Long-Term Care Insurance - II

What does long-term care insurance cost? Be aware that long-term care insurance can be expensive. Average annual premiums vary widely based on your age, the length of the policy, and what benefit options you choose. The younger you are when you apply to purchase your policy, the lower your monthly premiums will be, but of course, you will be paying those premiums for a longer period of time. Your health is also an important factor in the premium costs. Unlike the Medicare and Medicaid programs, you must apply for long-term care insurance coverage and be accepted by the insurance company.

Note: You can deduct the premiums for a qualified long-term care plan from your federal taxes if your total medical expenses, including the premiums, exceed 7.5 percent of your adjusted gross income. A number of states also offer tax credits or deductibility incentives for long-term care insurance. Additionally, if you own your own business, this insurance is deductible for you as a business owner. Be sure to talk with your accountant or tax advisor about this deduction.

Should I purchase long-term care insurance? Long-term care is an investment—you purchase it now with the intent of using it later. And like any investment, it should be carefully  considered. There are numerous factors to consider when you think about whether or not to purchase long-term care insurance—among them are your age, your health and your family’s health history, and, very important, your finances—how would the premiums fit into your monthly or yearly budget. As a younger, healthier person, your premiums probably will be lower, but remember, you will be paying them for a longer time. As an older person, your monthly premiums will be higher, but you will pay them for a shorter time. On the other hand, if you wait too long, you might not qualify for a policy because you have a pre-existing condition or overall bad health.

What should I ask myself before I purchase a long-term care insurance policy?

• Is my family able to provide some or all of the care I might need?

• Are there health conditions or health trends in my family that are associated with chronic illnesses that could lead to the need for long-term care? For example, stroke, osteoarthritis or diabetes.

• What do various types of long-term care cost in my area—per day and per year?

• What can I afford to pay for long-term care insurance?