Too often, people planning their estates focus on tax and asset-protection issues and overlook long-term health care needs. But the high cost of long-term care (LTC) can quickly devour resources you need to maintain your lifestyle during retirement and provide for your children or other heirs.
LTC expenses, which can easily reach into six figures annually, aren’t covered by regular health insurance policies. And Medicare provides little assistance, if any. So it’s important to have a plan for financing these costs.
One option to consider is an LTC insurance policy. Although these policies are expensive, under the right circumstances they can prevent LTC costs from depleting assets you’ve set aside for retirement and estate planning.
If your LTC policy is “tax-qualified,” any benefits you receive will be excluded from your taxable income — subject to certain limited exceptions — and you’ll be able to deduct a portion of your premium payments. Tax-qualified policies are guaranteed renewable and noncancelable, don’t delay coverage of pre-existing conditions more than six months, and meet certain other requirements.
To be sure that LTC costs are considered as part of an integrated estate and financial plan, contact us. We can work with you and your other advisors to help you determine whether LTC insurance or another funding option best fits your needs.