A recent study by Millman looked at the dollars paid out by traditional Long Term Care (LTC) insurance policies during 2018.  They found that these policies paid out over $11,000,000,000 to home health care services, assisted living facilities, and nursing homes.

These are claims that were paid under “traditional” LTC policies.  This is only one category of LTC policies, so the total amount paid to individuals and families is actually higher.

Families who were facing decisions on how to best care for a loved one had increased flexibility and extra cash flow to help pay for LTC expenses because they had previously purchased an LTC policy.  And in virtually all cases, this extra cash flow coming from the LTC policy was tax-free.  If, on the other hand, stocks, bonds, or real estate had to be liquidated to pay for LTC expenses, taxes would likely have to be paid on appreciation of the assets being sold.  If IRA or 401k withdrawals are made to cover LTC costs, the entire withdrawal amount could add to normal income in the year of the withdrawal, significantly increasing taxes.

It pays to investigate various LTC policies while still healthy.  Once you need LTC services, it’s too late for an insurance carrier to issue a policy.  You and your family will have to shoulder the burden of all LTC costs.

As independent LTC specialists, Cyan offers all types of LTC plans, and can offer the right fit for your needs.