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Long-Term Care Insurance

By David Luhman on Mon, 05/11/2009 - 23:31

Long-Term Care Insurance

Do you need long-term care insurance?

Items to consider before purchasing long-term care insurance

Do you need long-term care insurance?

Studies indicate that 40 percent of all seniors spend "some time" in a nursing home

But "some time" often means only a few days or weeks

There's no doubt that nursing homes are expensive

Typical cost is thousands of dollars a month

But long-term care insurance is also very expensive

Premiums can easily run $2,000 a year, depending on age

Items to consider before purchasing long-term care insurance

Consider delaying the purchase of long-term care insurance

It's a new industry, so inexperienced insurers are probably over-pricing policies

Get as long of an elimination period as you can afford

This is the time spent in the nursing home when you can't collect benefits

Much like a deductible, longer elimination periods mean lower premiums

Increasing the elimination period from 30 days to 90 days or more reduces your premiums

Consider limiting the period of coverage to three to five years

The majority of nursing home stays are well below three years

Shorter periods of coverage will reduce your premiums

A new tax incentive to obtain long-term care insurance

Under new 1996 tax law, long-term care premiums will be deductible on Schedule A of your tax return as a medical expense

Better yet, try to get long-term care insurance as a tax-free medical benefit from your employer

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