subject: Long Term Care Insurance Tax Advantages [print this page] Long Term Care Insurance is one of the most valued insurance plans in the market in today's society. Certain types of long term care insurance policies also have some very nice tax advantages. With more and more people trying to purchase Long Term Care Insurance to protect themselves in the late part of their lives, the demand for this type of insurance has gone sky rocketing high. Long Term Care is usually referred to as Nursing Home Care or extreme Rehabilitation Care after an accident or in case of an illness.
Some of the most common reasons for Long Term Care Include aging, car accidents, diseases, illnesses and dementia symptoms. Nowadays with the cost of the health industry rising, the need for Long Term Care Insurance is very important because an accident can happen to anyone, in any place, at any time.
It is estimated that a single year in a retirement community can cost as much as $50,000 and cost for more luxurious nursing homes can reach up to $100,000 a year!! Rehabilitation centers are much more expensive because they need doctors available at all times and specialists that can treat certain patients with specific needs. Home care can also qualify for a type of Long Term Care since the patient will need some sort of person watching over him/her at all times and they would be spending money; not to mention they might need equipment to take home depending on the severity of the case.
Tax Qualified is one of the two types of Long Term Care Insurance and in fact it is the one that is most used today. This might be due to the fact that Non-Tax Qualified insurance gave money away too easily without asking for anything in return from the policyholder. It was more than likely because of that reason that insurance agencies started putting requirements in order to receive the Long Term Care Insurance reimbursement. Like all the other coverage in any other type of insurance, this system has some advantages and some disadvantages.
Some of the advantages that the Tax Qualified (or TQ plan) are that for tax purposes these kind of insurance is treated like accident insurance or health insurance. This means that Tax Qualified Long Term Care Insurance premiums are concerned to be a medical expense; hence the premiums are based on the policyholder's age and inflation. The younger the owner of the policy, the less he will be able to deduct from his taxes. Another good thing to note is that no benefits you receive from the Long Term Care Insurance can be taxed.
