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Long-Term Care Insurance

WheelchairAs the Baby Boomer generation ages, caring for the elderly in America is a hot topic. The rising cost of long-term care, either in your home or in an assisted living community, has increased the need for long-term care insurance.

Long-term care (LTC) policies offer many different options, so it’s important to work with a financial planner or trusted insurance agent to select the one that best fits your needs. 

Some things to keep in mind for thinking about long-term care insurance:

  • Consider LTC insurance if your estate has assets worth protecting, but you do not have enough in reserve to pay for care out of your own pocket. Experts suggest spending no more than 5 percent of income on an LTC policy
  • Benefits usually are tax-free, and premiums may be fully or partially deductible.
  • Congress has closed loopholes so you cannot give away your assets in order to qualify for Medicaid. Consult a financial advisor or estate planner before giving your assets to family members.
  • Choose a policy that covers all levels of care (e.g., home health care, assisted living, nursing home).
  • Read the policy, especially the exclusions, carefully. 

There are differences of opinion about the best types of coverage, elimination periods, maximum benefit years and other items found in LTC policies. Be sure you consult with experts before settling on specific benefits. 

To get an idea of the costs for different long-term care options in your area, use AARP’s Long-Term Care Calculator

Social Security Disability Insurance (SSDI)

Social Security disability benefits are paid to people unable to do substantial gainful work because of a health issue. To qualify for SSDI benefits, you have to have paid into Social Security for 10 years and meet a number of other criteria. Learn about disability benefits from the Social Security Administration.

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