The lights are twinkling and the snow is piling in the Tahoe basin (where our content is written). We’re deep into the holiday season!
If you’re spending more time with family, you might be thinking about your aging loved ones’ futures. Maybe the joy in the air this time of year might have you watching your kids with extra pride – a reminder that you want to set them up for the best lives they can possibly have.
Either way, we want to protect the ones we love most. Life and disability insurance do this in ways that most savings cannot. Long-term care insurance shields legacies and detailed estate plans from being altered in the face of a (nearly) inevitable need for some sort of long-term care help.
To help you navigate these topics, here are five LTC-related reminders to wrap up 2022.
1) Genworth’s Cost of Care Tool
Use Genworth’s Cost of Care microsite to calculate the real cost of long-term care services in your region. It’s essential to understand how much your client might have to pay out-of-pocket without an LTC policy in place.
2) Tax Deductibility of Long-Term Care Insurance
Review the 2022 numbers for qualified long-term care insurance tax deductibility. Traditional long-term care insurance policy premiums can be tax deductible as a medical expense – above the line! – for individuals, self-employed people, and C-corp and S-corp owners/partners. Plus, premiums can be paid with pretax dollars through an HSA! We’ve also updated the numbers for the 2023 tax year.
3) Are Rate Increases a Thing of the Past?
The Society of Actuaries suggests so and has reported that “LTC policies priced today are significantly less likely to need future premium rate increases than any earlier product generation.” Continuing to avoid the long-term care conversation because of rate increase history is kind of like refusing to drive a car because they didn’t used to have airbags. We have the data now and actuaries know what to do with it.
4) Development of Public Long-Term Care Programs
Like Washington, at least ten other states are looking into public long-term care programs. We’re glad the need for long-term care is finally getting the attention it deserves, but we’re going to need a “bigger boat” than a $36,500 total maximum benefit (what the WA Cares Act offers its residents). This is why California’s impending public program is looking to work with private long-term care insurance companies in a front-end/back-end collaboration (more below)…
5) California’s Future Long-Term Care Program
Since March 2021, The California Long-Term Care Taskforce has been developing the state’s future public LTC program and a final feasibility report is almost ready. This report is mandated to be presented to the governor by January 1, 2023. Do your California clients have qualifying long-term care insurance policies in place to either opt-out or adequately supplement this future state-mandated LTC program? Now is the time to get a plan in place! (Remember what happened in Washington state?).
If you only look at two of the above items, make sure you download the 2023 LTC taxability sheet and if you’re an advisor in California, keep your eyes peeled for updates on the state’s future public LTC program! More LTC and disability insurance content at our blog.