Adding Long-Term Care Insurance
Because Americans are living longer, many will need some form of long-term care. Unfortunately, the cost of that care can be devastating. The solution is long-term care insurance, which typically pays for nonmedical care that health insurance policies or Medicare generally don't cover.
"Anyone over the age of 50 should plan for long-term care," says Jesse R. Slome, executive director of the American Association for Long-Term Care Insurance.
Most LTCI policies are individual, says Slome, but more companies are offering this product as a benefit to employees and their families. Companies can offer coverage as a voluntary benefit (meaning the employee pays the entire cost) or pay for a core plan with limited benefits and allow employees to increase coverage at their own expense. An estimated 40 to 50 insurers provide LTCI products with varying terms.
For entrepreneurs, LTCI premiums may be tax-deductible as a business expense. Check with your tax advisor to choose and structure a plan with this benefit in mind.
Slome recommends talking to an LTCI specialist and asking these questions: Is the policy federally tax-qualified? Does the policy allow you to use benefits for home care? Are benefit maximums calculated on a daily or monthly basis? What discounts are available, and how does one qualify for them?