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Long Term
Care planning & Insurance
...protecting families, assets, income, past
successes & future dreams!
"The Good News is that people are living longer. The Bad
News is that people are living longer".
Senator John Breaux: Senate Special Committee on Aging -
UPI 06/28/2001 |
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“Expect the best, plan for the worst, and prepare to be surprised.”
-- Denis Waitley
The
much celebrated Baby-Boomers
have reshaped and
redefined American economic life, but their demographic hegemony and
incipient retirements will inspire an economic tidal wave with ripples
reaching out for generations. Many boomers, themselves,
will benefit economically by counseling their peers in preparation for
active aging, longer lives in retirement, and the likelihood of
illnesses and disabilities requiring long term care. Legions of boomers are poised to benefit from your Long Term Care planning expertise! |
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Click for
PDF Version of the LTC Decision Tree |
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WHY SELL A LIFETIME BENEFIT WITH THE CT PARTNERSHIP? |
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The short answer is, “Why not?” If you are quoting a
Lifetime Benefit then you certainly should be proposing the 5% Compounded
Inflation Option and in that situation the price for the non-Partnership
coverage is identical to the Partnership plan.
The reasons don’t stop there, however:
If at some point in the claim period the LTC benefits paid exceed the
value of the patient’s assets, those assets may stay at work to grow up to
the amount of Medicaid Asset Protection earned. Moreover, if the
cost of care at some point exceeds the LTC policy benefits plus available
income the policyholder may apply for Medicaid and receive benefits to
offset the policy shortfall without invading protected assets, and without
losing private-pay status with all the treatment options and benefits of
the policy intact.
That’s a longer answer but short one bears repeating: “Why not?”
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THE CT
PARTNERSHIP FOR LONG TERM CARE
Take
advantage of this generous offer... |
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The CT Partnership staff
has reminded us to pass along to
you their standing offer to meet with you and your employer-clientele
for the purpose of providing you and your client with unbiased information
about the benefits of offering Partnership-approved long-term care insurance
to their employees, retirees and their family members. There is no
charge for this service. The sessions take about 1 hour. We'll set it
up for you or you can call the Partnership office at
(860) 418-6359. |
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Link to The CT Partnership for Long Term Care |
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TAXATION & LONG TERM CARE
INSURANCE
2005 - 2006 - 2007 - 2008 |
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TABLE 1 |
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Entity |
Deductibility |
Income Reporting |
Discrimination Rules |
Tax Treatment
of Benefits |
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Individual |
The lesser of the Premium or
the Eligible Premium from Table 2. Medical Expenses are deductible
to the extent they exceed 7.5% of Adjusted Gross Income. |
N/A |
N/A |
Tax-Free |
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Self-Employed |
Percentage from Table 3 of the
lesser of Premium or Eligible Premium is deductible as a business expense.
The remaining percentage is included as a Medical Expense under the 7.5%
rule. |
No |
None |
Tax-Free |
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S Corporations
Partnerships
LLC's |
Same as self-employed |
The portion of the Premium paid
by the entity on behalf of a partner is included in the partner's income. |
None |
Tax-Free |
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C Corporations |
The entire Premium is fully
deductible by the corporation. |
No |
None |
Tax-Free |
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TABLE 2 |
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Tax Year |
2005 |
2006 |
2007 |
2008 |
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Age |
Eligible Premium
Eligible Deduction: 100% |
Eligible Premium
Eligible Deduction: 100% |
Eligible Premium
Eligible Deduction: 100% |
Eligible Premium
Eligible Deduction: 100% |
| 40 & Under |
$270 |
$280 |
$290 |
$310 |
| 41 - 50 |
$510 |
$530 |
$550 |
$580 |
| 51 - 60 |
$1,020 |
$1,060 |
$1,110 |
$1,150 |
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61 - 70 |
$2,720 |
$2,830 |
$2,950 |
$3,080 |
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71 & Over |
$3,400 |
$3,530 |
$3,680 |
$3,850 |
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Click for (PDF) Tax Summary for 2007 |
Click for (PDF) Tax Summary for 2008 |
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The
True Cost of Waiting
Let’s say a 55-year old is contemplating buying a
long-term care insurance policy with a daily benefit of $200. The inflation
option selected is 5% compound. If the 55-year old waits 5 years, he/she
will not only have to buy the policy based upon the rates for a 60-year old,
he/she will also have forfeited five years of compounding. The $200/day
would have grown to $255/day, and this is the proper comparison. To retain
the value in the contract, for every year you wait you need to buy an
additional 5% of coverage. Therefore, the Cost of Waiting (solely based on
the difference in age) is 25.3%, but the True Cost of Waiting (based on both
difference in age as well as the increase in cost of care) is actually
60.0%.
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Age |
Cost of Waiting |
The
True Cost of Waiting |
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From |
To |
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40 |
45 |
9.6 % |
39.6 % |
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45 |
50 |
8.1 % |
38.0 % |
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50 |
55 |
8.1 % |
38.0 % |
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55 |
60 |
25.3 % |
60.0 % |
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60 |
65 |
34.8 % |
72.0 % |
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65 |
70 |
50.9 % |
92.6 % |
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70 |
75 |
62.6 % |
107.53 % |
The above is based upon a MetLife
VIP2 Ideal policy (CT-P) with the following benefits: $200/day (monthly
reimbursement) – 100% HHC, 4 years, 100-days E.P., 5% compound, preferred &
spousal discount.
Link to printable PDF of this table
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