Tax Reminder: A Big Portion of Your Long Term Care Insurance Premiums May Be Deductible

/PRNewswire/ -- Want to keep more of your money in these challenging times? Then check with your tax advisor if you have long term care insurance. You may be able to deduct a big chunk of your 2009 premiums. What if you don't have long term care insurance? Then consider getting it NOW to lock in tax benefits next year. Uncle Sam may in effect pick up the tab for much of your premiums for 2010. This reminder comes from LTC Financial Partners LLC (LTCFP), one of the nation's most experienced long term care insurance agencies.

"For the 2009 tax year, an individual with a qualified policy may be able to deduct up to $3,980, depending on age," says Cameron Truesdell, CEO of LTCFP. "For a couple, the maximum amount doubles, to nearly $8,000." According to the Internal Revenue Service, for individuals the amounts of long term care insurance premiums that are deductible as medical expenses in 2009 can be as high as --

-- $3,980 if you're 70 or over
-- $3,180 if you're over 60 but not over 70
-- $1,190 if you're over 50 but not over 60
-- $600 if you're over 40 but not over 50
-- $320 if you're 40 or under



"Those who don't have policies, but want them, can set themselves up for substantial deductions next year," Truesdell says. For individuals, the amounts deductible as medical expenses in 2010 can be as high as --

-- $4,110 if you're 70 or over
-- $3,290 if you're over 60 but not over 70
-- $1,230 if you're over 50 but not over 60
-- $620 if you're over 40 but not over 50
-- $330 if you're 40 or under



"These deductions are not a one-time thing," Truesdell says. "They recur. You can take them each and every year that you pay premiums; and the deductible limits have been increasing annually."

Truesdell strongly urges individuals and companies to investigate ALL the tax advantages that may be available to them. Additional potential benefits, beyond the above federal deductions, include --

-- If your state offers tax deductions or rebates, and you qualify, these
are additive to your federal deduction, if you qualify.
-- When a policy is designed to pay on a per-diem basis, a limited
portion of the benefits may be excluded from taxable income.
-- When a policy is paid for out of a Health Savings Account (HSA), there
can be tax advantages.
-- For businesses, there are tax breaks that can be especially
attractive. For example, opportunities exist for some business owners
to deduct premiums without having to satisfy the 7.5% medical expense
threshold amount.



"With so much government support, we often wonder why more people don't get LTC policies," says Truesdell.

LTCFP does not offer tax advice but teams up with accountants and other tax experts to help their clients get all the deductions or other benefits available to them. "We've formed strategic alliances with banks, accountants, other financial advisors and tax preparers, and organizations such as the National Association of Estate Planning Attorneys," says Truesdell.

How can you make sure you don't miss out? "Ask your tax expert to check into every deduction that may apply in your case," Truesdell advises. "We're glad to help. We'll consult with anyone's accountant, tax attorney, or other advisor -- now or closer to the tax deadline." In Truesdell's national organization, hundreds of experts are available by phone or Internet. Requests for help, at no charge, may be made at http://www.ltcfp.us/ltcfp/taxbreaks.htm.

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Survey Finds Economic Downturn Has Had a Major Negative Impact on Americans' Ability to Pay for Long-Term Care Services

/PRNewswire/ -- With significant losses to their savings and investments, and economists warning of a prolonged recession, many Americans are feeling uncertain about their retirement security and their ability to pay for long-term care services. According to a new survey by the nonprofit LIFE Foundation, 64 percent of Americans age 45 and older say that the recent economic downturn has had a major negative impact on their ability to pay for long-term care services should they become unable to take care of themselves for an extended period of time. Considering that 70 percent of Americans who reach age 65 will need such care at some point in their lives, according to the U.S. Department of Health and Human Services, these findings show how financially vulnerable many people are without a long-term care plan.

Released to coincide with Long-Term Care Awareness Month in November, the LIFE survey found that most adults recognize the reality of needing long-term care services:

-- Sixty-one percent say they are concerned that they will be responsible
in the future for providing either financial assistance or personal
care to a loved one who needs long-term care services.
-- More than half of all adults (58%) think it is likely they will need
long-term care services at some point in their lives.


While adult Americans recognize the risk, few of them, according to Deb Newman, CLU, ChFC, LTCP, president of Newman Long Term Care and spokesperson for LIFE, own long-term care insurance to guard against this risk.

"On average, the cost for long-term care services is roughly $70,000 a year. In today's tough economic environment, most people have far less money available to pay for these services, and it's likely they will need them," says Newman. "Long-term care insurance guarantees that you will always have the financial means to afford the kind of care you'll need and prefer."

Since shopping for a long-term care insurance policy can be complicated, LIFE recommends people meet with a qualified insurance professional who can walk through their options and help them find a plan that meets their specific needs and budget.

LIFE reviews five things people may not know about long-term care insurance and encourages all Americans to make November, Long-Term Care Awareness Month, the time to assess their needs.

You can Share the Care -- If you're reluctant to purchase a policy for yourself, consider one that would cover you and your spouse if either of you ever needed it. Many long-term care policies offer the option of a shared benefits rider, which enables you and your significant other to draw from one policy up to a specified benefit limit.

State Partnership Programs Can Mean Big Savings -- Many states have created Long-Term Care Insurance Partnership Programs to provide incentives to encourage residents to purchase policies. When you purchase a policy through these programs, your state guarantees that if you use up the policy's benefits, you'll be able to qualify for Medicaid without first having to deplete all of your assets. Since these programs vary from state to state, check with your state insurance department to learn more about the program in your area.

Home Care is an Option -- One of the biggest misconceptions people have is that long-term care insurance will only cover care provided in a nursing home or assisted living facility. The reality is that today, most policies offer the buyer the option to receive care in a range of different settings. In fact, the option to receive care at home is now included in virtually all policies sold today. Recently, Unum, a leading insurer in the group long-term care market, reported that nearly 70 percent of its customers use their long term care benefits for care that occurs in the home. So make sure to choose a policy that will pay for care where you want it delivered.

You May Want Coverage before Saying "I Do" -- With more people getting married or remarrying at older ages, including long-term care insurance in prenuptial agreements or alimony packages is becoming more common. If you and your spouse-to-be both purchase a policy, you can guarantee that each of your assets and lifestyles will be protected should either of you need care in the future.

For Most, It's Not Too Late to Purchase Coverage -- Experts recommend that people should begin thinking about their long-term care insurance options in their 40s, when they're young and healthy and have the best chance of locking in a preferred premium rate for coverage. However, if you are over the age of 60, it's not too late. Today, many insurance companies are selling policies to people who are in good health into their 80s.

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New Picture of Personal Finances Shows, in Case of Emergency, Two in Three ''Household CFOs'' Are at Risk

BUSINESS WIRE --A recent national survey of “Household CFOs” - people who are primarily responsible for the financial management of their household - reveals that a majority are not adequately prepared for short-term financial setbacks or long-term financial needs like retirement. In fact, 68 percent of households do not have emergency savings accounts, putting them at financial risk in the event of a crisis.

The survey was conducted by Consumer Credit Counseling Service (CCCS) of Greater Atlanta, a national credit counseling agency that has been educating consumers on money and debt management, housing, and bankruptcy and foreclosure prevention since 1964.

In response to survey findings(a) and current economic conditions, CCCS is launching a national awareness campaign, “Household CFO,” and enhancing its CredAbilityU online education program to offer free, easy-to-use interactive webinars and financial management tools.

“The time and energy it takes to manage the day-to-day leaves little time for thinking about what lies ahead. People often become overwhelmed and forget to include savings and long-term planning in their budget. But, it’s essential,” said Mechel Glass, director of education for CCCS. “We launched the Household CFO campaign to share what we’ve learned in our 44-year history, encourage proactive financial education and help individuals better prepare for financial stability.”

Survey results showed that Household CFOs recognize the importance of financial planning and are comfortable with daily financial management tasks. However, respondents were more likely to rate their knowledge of more complicated and long-term financial preparations as “Average” or “Below Average.” In fact, one in six respondents do not have any financial goals or long-term plans in place, such as a budget, retirement plan, investment portfolio or any kind of savings, and nearly one in three households has not prepared a will, purchased insurance of any kind or made other preparations for a significant life-changing event.

“A long-range financial plan is particularly critical during times of economic uncertainty like the present,” said Ilyce Glink, nationally-syndicated personal finance and real estate journalist and member of the National Advisory Council for CCCS. “A general guideline is to save 10 percent of net income and have 6 months income available in an emergency fund or savings account. But if saving 10 percent of your net income seems impossible in a time where gas prices are rising, try to set aside five percent and build in an extra one percent each month until you've reached that 10 percent threshold.”

Though many aren’t prepared, nearly half of survey respondents experienced extenuating circumstances within their household in the past 12 months that negatively affected their finances. Almost one in three experienced a medical emergency or a change in health status. One in six reported a job loss, and one in ten went through a divorce.

“With free resources available to Household CFOs, it’s easier than ever to become more knowledgeable about managing finances in their own time and at their own pace,” said Glass. “Through courses like 'How do I save my home?,' 'Why am I a 678 credit score?,' and 'Living on 70 cents a day,' Household CFOs can easily build their confidence while building financial stability for the future.”

Glass recommends the following Web sites as resources for effectively managing household finances:

www.HouseholdCFO.org - Free webinars and financial management tools via CredAbilityU, including mortgage calculators and budget trackers
www.ThinkGlink.com - Useful news, tips, advice and information from Ilyce Glink, financial expert, regarding personal finance, real estate and consumer issues
www.MyFico.com – Credit score reporting and education
www.AnnualCreditReport.com - Free annual credit reports
www.MFEA.com - (Mutual Fund Investor’s Center) Basics on investing in mutual funds

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