Is long-term care (LTC) insurance in NJ a smart investment? That’s the million dollar question! On one hand, long-term care insurance protects your retirement assets and picks up healthcare costs not covered by health insurance. On the other hand, an LTC policy is expensive and has a relatively strict qualification process.
Purchasing long-term care insurance is a personal decision, but you are more likely than not to need it. Below our financial planners in New Jersey share the pros and cons to having an LTC insurance policy.
What is Long-Term Care Insurance?
Long-term care insurance covers long-term support services such as assisted living, adult daycare, respite care, hospice care, memory care, etc. These insurance policies reimburse you for long-term care costs, up to a predetermined limit. This way, you can get the quality services you need when you need them.
Long-term care insurance is a great option for many people. But with high premiums, strict requirements and some limitations, an LTC policy may not make sense for everyone.
Pros of Long-Term Care Insurance
Here are the advantages of taking out an LTC policy:
Cons of Long-Term Care Insurance
Some things to keep in mind about LTC are:
If you are considering long-term care insurance, schedule a consultation with Leonard Financial Solutions. Our financial advisors in NJ can help determine if this insurance is right for you based on your financial health. If we find that LTC is not the best option, we can suggest other solutions for long-term care planning.
In December 2017, lawmakers passed the Tax Cuts and Jobs Act (the “Act”), a sweeping tax reform law that impacts you.
First, let's start with three tax concepts that were left intact:
1. Tax-free death benefit of life insurance. Your beneficiaries can receive life insurance proceeds
free from income tax with very few exceptions.
2. Tax-deferred growth of life insurance cash values. You can grow cash values in your life insurance policy
tax-deferred, making permanent life insurance a great part of your financial portfolio.
3. Access to cash value without current taxation. When properly structured, life insurance policy cash
values may be accessed through loans and/or surrenders to basis without current taxation.