Long-Term Care Insurance 101: What It Covers and When It Pays

Long-term care insurance helps the policyowner pay for the costs associated with long-term care support and services. Long-term care insurance generally covers care not covered by health insurance, Medicare, or Medicaid. Long-term care insurance benefits are typically triggered by a loss of two or more activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking. People who file a claim for long-term care insurance benefits must verify medical eligibility and, once approved, typically wait 90 days (the elimination period) before benefits begin.

There are a variety of policy options that can cover home care, assisted living, adult day care, respite care, hospice care, nursing homes, and memory care facilities. Long-Term Care insurance policies can be purchased on an individual basis as either an LTC-specific policy or a hybrid life and LTC policy. A hybrid policy provides death benefit protection for the owner, but once a need for long-term care arises, it converts to provide that coverage. If LTC coverage is never needed, the policy can be surrendered for its cash value or kept in force to pay a death benefit.

As is always the case with purchasing insurance, the younger and healthier a person is when they buy the policy, the better their options and the more affordable their premiums will be.

Another option to cover long-term care needs is liquidating an unneeded or unwanted life insurance policy through an LTC-Life Settlement, which will cover any form of care a person wants.

It is always best to work with information and experts to help you navigate these tricky issues. Visit Retirement Genius today to learn more about how to Retire Like a Genius!

Health Insurance Basics: Premiums, Networks, ACA & HSAs

Health insurance pays for medical, surgical, and pharmacy expenses, and sometimes dental expenses, for individuals and covered family members. Most Americans receive health insurance through employer-sponsored benefits packages, with a portion of the premiums deducted from paychecks. Health insurance premiums are tax-deductible for employers, and the benefits are provided to employees tax-free. Health insurance can also be obtained on an individual basis and may be tax-deductible for the policyowner.

Health insurance requires premium payments, and most plans also charge deductibles, copays, and coinsurance. The trade-off between how much you will pay in premiums and how much you will pay out of pocket when care is needed should be understood when choosing a plan based on how much care a person thinks they will need. A frequent healthcare user would be better off paying higher premiums and lower out-of-pocket costs, whereas someone young and healthy would be better off paying lower premiums and higher out-of-pocket costs.

Health insurance is available in many forms, such as managed care plans, also known as HMOs or PPOs, that require policyholders to receive care “in-network” from designated healthcare providers. If patients seek care “outside of network”, they must pay a higher percentage of the cost or could even be denied coverage. Plans for lower-income individuals can be accessed through the Affordable Care Act (ACA), and short-term coverage can be obtained for people who need to bridge a short period, such as transitioning from college to employment or while waiting to turn 65 and enroll in Medicare.

A common form of health coverage today is a “High Deductible” plan combined with a Health Savings Account (HSA). An HSA is a tax-advantaged bank account funded by pre-tax wage contributions to help pay for qualified medical expenses. Contributions made to an HSA do not have to be used or withdrawn during the tax year, and any unused contributions can be rolled over to the following year. HSAs are funded with pre-tax dollars, contributions are 100% tax-deductible, and any amounts used to pay for qualified medical expenses are tax-free.

It is always best to work with information and experts to help you navigate these tricky issues. Visit Retirement Genius today to learn more about how to Retire Like a Genius!

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