Some people still think buying a long term care insurance (LTCI) policy is pointless as they believe that no one is ever sure that he will require long term care (LTC). If this is also your stand then you are not just exposing your nest egg to the high cost of care but also missing out on long term care tax deduction.

Everybody should start paying attention to the whole spectrum of LTC costs and stop thinking that in case the need for care arrives, it will be so easy to sell his house to pay for in-home care services. Fist of all, the housing market is not totally back in shape yet and secondly, LTC costs have not stagnated. As a matter of fact, you can expect these to go higher in the years to come.

The current cost of care is high as it is, but the nation has yet to see it quadruple sometime 2030 according to financial planners. If the total annual cost of in-home care goes up to $174,000 are you still going to be okay with the idea of self-insuring? Don’t wait to be buried in debt before realizing the importance of having an LTCI policy because it will be too late by then.

There is no better time to purchase your policy than today. With an LTCI policy in hand you will be able to receive care in your preferred LTC setting without having to worry about the expenses that you could possibly incur. In case you would wind up with out-of-pocket expenses, the amount will be minuscule compared to what you would otherwise pay.

Long Term Care Tax Deduction

Aside from preserving your nest egg and protecting your family’s future, a tax-qualified LTCI policy will allow you to cut down a big amount of your annual income tax.

Under the IRS Code Section 213(d), premiums paid into tax-qualified LTCI policies are treated as medical expenses and thus these are tax deductible. Simply put, a certain amount of the total premium that you pay into your policy can be deducted from your itemized deductions. Your age before the end of the taxable year will determine how much of your LTCI premium shall be deducted from your taxes.

Based on the federal tax deductibility table, the corresponding deductible limit of an insured individual who is 40 years old or younger is $350; those who are over 40 but younger than 50 have a maximum deductible of $660; those over 50 but not exceeding 60 have $1,310; $3,500 for individuals past 60 but younger than 70; and $4,370 for anyone over than 70 years old.

Perhaps you’ll admit that paying taxes for practically everything in this world is not fun but you have no choice otherwise there will be no new infrastructures. Surprisingly, the government knows exactly how you and other taxpayers feel that is why it came up with a tax incentive for individuals who plan their future health care needs responsibly.

So now, it’s actually your decision. Would you like to enjoy annual long term care tax deduction while you are still young and healthy? If so, contact an LTCI specialist in your area to ask how you can get hold of a tax-qualified policy.

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