Long Term Care Costs and Tax Consequences

When an insured is certified by a licensed health care practitioner as a "chronically ill individual" long term care policies will pay a defined amount of an insured's long term care costs Certification as chronically ill requires the following:

(1) substantial supervision to protect oneself from threats to safety and health due to severe cognitive impairment and/or

(2) the inability to perform at least two or more activities of daily living (ADLs). These activities of daily living are as follows: transferring, eating, dressing, toileting, bathing and continence. The policy will continue to pay benefits for a preset time period when a long term insurance policy's benefits are triggered due to the policyholder's eligibility. This will continue till the insured no longer needs long long term care.

A long term care policy is designed to help cover long term care costs caused by a nursing home stay, in-home care, custodial care, assisted living residency, informal care, care provided in Alzheimer's facility or hospice care. There are insurance companies will even pay benefits for care provided by family.

Long term care insurance sometimes even pay for home and community-based care services, such as physical, speech, and occupational therapists; home health aides and visiting nurses, hospice care or adult day care. (Skilled care generally refers to 24 hour treatment by registered nurses under doctor's supervision. Intermediate care is occasional nursing and rehabilitative therapy and care under the supervision of medical personnel. Custodial care deals with activities of daily living such as help in dressing or eating.)

Summery of Long Term Care Costs