• Mary Sizemore

The Value of Long-Term Care Insurance

Long-term care is in the news daily. Approximately 13 states are in the research and development stages to implement a payroll tax like the Washington State Cares Fund. The WA Cares Fund is funded with a payroll tax of $0.58 per $100 of earnings by workers in the state, and it provides a total lifetime maximum of $36,500 in long-term care benefits.


Recently, the Senate Finance Committee released its new retirement bill titled the EARN Act. Last week it passed the Senate unanimously. The bill would allow people to use up to $2,500 in retirement plan assets per year to pay for long-term care insurance premiums. The State and Federal Governments continue to make it clear that Americans must plan for a long-term care crisis.


There is no denying that your middle-aged clients have concerns about the possibility of becoming dependent and needing long-term care. While statistics vary, the latest projections indicate that roughly 50% of Americans turning 65 today will require professional long-term care services as they age.


It’s our goal as financial planners, advisors, or insurance agents to show our clients the value that comes in owning a long-term care insurance policy.

How do you measure value?

Value = Benefits/Cost

By owning a long-term care insurance policy, your client can experience benefits such as:

· Protecting their assets

· Ensuring their family does not need to be a caregiver on a full-time basis

· Maintaining their choice on where care is received

· Important tax deductions especially to business owners

· Securing the lifestyle of their companion, spouse, or children


The cost of owning a long-term care insurance policy varies. The premium is based on your client’s age and health at the time of purchase along with the benefits that are selected. For a 55-year-old couple, with $3,000/month in benefits ($36,000/year) and a total benefit maximum of $120,000, the premium combined for both of them is $131/month. Long-term care insurance can be affordable. It can be tailored to your client’s budget and premium tolerance. Additionally, premiums can be paid using HSAs, 1035 exchanges from Life or Annuities policies, IRA funds, or 401k dollars.


For assistance with your client’s long-term care insurance planning, please contact a member of our team at 1-800-945-1953

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