New Laws in 2010 effecting Long Term Care

Posted by on Jul 31, 2010 in Featured Articles. | 0 comments

New Laws in 2010 effecting Long Term Care

Most people these days who are considering their LTCI options are aware of the traditional “stand-alone” long term care policies.  These are the policies that that have premiums that can be steep, and if you buy a policy that you dont wind up using, you could be pouring your money down a hole instead of leaving it for your kids.

A lesser known way to get coverage is to buy a life-insurance policy combined with long term coverage, in which a portion of the policy’s death benefit is paid to out to cover long term care expenses and the death benefit is reduced accordingly.

You can also buy a deferred fixed annuity-in which an initial investment grows throughout your lifetime and is packaged with long term care benefits.

Before this year, a person who bought an annuity or life insurance policy with long term care benefits was taxed on any payouts.  Now, thanks to the Pension Protection Act of 2006, and taking effect in 2010, that money is distributed!

Those who wish to transfer funds from an old annuity or life insurance policy benefit too.  Funds that are transferred from one product to the product that creates long term care coverage is now non-taxable.  Prior to 2010, those funds transferred and used for such products use to be taxable income not a tax free exchange.

For a review or if you have questions, please email scott@marcouxfinancial.com.

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