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Think you don't need long term care insurance, think again

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Nearly 60 percent of those over age 65 will require at least some type of long-term care services during their lifetime.
What exactly is Long-term care insurance (LTC or LTCI)? It is an insurance product sold in the United States and United Kingdom and helps provide for the cost of long-term care beyond a predetermined period. Long-term care insurance covers care generally not covered by health insurance, Medicare or Medicaid.

People who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking.

According to the American Association for Long Term Care Insurance, “Tax-qualified LTCI premiums are considered a medical expense. For an individual who itemizes tax deductions, medical expenses are deductible to the extent that they exceed the current amount required to meet the individual’s Adjusted Gross Income (AGI).

The amount of the LTCI premium treated as a medical expense is limited to the eligible LTCI premiums, as defined by Internal Revenue Code 213(d), based on the age of the insured individual. That portion of the LTCI premium that exceeds the eligible LTCI premium is not included as a medical expense.

Individual taxpayers can treat premiums paid for tax-qualified long-term care insurance for themselves, their spouse or any tax dependents (such as parents) as a personal medical expense.

Please consult your tax attorney or CPA to see if you qualify for a tax deduction. According to the AALTCI, age is not a determining factor in requiring long-term care. About 40% of those receiving long-term care today are between 18and 64.

Remember that once a change of health occurs, long-term care insurance may not be available. In the United States, Medicaid provides some of the benefits of long term care insurance. A welfare program, Medicaid does provide medically necessary services for people with limited resources who need nursing home care.

However, Medicaid generally does not cover long-term care provided in a home setting or for assisted living. People who need long-term care often prefer care in the home or in a private room in an assisted living facility. For additional information on long term care insurance, such as types of policies, contact your insurance agent, accountant or tax attorney. This article was excerpted from the book, "Where will I live now?", available on Amazon.

American Association for Long Term Care Insurance (AALTCI)



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