The 4 key elements of a policy
Riders to consider
Benefit Trigger
State Partnership Programs
Tax Qualified
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Benefit Payments
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Benefit Multiplier
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Elimination Period
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Inflation Protection
This is the benefit amount that you want to be
covered for long-term care expenses. Most
policies have a choice of daily or monthly
maximums that are reimbursable once the
benefit triggers have been met.
Daily maximums range from $50-$400/day in
$5 or $10 increments
Monthly maximums range from $1,500$12,000 in $50 or $100 increments
The Benefit Multiplier is a factor based on time (months or days)
used to calculate your initial Coverage Maximum, also know as
your total pool of money
Example:
$3,000
x
(monthly max)
36 month
(benefit multiplier)
= $108,000
(Pool of money)
If the benefit payments are less than your daily or monthly
maximum, benefits will last until your pool of money is
exhausted.
Monthly Multiplier options: 24,36,48,60,72,96, or 120
Day Multiplier options: 730,1095,1460,1825,2190,2920 or 3650
An elimination period is similar to a deductible.
When you need long-term care, it is the time
period during which you must pay for your own
care without being reimbursed under the policy.
Elimination Periods: 30, 60, 90, 180 or 365 days
Riders of note:
Calendar Day Elimination Period
Waiver of Home Care Elimination Period
(1st day Home Care)
Inflation protection helps the value of your coverage keep up
with the rising costs of care, allowing for annual increases in
your daily or monthly maximum and pool of money for as long
as your coverage remains in force.
Options Include:
Compound Inflation (3%, 4%, 5%)
Simple inflation (5%)
Future Purchase Option
No Inflation Protection
Please note: inflation is a critical choice when qualifying for
partnership coverage. Please review the appropriate inflation
choice based on the client’s age.
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Shared Care: The ability to access your spouse’s benefits
should you exhaust the benefits on your policy
Survivorship: With this rider, upon the demise of one
spouse, the surviving spouse’s policy premium is paid up
for life.
Waiver of Elimination Period for Home Care: This waives
your deductible should you need care at home
Calendar Day Elimination Period: This follows the calendar
rather than service day for your deductible
Return of Premium: This returns your premium to your
estate, less claims upon your demise
Restoration of Benefits: This restores your benefits back to
day one should you recover from your condition and no
longer need benefits for a period of 180 days or more
Your benefit trigger stipulates when you are
eligible for benefits. Policies typically require
one of these 2 triggers:
 That you need assistance for 90 days or more
with 2 or more Activities of Daily Living (ADL)
(Bathing, Dressing, Eating, Transferring,
Toileting & Continence)
 Or that you require substantial supervision as
a result of a severe cognitive impairment
Many states offer Partnership programs. These
programs usually work on a dollar for dollar basis. If
you purchase a long-term care insurance policy, that
qualifies for Partnership status, with a benefit pool of
$108,000, and you were to exhaust your benefits.
Your state would allow an asset disregard of $108,000
(dollar for dollar) should you apply for Medicaid. This
would enable you to save some of your assets as they
are not counted towards the Medicaid thresholds. In
order to qualify for Partnership status you do have to
purchase an inflation rider based on age requirements.
Age 60 or younger – Compound Inflation
Age 61- 75 – some form of inflation protection
Age 76 and older – no inflation protection is required
A tax deduction is available to those tax-payers that itemize. A
medical expense deduction is allowable to extent that such
expenses (including payment of eligible LTCI premium) exceeds
10% of Adjusted Gross Income. Please review code to
determine income eligibility and phase in period.
Attained Age in Tax Year
Age 40 or Less
Age 41-50
Age 51-60
Age 61-70
Age 71 and older
Limitation on Premium
$370
$700
$1,400
$3,720
$4,660
This is not meant as tax advice. We recommend you seek
guidance from your tax advisor or counsel.