Finance Guy: Long-term care insurance policies
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A long-term care policy has to satisfy certain requirements in order to be regarded as a partnership policy. Partnership policy benefits must include:
• Daily or monthly benefit and benefit periods
• Choice of elimination periods
• Comprehensive coverage including home, facility care and adult day care
Inflation protection requirements include:
• Younger than age 60: automatic compound inflation
• 61-75: automatic simple or compound inflation
• 76 and older: inflation protection is optional
All long-term care insurance policies purchased before January 1, 1997 are tax qualified. A tax qualified policy means you may be able to deduct part of the policy premium from your taxes as a medical expense. Likewise, insurance benefits are generally not taxable income.
All partnership policies must be accompanied by a disclosure statement. The state of Texas requires all insurance companies offering partnership policies to certify that agents have completed the training requirements.