Here’s Why You Should Consider Long-Term Care Insurance

What is long-term care and who may need it? Well, to start with it’s not just for “old people.” In fact, of those in need of long-term care, 37% are age 64 and younger, according to the American Association for Long-Term Care Insurance.

Long-term care refers to help with daily activities that people with disabilities or chronic, longer-lasting illnesses may need, such as help with eating, bathing and dressing. Long-term care also includes assistance for those suffering from cognitive impairments, such as Alzheimer’s disease and dementia. In addition, this type of care can be provided in a variety of settings, such as your home, an assisted living community or in a nursing home.

What you think may pay for these services—health insurance and disability insurance—typically do not.

Instead, a typical long-term care insurance policy helps cover the cost of long-term care services, including:

• Assistance in your home with daily activities, such as bathing, dressing, meals and housekeeping services
• Visiting nurses and/or home health aides who come to your home
• Services available in your community, such as adult day care
• The cost of an assisted living community
• Nursing home care

While the good news is that people are living longer, the bad news is that increased life expectancy also increases the odds of needing long-term care services, which can be expensive.

Without long-term care insurance to help meet the cost of needed long-term care services, you run the risk of depleting a lifetime of savings. With long-term care insurance, you’re in a better financial position to make the choice of what long-term care services you receive and where you receive them.

In addition qualified long-term care insurance receives favorable income tax treatment. The benefits from qualified long-term care insurance, for the most part, are not taxable income to the recipient, up to a daily limit ($330 for 2014).

Eligible premiums paid for qualified long-term care insurance can be applied toward meeting the 7.5% “floor” for medical expense deductions on your federal income tax return. The amount of eligible long-term care premium that can be applied to the 7.5% floor depends on your age.

Because there are so many factors involved with long-term care insurance, it may seem overwhelming. But an insurance agent can sit down with you, at no cost, and help you find a policy to meet your needs and budget. If you don’t have an agent or are unsure how to select one, you can start here.