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If you have a major illness or injury—such as a stroke, heart attack or broken hip—and need assistance with activities of daily living, such as bathing or dressing, you may need long-term care. If you do need care, you may need nursing home or home care for only a short time. Or, you may need these services for many months, years or the rest of your life.
It’s hard to know if and when you’ll need long-term care, but the statistics that follow may help:
Long-term care insurance is one way you may pay for long-term care. This type of insurance will pay or reimburse you for some or all of your long-term care costs. A federal law, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) gives some federal income tax advantages to people who buy certain long-term care insurance policies. You should check with your state insurance department or insurance counseling program for information about tax-qualified policies. Check with your tax advisor to learn if the tax advantages make sense for you.
Whether you should buy a long-term care insurance policy depends on your age, health, overall retirement goals, income and assets. However, carefully consider whether buying a policy makes financial sense if you can’t afford the premium or aren’t sure you can pay the premium, including any increases, for the rest of your life. If you already have health problems that could lead to long-term care (for example, Alzheimer’s disease or Parkinson’s disease), you probably won’t be able to buy a policy. Insurance companies have medical underwriting standards to keep the cost of long-term care insurance affordable. If companies didn’t have these standards, most people wouldn’t buy long-term care insurance until they needed long-term care. ( see personal worksheet)
Let me help you build a plan to best help your family deal with the consequence of extended care.
Source: A Shopper's Guide to Long-Term Care Insurance – 2019 National Association of Insurance Commissioner