Why Would I Want a Partnership Long-Term Care Insurance Policy?

Sept. 1, 2011 - PRLog -- The advantage of purchasing a partnership Long-Term Care Insurance ("LTCI") policy is that if the insured exhausts all of his or her available coverage, he or she can apply for Medicaid benefits and exclude countable resources equal to the amount paid for care by the LTCI coverage.  For example, assume that Alice Smith has a partnership LTCI policy which pays out $350,000 in benefits.  The partnership LTCI policy is totally used up.  If Alice is in a nursing home when the event occurs, she could apply for Medicaid benefits and exclude $352,000 worth of countable resources ($350,000 as a result of the benefits paid by the partnership LTCI policy, and $2,000 as the individual state countable resource limit).  Thus, if Alice only has a CD valued at $352,000, she would be immediately eligible for Medicaid benefits.  Her monthly co-pay to the nursing home (share of costs) would equal her monthly social security income, pension income - if any, and the monthly income associated to the CD.  In many states, the CD income would not be counted until the beginning of year two - recertification.

Collateral Issue One: If Alice is not in a nursing home when the event occurs, and resides in an assisted living facility, depending on whether the state Medicaid program pays for assisted living will dictate whether she can get any financial assistance from Medicaid.  If not, she would have to move into a nursing home facility to obtain the Medicaid benefits.

Collateral Issue Two: If Alice has a substantial net worth - $1.5 million, she may find it very difficult to utilize a partnership LTCI policy to protect all of her assets.  Instead, she may have to use a MIT™ for some, and a partnership LTCI policy for the balance.

Interesting partnership LTCI Facts:

   Partnership LTCI is comparable in price to non-partnership LTCI.  The policy features are also very comparable.
   Most LTCI policies sold today are partnership policies.
   The underwriting for partnership LTCI and non-partnership LTCI is the same.  The potential insured has to be in good health, of average height and weight, with no medical conditions or surgeries in the recent past, and between the ages of 50-80.  The majority of LTCI policies issued are in the 50-70 age range.
   Any LTCI policy can be owned by a trust - MIT™, FIT™, KIT™.
   If a person cannot qualify for LTCI policy, he or she may be able to obtain an annuity or life insurance policy with a long-term care benefit or rider - less medical underwriting.

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Krause Financial Services specializes in helping families qualify for Medicaid benefits through the use of Medicaid Compliant Annuities, and Veterans Aid & Attendance benefits through the use of various life and annuity insurance products.