the elements of a long term care insurance policy n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
The Elements of a Long-Term Care Insurance Policy PowerPoint Presentation
Download Presentation
The Elements of a Long-Term Care Insurance Policy

Loading in 2 Seconds...

play fullscreen
1 / 10

The Elements of a Long-Term Care Insurance Policy - PowerPoint PPT Presentation


  • 112 Views
  • Uploaded on

The Elements of a Long-Term Care Insurance Policy. The 4 key elements of a policy Riders to consider Benefit Trigger State Partnership Programs Tax Qualified. 4 Key Elements of a Policy. Benefit Payments Benefit Multiplier Elimination Period Inflation Protection. Benefit Payments.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'The Elements of a Long-Term Care Insurance Policy' - quinn-tran


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
the elements of a long term care insurance policy

The Elements of a Long-Term Care Insurance Policy

The 4 key elements of a policy

Riders to consider

Benefit Trigger

State Partnership Programs

Tax Qualified

4 key elements of a policy
4 Key Elements of a Policy
  • Benefit Payments
  • Benefit Multiplier
  • Elimination Period
  • Inflation Protection
benefit payments
Benefit Payments

This is the benefit amount that you want to be covered for long-term care expenses. Most policies have a choice of daily or monthly maximums that are reimbursable once the benefit triggers have been met.

Daily maximums range from $50-$400/day in $5 or $10 increments

Monthly maximums range from $1,500-$12,000 in $50 or $100 increments

benefit multiplier
Benefit Multiplier

The Benefit Multiplier is a factor based on time (months or days) used to calculate your initial Coverage Maximum, also know as your total pool of money

Example:

$3,000 x 36 month = $108,000

(monthly max) (benefit multiplier) (Pool of money)

If the benefit payments are less than your daily or monthly maximum, benefits will last until your pool of money is exhausted.

Monthly Multiplier options: 24,36,48,60,72,96, or 120

Day Multiplier options: 730,1095,1460,1825,2190,2920 or 3650

elimination period
Elimination Period

An elimination period is similar to a deductible. When you need long-term care, it is the time period during which you must pay for your own care without being reimbursed under the policy.

Elimination Periods: 30, 60, 90, 180 or 365 days

Riders of note:

Calendar Day Elimination Period

Waiver of Home Care Elimination Period

(1st day Home Care)

inflation protection
Inflation Protection

Inflation protection helps the value of your coverage keep up with the rising costs of care, allowing for annual increases in your daily or monthly maximum and pool of money for as long as your coverage remains in force.

Options Include:

Compound Inflation (3%, 4%, 5%)

Simple inflation (5%)

Future Purchase Option

No Inflation Protection

Please note: inflation is a critical choice when qualifying for partnership coverage. Please review the appropriate inflation choice based on the client’s age.

riders to consider
Riders to Consider
  • Shared Care: The ability to access your spouse’s benefits should you exhaust the benefits on your policy
  • Survivorship: With this rider, upon the demise of one spouse, the surviving spouse’s policy premium is paid up for life.
  • Waiver of Elimination Period for Home Care: This waives your deductible should you need care at home
  • Calendar Day Elimination Period: This follows the calendar rather than service day for your deductible
  • Return of Premium: This returns your premium to your estate, less claims upon your demise
  • Restoration of Benefits: This restores your benefits back to day one should you recover from your condition and no longer need benefits for a period of 180 days or more
benefit trigger
Benefit Trigger

Your benefit trigger stipulates when you are eligible for benefits. Policies typically require one of these 2 triggers:

  • That you need assistance for 90 days or more with 2 or more Activities of Daily Living (ADL) (Bathing, Dressing, Eating, Transferring, Toileting & Continence)
  • Or that you require substantial supervision as a result of a severe cognitive impairment
state partnership programs
State Partnership Programs

Many states offer Partnership programs. These programs usually work on a dollar for dollar basis. If you purchase a long-term care insurance policy, that qualifies for Partnership status, with a benefit pool of $108,000, and you were to exhaust your benefits. Your state would allow an asset disregard of $108,000 (dollar for dollar) should you apply for Medicaid. This would enable you to save some of your assets as they are not counted towards the Medicaid thresholds. In order to qualify for Partnership status you do have to purchase an inflation rider based on age requirements.

Age 60 or younger – Compound Inflation

Age 61- 75 – some form of inflation protection

Age 76 and older – no inflation protection is required

tax qualified
Tax Qualified

A tax deduction is available to those tax-payers that itemize. A medical expense deduction is allowable to extent that such expenses (including payment of eligible LTCI premium) exceeds 10% of Adjusted Gross Income. Please review code to determine income eligibility and phase in period.

Attained Age in Tax Year Limitation on Premium

Age 40 or Less $370

Age 41-50 $700

Age 51-60 $1,400

Age 61-70 $3,720

Age 71 and older $4,660

This is not meant as tax advice. We recommend you seek guidance from your tax advisor or counsel.