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Long-Term Care Insurance Update

The Centers for Medicaid and Medicare services Medicare Handbook reports that  seven out ten people will need some kind of long-term care (LTC).  A recent Nationwide Retirement Institute poll found that only 14% of adults aged fifty and older have LTC insurance.  Many people believe that Medicare pays for LTC costs.  Not true. Medicare payments for skilled care are limited.

As a result, the chance that a LTC event will negatively impact a person or family’s financial condition is great.   The most recent Genworth Cost of Care Survey estimates that the median cost of care ranges from $3,813 a month for a person to receive care at home to $5,545 a month for  private skilled nursing care.

Many do not see the value of paying premiums for stand alone insurance and would rather take the risk.  Consequently, the insurance industry is adapting.  More companies now offer life insurance with LTC or chronic illness riders.  According to a Milliman survey, sales of “hybrid” products is rising.  In 2016, 24% of universal life insurance policies contained a LTC rider.  Buyers like the idea that they will get something back for the premiums they pay.

If you are considering long-term care insurance, this is a good time to review your existing insurance.  Policies with cash value may be suitable for an exchange to a new policy.  There are some ways to fund LTC that can be more favorable from a tax standpoint.   Some businesses entities can deduct LTC premiums as a business expense.  Up to some limits, premiums paid from a health saving account are qualified medical expenses.

So, if you have haven’t given LTC much thought lately, maybe you should now. Although LTC insurance products are changing, a person’s age and health must still be considered when writing a policy. Finally, if you aren’t interested in LTC insurance, you should think about who will provide care if you need it.  Most of the time, care comes from a family member.  No one ever wants to be a burden, but it seems like not insuring for a long-term care event will increase the chances that that will happen.



About LPL Financial
LPL Financial (Nasdaq: LPLA) was founded on the principle that the firm should work for the advisor, and not the other way around. Today, LPL is a leader in the markets we serve,* supporting nearly 20,000 financial advisors, and approximately 800 institution based investment programs and 500 independent RIA firms nationwide. We are steadfast in our commitment to the advisor-centered model and the belief that Americans deserve access to personalized guidance from a financial advisor. At LPL, independence means that advisors have the freedom they deserve to choose the business model, services, and technology resources that allow them to run their perfect practice. And they have the freedom to manage their client relationships, because they know their clients best. Simply put, we take care of our advisors, so they can take care of their clients

*Top RIA custodian (Cerulli Associates, 2020 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S (Based on total revenues, Financial Planning magazine 1996-2021); No. 1 provider of third-party brokerage services to banks and credit unions (2020-2021 Kehrer Bielan Research & Consulting Annual TPM Report); Fortune 400 Company as of June 2021. LPL and its affiliated companies provide financial services only from the United States.

Jones & Company and LPL Financial are separate companies.

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