How do I determine the policy benefits that are right for me?

Prospective buyers of Long Term Care Insurance should consider their age, income, asset base and tolerance for financial risk. Some people prefer a "lean" approach in selecting daily benefits and benefit periods, either as a cost-saving measure or as a plan to augment current assets allocated for Long Term Care. Other people have lower risk tolerance and would prefer their policies to have more enriched benefits to alleviate worry in the future. A Long Term Care professional often can be helpful in assessing your situation and make recommendations. It is an hour well spent to navigate the various companies offering policies and the differing benefits so that the policy fits your situation.

Can I change benefits once my policy is issued?

Yes. When increasing benefits, you will be medically underwritten again for increased benefit approval. Also, the premium for the increased amount will be computed at the age you are when you apply for the increase. You may also reduce your benefits without medical underwriting.

How is premium determined?

Premium is determined by the amount of daily benefit, benefit period and elimination period selected when applying for a policy. When benefits are selected, your age also determines premium. Occasionally, an insurance company will approve coverage at an increased amount of premium if the existing health conditions of the applicant warrant it.

Also, there are additional premiums for any riders, such as inflation protection. Conversely, there are also spousal discounts which may lower premiums. Some companies also offer lower premiums to those in excellent health.

I'm a veteran. Will the VA pay for my care?

Benefits are available for those with severe service related illnesses under their priority group system. Although the Veterans Millennium Health Care Act "guaranteed" access to Long Term Care benefits, coverage is rationed based on funding and the veteran's ability to contribute to the cost. It may be wise to contact the Veterans Administration for information pertaining to your individual situation.

Are there any tax advantages with Long Term Care Insurance?

Since the passage of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, Long Term Care policy holders with qualified policies have the following advantages:

• Qualified LTC policies are tax deductible if you itemize and if your total expenses (including LTC premiums) exceed 7.5% of your total adjusted gross income.
• Benefit payments from qualified Long Term Care policies are treated as tax free and not subject to Federal taxation. Some states also have this provision.
• Employer LTC premium contributions made for employees and spouses may be 100% deductible as an ordinary business expense.

Benefits remain non-taxable to the employee.

I have plenty of assets to carry me through my retirement. Why should I consider Long Term Care Insurance?

You are one of the fortunate few. Consider the steps you took to arrive where you are today. Probably you planned well and made good decisions. Long Term Care today costs between $60,000 and $100,000 annually and it will be much higher in the future. Would it not be a good strategy to use a portion of interest from your assets to provide the safety net of Long Term Care Insurance? Again, it depends on your risk tolerance.