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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75832  
Subject: Re: Big Problems wth LongTermCare Insurance Date: 7/12/2013 12:53 PM
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Hi D-Mom,

What I really want is a policy that is cheaper in premiums but provides catastrophic care. That is - I'll pay the cost of LTC for 3 years - I want insurance to cover the cost beyond that. But, that is just the opposite of what policies provide. Instead the premiums are high because what is being covered is the first few years of care.

What you have just described is actually Medicaid coverage (or very close to it. 5 years rather than 3.)

Medicaid has a 5 year look-back for financial qualification, so 5 years after your spendable assets are transferred out of your name you are then covered by Medicaid.

Medicaid will pay for about 16 hours of daily in-home care... so if your asset gift beneficiaries (*trustees of the funds you gifted out of your name) will use those funds to pay for the other 8 daily hours, you can spend your last phase in the comfort of your own home on your Medicaid benefits... rather than with nurse Ratchet at the puke & crap nursing home.

If you want to restrict your personally-paid LTC outlay to just 3 years (rather than the full 5,) there are a variety of ways to accomplish that. The simplest 2 ways are with traditional LTC coverage, or asset-based Critical Care coverage.

With traditional LTC, you can buy only benefit caps sufficient for 1st 2 years (leaving the final 3 of the 5 lookback period to your own pocket.)

With asset-based LTC, you can pay the 1st 3 years out of pocket, and take the benefits only the final 2 years. Since asset-based Critical Care is basically a single-premium whole life contract, you can surrender it when Medicaid kicks in and get your full cash value refunded, minus the outlays for the 2 year's expenses booked, and your tax liability on the interest credits on your cash value.

Helpful?
Dave
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