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Long-term care insurance policies can be purchased through private insurance companies, an insurance agent or possibly through your employer. When deciding where to purchase your long-term care policy, make sure you have shopped around to find the coverage that will best fit your needs.
- Individual — Policies sold to individuals can offer a different combination of benefits from one company to the next.
- Group — Your employer may offer a long-term care group insurance plan, or you may be eligible for the Federal Long Term Care Insurance Program (FLTCIP).
Each policy offers different advantages. Individual policies
generally offer more options and flexibility than group policies.
Also, some individual policies may offer significant discounts
for spouses and families.
Depending on your health, they can also be less expensive
than group policies. However, group policies are advantageous
in that you may not have to meet certain medical requirements
to get a policy during an enrollment period. As with individual
policies, your spouse, parents and in-laws may apply for this
coverage as well. Also, in some cases, group policies may
continue coverage even after your employment ends. So
remember to shop around before you buy to find an
individual or group policy that will best cover your needs.
- Association — The policies offered through professional or trade organizations usually give their members a choice of benefit options with negotiated premium discounts.
- Partnership Programs — These are specific state-approved policies designed to provide full or partial protection against the normal Medicaid requirements. The program helps cover long-term care costs without having to spend-down life savings.
- Pooled Benefits — This policy covers more than just one person or more than one kind of long-term care service. It usually has a total benefit that applies to all the individuals covered by the policy.
Tax-Qualified Policies
A tax-qualified long-term care insurance policy offers certain federal income tax advantages. The benefits paid by a tax-qualified policy are generally not taxed as income for federal income tax purposes.
Non-Tax-Qualified Policies
A non-tax-qualified long-term care insurance policy offers fewer restrictions on the eligibility of benefits. Benefits from a non-tax-qualified policy may be taxed as income for federal income tax purposes.
Whichever policy you choose, make sure the benefits will meet your needs.
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