The Basics of Long-Term Care Insurance

Thinking about the need and the costs of long-term care is enough to make anyone uncomfortable. But while it's a difficult subject to talk about, it's also a topic that often generates lots of questions and misunderstanding.

Consider this: The median cost of a semi-private room in a nursing home now exceeds $90,000 per year, with wide-ranging variations from state to state.1

Who Pays?

For the most part, those who need long-term care are left to foot the bill on their own. Neither Medicare, nor Medicare supplemental coverage ("Medigap"), nor standard health insurance policies cover long-term care. That's why long-term care insurance may be so important. Since premium costs are based on your age and health at the time of purchase, the younger and healthier you are when you purchase a policy, the lower the premium you're apt to pay during the life of the plan.

As you evaluate long-term care insurance, consider the following variables:

Finally, keep in mind that most long-term care policies sold today are federally tax qualified, which means premiums paid and out-of-pocket expenses are typically deductible. Also, long-term care benefits received are, in general, not taxed as income up to certain limits. Consider meeting with a financial expert to discuss your particular situation.

1Source: Genworth Financial. Genworth 2019 Cost of Care Survey, 2019.


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