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Considering long-term care insurance

On Behalf of | Jan 3, 2022 | Estate Planning |

When a person is creating an estate plan, it is helpful to understand how long-term care insurance may be part of it. This type of insurance provides coverage that may not be offered by traditional health insurance plans.

Coverage and early planning

Long-term care insurance may cover services that provide assistance with activities of daily living, such as bathing, dressing and eating. Many policies require the policyholder to pay for a certain number of care days before the insurance pays. Then, it will reimburse the policyholder for care in their home, a nursing home or an assisted living facility.

It’s helpful to consider a long-term care insurance policy well before a person needs to use it. Statistics indicate that many people over the age of 65 will need long-term care services and care is often needed anywhere between two and four years.

Individuals who do not have long-term care insurance and need care may have to pay for the care themselves, which can be very expensive. It also increases the likelihood that a person could have fewer assets to include in their estate as a result.

Also, long-term care insurance policies may have tax advantages. The premiums may be tax deductible depending on certain thresholds.

Rate factors

The insurance company may review a variety of factors to determine the rate a person will pay for the policy. This includes the applicant’s age, health, gender, marital status and the amount of coverage he or she is requesting.

A long-term care insurance policy can be purchased independently and some individuals may have access to a group plan through their employer. An estate planning attorney can answer specific questions and provide advice.