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The Best And Worst Ideas For Long-Term
Care Insurance
Although only 6,000 long- term
care insurance policies were sold during the 1990s, sales
of long-term care insurance policies are now increasing at
the rate of 20% per year, and this type of policy is considered
to be one of the hottest insurance products around. Essentially,
purchase of a long-term care policy can:
- Protect retirement and estate assets
- Provide the resources to avoid
nursing home care and remain independent
- Prevent dependence on welfare and
other government programs
Whether the purchase of a long-term
care policy is appropriate depends on such factors as: (1)
the financial resources of the person(s) considering the policy;
(2) Federal and state tax provisions whereby. in some instances,
the government shares the cost of the premium through tax
deductions or tax credits; (3) the type and amount of benefits
being provided, and (4) the incapacity that would trigger
benefit payments. Even if clients have evaluated long-term
care insurance within the past three years, we recommend another
look, because the features of these policies are constantly
changing as are the tax regulations surrounding this coverage.
For example, legislation is being drafted by Congress that
would establish a $3,000 per year tax credit toward caregiving
expenses for severely impaired people with long-term care
needs and that would allow qualified long-term care insurance
purchasers to deduct their premiums on their Federal income
tax return whether they itemize or not. The amount of the
deduction would be directly related to the premiums paid.
If you'd like to discuss long-term care insurance needs more
fully with us and would like assistance in selecting a suitable
long-term care insurance package, we'd be glad to assist you.
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