What is long-term care insurance and why is it important?
What do we mean by long-term care insurance?
Long-term care insurance is a specific insurance product that is only sold in Canada, the UK, and the US and helps people pay for the costs of care that exceed a preset period of time. It is often abbreviated as LTC or LTCi. In any case, this type of insurance covers what health insurance, Medicaid and Medicare do not normally include your assets in certain situations. The main advantage that this type of insurance provides is that it eases the burden of your children having to care for you for the rest of your life.
In most cases, it is provided to those people who can no longer perform those activities and tasks that are required in daily life. This includes:
• adult day care
• Alzheimer’s Facilities
• assisted living
• hospice care
• nursing home facilities
• respite care (interim short-term care that occurs before you are admitted to long-term care)
You can also pay for home care if it’s needed, and in most cases from the first day it’s needed. You also pay accommodation or visit:
• caregivers
• companions
• house keepers
• private duty nurses
• therapists
In addition, coverage up to the maximum policy benefit is provided 24 hours a day, 7 days a week. As you can see, the coverage provided is very comprehensive.
Why is long-term care insurance so important?
It is extremely important because of the above benefits it provides to the policy holder. However, it also provides additional benefits, including:
It helps cover out-of-pocket costs so the person doesn’t have to feel embarrassed or uncomfortable that their children have to take care of them. Savings accounts can be depleted quickly if a person or their family has to pay for those long-term care expenses.
In some cases, the premiums paid for the policy may be deducted from the individual’s income taxes. The individual’s age determines the size of their income tax deduction. In addition, the benefits paid by the policy may be omitted from the person’s gross income.
The amount of business premium deductions is generally determined by the particular type of business. Those premiums are typically 100% deductible to the corporation paying them, as long as you haven’t included them in the employee’s taxable income.
Just remember that without long-term care insurance, you (or one of your children or other family members) will have to bear all of your expenses (up to $70,000 per year for nursing home care). If you don’t have long-term care insurance, what assets will you liquidate when you need care? What if you need that care for 2 to 4 years? We are living longer and with a better quality of life, due to the great medical advancement, which means that you may just want help at home. Home care is growing and is preferred in most cases. Most of us will want to live in our own home for as long as possible. At some point, it can make life easier and lengthen the number of years we can live at home simply by having long-term care benefits.