| In long-term care, the future is now
When it comes to long-term care, it's not too soon to start thinking like an old person.
That's the advice from financial planners, insurance providers, benefits managers, attorneys and advocates for the elderly who know full well how expensive and complicated the final years of a full life can be. Taking a few steps to prepare for those events while you are in your 50s, 40s or even 30s can be one of the best investments you can make. "You want to make these decisions at your leisure, when you don't have any imminent pressure on you," says Mike Chabalik, a financial planner at Brighton Securities who teaches continuing education courses on preparing for old age. "Doing nothing is the most commonly executed plan, but that can be the most costly." Issues to consider range from large to small, from transferring assets to installing hand rails on the bathroom walls, experts say.
Long-term care can be costly
Dear Karen: I provide health and life insurance for my employees. Recently, an employee asked about long-term-care insurance. What is it?
Answer: Long-term-care insurance pays for institutional or home care for chronically impaired seniors. Although only 13% of full-time employees in private industry are offered long-term-care insurance today, that number is expected to go up as the U.S. population ages, said Larry Hazzard, a senior vice president at Berkshire Life.
"These policies can be pricey because of how rich the benefits are when you receive them," Hazzard said.
You can offer long-term-care insurance to your employees at their expense, or your firm can pay all or part of the cost. Either way, the coverage is discounted when offered through a company rather than being purchased by an individual, Hazzard said.
Long-term care premium might be deductible
For many people, the first thought that comes to mind when they think of insurance is costly premiums. But some insurance comes with tax advantages that can save you money. Consider this tip by the non-profit Life and Health Insurance Foundation for Education: Premiums you pay for long-term care insurance might be tax-deductible. Sixty-five percent of 65-year-olds will require long-term care at some point in their lives. For the many who will require services for several years or more, the cost can be astronomical, so it often makes sense to consider long-term care insurance. Depending on your age, adjusted gross income and other medical expenditures, the premiums might be tax-deductible on your personal income tax. If you are self-employed, there are even greater tax advantages by paying your insurance premiums through your business.
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