If you’ve been straddling the planning conversation; thinking about whether long term care insurance is appropriate for you, is affordable, or if “self insuring ” (still) makes sense , there has never been a better time to have a conversation and revisit :
The Why, What and How: Long Term Care Insurance today : Why?
We are living longer lives! Government programs are limited and unreliable Mitigating risk and longevity planning is statistically and economically sound. Blended families and second marriages for couples and adult children Protecting your health, your money, your lifestyle and your family’s well being.
What?
Today’s long-term care solutions give you flexibility and a choice in prioritizing what is most important. You can prioritize according to budget, leverage, flexibility, and tax efficiency.
The choices are fundamentally between “stand alone; traditional policies” or asset based solutions that combine a life insurance platform with long term care.
The Biggest Bang for your Buck, Stand Alone LTC
If you live in New York State, are a business owner, or itemize medical expenses, you have meaningful deductions and credits from the federal and state government.
If you prefer a low annual premium, stand-alone Long Term Care plans pack a punch. Lots of options in the way of riders that include shared care plans for spouses, innovative inflation protection and waivers for elimination periods.
Having just come back from a conference laden with actuaries, (that’s a party waiting to happen) the news has never been better.
Stand-alone polices written after 2010 have less than a 10 percent chance of a rate increase!
Today’s generation of policies are priced appropriately, and reflect the reality of claims experience, women’s rates (unisex rates has now given way to gender specific pricing), longevity and today’s low interest rates. Legacy policies are “old news”.
Life Insurance and LTC. Asset Based Solutions and Linked Benefits. Where the puck is moving.
Life and LTC hybrids are the new darlings that offer guarantees, limited pay options and death benefit.
You have an “either-or “ scenario with LTC benefits for care or a death benefit as well as a return of premium if you “want out.”
Highly leveraged money for long-term care makes this compelling especially for the “ I can self-insure “ crowd, who can reposition underperforming or dormant assets.
Using life insurance as a foundation and adding a LTC rider (whole life or second to die policies) can be structured to include lifetime benefits and cash value (state specific).
Plans can be tailored for use in ILITs, as executive carve outs and or employee benefits.
How?
Tax incentives and financing ease- even for those who do not want to write a check.
The state and federal government want you to take action! And provide incentives for consumers and business owners.
If you pay taxes in NY State, there is a 20% credit on your annual long-term care insurance premium(s).
Federal deductions are in still in place for those (and their spouses) who own their own businesses.
Consumers with tax hostile money in annuities can reposition their $$ tax free into LTC Insurance.
Dormant and underperforming assets can be better leveraged.
Cash in an annuity? Or a life insurance contract?
You are able to use the cash and reposition tax hostile money to tax free money through a 1035 exchange.
Incentives to make financing your LTC planning painless also extend to Health Savings Accounts, which provide another resource that make paying premiums easier.
Tax Qualified Accounts – Depending on the state, you can fund your long-term care policy tax efficiently. State and age specific.
The landscape of long term care insurance continues to change. Navigating the maze of options has never been more challenging yet easier to finance.
Reframing the conversation of long term care to why, means protecting your family. The how has never been easier.
Information provided Natalie Karp and Rona Loshak, Founding Partners, Karp Loshak Long Term Care Insurance
