Long-term-care insurance: what the 90% of older clients who don’t have this coverage need to know
Accountants would never advise clients to go without car insurance. Yet rarely do CPAs recommend their clients purchase long-term-care insurance when, in fact, the probability of needing LTC insurance is much greater than the likelihood of being in a car accident.
The American Council of Life Insurers says less than 10% of the nation’s elderly own an LTC policy. Benefits are tax-free and there’s no imputed income to employees whose companies provide this insurance as a benefit. It’s a good deal for many clients–even better than buying car insurance. Here’s what CPAs need to know to advise clients on their LTC insurance needs.
COMMON MISCONCEPTIONS
Many clients have a number of misconceptions about LTC insurance that makes them resist buying this important coverage:
Existing insurance will pay for LTC. Wrong. Health insurance pays only for restorative care, not chronic care such as that required for a long-term illness. Medicare pays only for the first 100 days in an LTC facility. Medicaid does cover long-term-care needs. However, it’s intended to cover those people with incomes at or near the poverty level–not most CPAs’ typical clients.