Long-Term Care Insurance Quote Forms
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Long-Term Care Insurance Information
Long Term Care Insurance
Is it better to have insurance and not need it, or to need insurance and not have it?
Long term care is expensive & care giving impacts the lives of people we love.
Living a long life is a near certainty, planning for it is a necessity.
I started my career as an Occupational Therapist with a Master’s in Health administration managing rehabilitation departments in the nursing home. I left health care when I no longer knew how to provide both ethical and profitable care under the Medicare/Medicaid reimbursement systems. When I learned about long term care insurance, I found my new passion, educating people on how to optimize their opportunities for choices and quality of care while protecting the ones they love.
Nursing homes have become places for the very sick and the poor, which is a bad financial mix. Healthier, wealthier people stay in their own homes, go to assisted living settings or continuing care communities. As needed, they fund private nursing homes or bring private caregivers into the facilities. Most people cannot afford this level of care or at least do not want to fully fund this care and derail their estate plan. Long term care leverages assets to make what you have go so much further. LTC insurance typically does not have to be designed to fully fund LTC expenses to be valuable, there is significant value in offsetting the costs. Most importantly, LTC insurance provides a direction for the family, so that they know that your intent was not to have family perform all your care directly, but to pay for care and minimize the burden.
Payment Sources for LTC:
Medicare is the government’s skilled insurance program paying for doctors, nurses and therapists. Most LTC is unskilled; Medicare does NOT pay for custodial long term care.
Medicaid is the government’s medical insurance for the poor. In order to qualify, you must spend down your assets to poverty levels and any income will be used to offset the cost of care over a minimal level.
Types of Policies
Traditional/Stand-Alone: Typically provides the greatest return for premium paid. HSA’s and MSA’s may fund these products up to age based limits. Tax benefits for the self-employed and business owners
Hybrid: A combination of life and long term care insurance that leverages the long term care benefit - Guaranteed Premium - Return of Premium (at whim or at death)
Life Insurance with LTC Rider: A life insurance product with a rider allowing a portion or all of the death benefit to be eligible for funding qualified long term care expenses.
Alternative Products: Life insurance with chronic care riders, annuities with LTC riders or home care contracts,provide options for those with more significant health issues but are still independent, at time of application, in all aspects of their care.
Since there is no crystal ball… The real question: is it better to have insurance and not need it, or to need insurance and not have it?
If you had LTC insurance & did not need it:
You would have lost the premium paid or the loss of interest on premium paid with a hybrid product. However, in both cases, you would have had the peace of mind that had you needed it, your estate and family were protected. In addition, depending on the policy chosen and state you live in, you may also have had lien protection of a primary home in MA or the value of your long term care benefit protecting again Medicaid Lien with partnership.
If you needed LTC insurance & did not have it:
Problems might include:
Making decisions of which funds to liquidate during crisis
Conflict between siblings regarding responsibilities and finances
Decline in lifestyle and health for the care giving spouse
Stress on children as care giving impacts their employment and relationships.
Inability to afford optimal caregiving or care setting
Losing the home to Medicaid repayment
Inability to leave an inheritance
Regret that this could have been covered with a LTC policy
LTC Insurance provides additional catastrophic financial protection
Massachusetts: Medicaid may put a lien on your house for the amount it spends on your long term care expenses.
A LTC policy may provide more than $870,000 of Medicaid lien recovery of your MA home.
In at least 40 other states: Partnership provides protection from Medicaid spend-down up to the total benefit of the qualified long term care policy.
Tax qualified policies may be eligible for tax deductions
Individuals may use their HSA’s or MSA’s to fund long term care premiums, up to age based limits.
Self-Employed, Partnerships, S-Corps may take age based premium deductions.
Corporations may take full deductions for premiums paid for employees without a taxable event to the employee.
Regardless of whether the premiums are taken as a tax-deduction by the employee or the employer, benefits are received tax free.