compare section of the www.medicare.gov site.