Steven L White

Summer is not over yet and  some of you are already discovering that you will be paying Uncle Sam his fair share of taxes for 2007. Nothing wrong with paying taxes I just feel that we as a community can find good use of our hard earned money. One of the most common overlooked tax strategies is Long Term Health Care Insurance. According to America’s Health Insurance Plan’s ‘A Guide to Long Term Care’ (2004), people of age 65 face at least a 40% lifetime risk of needing long term care. The Government does not and can not pay for Long Term Care Insurance for the estimated 77 million baby boomers. Hence the government is making it easier for you and I to own and pay for the insurance. 

 Business owners can offer Long Term Care Insurance as an employee or executive benefit to key people. Owners can choose to discriminate or not as to whom you like to offer Long Term Care Insurance. If you belong to and association you may receive a 10% discount on the premium with some carriers. Long Term Care Insurance is portable; use it as an employee retentiontool and if your company qualifies, deduct the premiums from your taxable income. Any benefits paid to the employee are generally exempt from taxes and you can have your policy paid up in 10 years if you want. According to Annual Benchmark study by Genworth Financial, long term health cares costs currentlyaverage $70,912 per year and are rising. The Long-Term Care planning handbook, Federal Handbooks Inc. is stating the average claim period is 2.5 to 3 years or longer with Alzheimer’s patients. Remember how long Ronald Reagan lived! With these statistics it is apparent that the rapid depletion of assets is a viable and predictable possibility.

 So ask yourself the million dollar question;Pay the IRS or pay myself and receive a huge benefit?  Ok, let’s look at the alternative to Long Term Care Insurance. There are only 2 others in my opinion; One-the government in the form of Medicaid, and 2- your family. Medicaid has a 5 year look back period of assets. You don’t get to choose where you receive the care and you have to be financially poor to qualify for Medicaid. Believe it or not, certain professions will teach you how to transfer or hide your assets in preparation for Medicaid. Why on earth would you do that? Can you spell tr-o-u-b-l-e? Option 2 is to have a relative or loved one take care of you. Sounds nice but that person will have to change their lifestyle and likely quit their job. And do you really want them dressing, bathing or feeding you? Bottom line… Ladies and gentleman consider Long Term Care Insurance as and integral part of your overall financial strategy. You and your family will be glad that you did.

Steven White