Pros and Cons of Long-Term-Care Insurance

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of those policyholders who have benefitted financially from their LTC insurance, VERSUS THOSE WHO HAVE LOST A BUNDLE ON IT, and I'll show you the easy path to making a decision about whether to buy it. The fact of the matter is this: If any private LTC insurance company is "offering a good deal", they will most likely be bankrupt before you get to the nursing home to collect---OR, they will keep raising the premiums until you cannot afford them and have to drop before you get disabled enough to qualify. The modern policies are all priced to extract from you (in advance) a lot more than the cost of an "average-length" stay in a facility. That's they only way the "business model" can work.

Muser of NM 12:31PM January 16, 2010

Mr. Noone from KS stated:
"Interestingly, only LTC policies that require an insured have more than one disability or inability to perform a necessary function before being confined to a nursing home are "qualified" for a medical deduction on income taxes. ( dementia excluded ) Thus, only a policy that makes it more difficult to get benefits is entitled to a tax deduction."
What Mr. Noone is referring to is "tax qualified" policies. If a policy meets the federal guidelines for long term care insurance, it is consider "tax qualified". The premiums are eligible for tax deductions and credits on federal and state income tax returns. And the benefits are tax-free.
Contrary to Mr. Noone's statement, a "cognitive impairment" benefit trigger (e.g. Alzheimer's or senile dementia) is required by federal law to be included in all tax-qualified policies.
In fact, Alzheimer's, dementia, and other forms of cognitive impairments are the single largest reason for long term care insurance claims for all long term care insurance policies (including tax-qualified policies).
You do NOT have to sacrifice "coverage for dementia" in order to get tax-deductibility.
Scott A. Olson
www.LTCInsuranceShopper.com

Scott A Olson of CA 2:09PM December 29, 2009

Interestingly, only LTC policies that require an insured have more than one disability or inability to perform a necessary function before being confined to a nursing home are "qualified" for a medical deduction on income taxes. ( dementia excluded ) Thus, only a policy that makes it more difficult to get benefits is entitled to a tax deduction. This of course makes such policies more saleable while limiting exposure to paying claims at the same time. Any LTC policy that provides only benefits for LTC treatment without accumulating any cash value saves the government on Medicaid costs, and should be entitled to the deductions allowed by law. Why should the government favor LTC policies that make it harder to trigger liability to pay benefits ?

Jim Noone of KS 2:22PM December 23, 2009

The checking first relative to price wise may be wise? Mu LTC premium 5 years ago was 1,600.00 per year, now it is 2.200 and the benefits have decreased with Bankers Life. Like all insurance companies they are out to make money with least expense for share holders. I propose a "Public Option" through Medicare policy that can be purchased by anyone. In the long run, I bet it would save money for all?

jim erwin of MI 9:51AM December 23, 2009