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Do NOT Fall for the "Use It or Lose It" LTC Scam!

12/22/2020

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I don't know about you, but if you're a 50-something like me you may be getting bombarded with social media "sponsored" posts about LTC insurance and how the "NEW KIND" of policy is so much better than the "tired, old, broken-down LTC insurance" because if you never need care, you won't "waste" your premiums.

It's NOT true!  Don't fall for a clever and misleading marketing pitch to get you to over-pay for benefits you don't need!

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Before you buy any LTC insurance,
CLICK HERE TO read out UPDATED report:
​"The Use It or Lose It Fallacy"!
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IRS Releases 2021 LTC Insurance Tax Guidance

10/26/2020

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The IRS just released its annual inflation adjustments for tax year 2021.  (Revenue Procedure 2020-45)

​This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans.
FOR CLAIMS IN 2021 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit increases to $400 per day ($12,167/month).
(This is a $20/day increase from 2020 which was $380/day.)
​
  • LTC insurance benefits received on an indemnity (per diem) basis are tax-free to the GREATER OF $400/day (2021) OR your actual expenses paid for care if greater.
    • For example, a LTCI cash benefit payment of $9,000 per month ($300/day) is tax free no matter what was spent on care, even if less, since $300/day is less than the IRS per diem limit.
    • If the per diem benefit received is $430 per day, then $30 per day (2021) would have to be claimed as taxable income.
    • If the per diem benefit received is $430 per day, but you have $430 or more per day in paid caregiving charges, then it would all be tax-free.​
FOR PREMIUMS PAID IN 2021 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2021) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits:
Age at end of 2021
Maximum Deductible Premium
40 or younger
$450
41 to 50
$850
51 to 60
$1,690
61 to 70
$4,520
71 or older
$5,640
NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 10% of your Adjusted Gross Income (AGI), and only the amount above the 10% threshold is deductible.

HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums up to the age-based, Eligible Premium amount shown above for yourself and a spouse.

BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16).  This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations.  (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)


CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2020 LTC TAX GUIDELIENS COMPARED TO 2021.

​* The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice.  Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits.
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Beware of "Chronic Illness" Riders

8/5/2020

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"Chronic Illness" riders on life insurance are NOT the same as real LTC insurance.  There is an explosion of these "living benefit" riders being added to life insurance policies with NO standardization as to what "Chronic Illness" means or how the benefits get paid.

Some of these "Chronic Illness" riders may look a lot like real LTC insurance - an agent may even tell you, "It's just the same as LTC insurance."  But it is not.

If you're goal is planning for extended, long-term care needs and an agent only shows you one of these riders you must find another agent!  

CLICK HERE to read an outstanding article on some of the problems with "Chronic Illness" riders by my colleague, Kerry Peabody.

"If you need a plan to pay for LTC, you’re better off with a policy specifically designed to do that. When you’re actually planning to meet your LTC needs, a Chronic Illness rider isn’t a plan, it’s an afterthought."
- Kerry Peabody
https://www.linkedin.com/pulse/why-chronic-illness-riders-chronically-fall-short-peabody-clu-cltc/
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Free Consumer Guide to LTC Insurance

6/30/2020

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Request a copy of our updated 2020 Consumer Guide to LTC Insurance

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ComfortLTC.com Expands Hybrid LTC Info

5/11/2020

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The Hybrid LTC Information Center

ComfortLTC.com has added a new resource for consumers and financial advisors regarding "hybrid" or "linked-benefit" LTC insurance.  Articles include:
  • What is Linked-Benefit or Hybrid LTC?
  • When Hybrid LTC Makes Sense
  • Keep Your Cash - The Hybrid LTC Cash "Liquidity" Fallacy
  • "I don't get it" - Hybrid vs. Traditional LTC Insurance Analysis (A series of case studies)
As a truly independent brokerage agency specializing in extended care planning and LTC insurance, Comfort LTC fairly represents ALL types of LTC insurance - Traditional LTC and all the many different Hybrid LTC variations.

Do not ever buy LTC insurance from an agent or advisor who only sells one type of coverage (or represents only one or two companies) - they cannot represent your best interests.  CLICK HERE for our guide to finding a truly independent LTC specialist.
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Luxury CCRCs Expanding - At a Cost

4/30/2020

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Check out this article about a FL CCRC with a $1.5-million+ entrance fee!
Then read our exclusive report on creating your own "Private CCRC Plan".

​"Pandemic not dampening desire for luxury retirement living"

https://www.mcknightsseniorliving.com/home/news/pandemic-not-dampening-desire-for-luxury-retirement-living/
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A Comfort LTC Exclusive:

How & why to create a "Private CCRC Plan"

https://www.comfortltc.com/privateccrc.html
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Comfort LTC Launches Hybrid LTCI Info Center

4/17/2020

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Hybrid (or "linked-benefit", "combo" or "asset-based") LTC insurance options are exploding in the marketplace, and they are NOT all created equal.
Are "hybrid" LTC policies with a death benefit really a better deal?
You'll be surprised at what our analysis shows, and why you need to make sure you know ALL your options before you buy LTC insurance.
Consumers and financial advisors need an independent source of information - free from marketing hype and over-simplified sales pitches - to understand the options and how to properly, fairly compare the real costs and benefits.
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The new Comfort LTC Hybrid LTCI Information Center will provide clear explanations of the many different types of plans along with detailed case study analysis to provide real-world examples and comparisons. 

CLICK HERE
to visit the new
Hybrid Long Term Care
Insurance Information
​Center.

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When Long Term Care Insurance Analysis Fails

3/2/2020

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​A recent on-line column at Advisors Perspective attempts to provide an objective framework for conducting a long term care insurance analysis in a financial planning practice.  It fails on several levels.
 
The article, “Evaluating Long-Term Care Insurance”, published February 24, 2020, and written by Allan Roth is hardly a comprehensive view of the subject, and it needs to be viewed with limited applicability.

I find it to be only partially researched, inconsistently analyzed, and overly opinionated.

Too many financial advisors inappropriately seek to value insurance products using an investment analysis model.  While there are certainly cash-flow and cost of money considerations, as noted above insurance is purchased with an expectation of “losing” a little in exchange for potentially protecting a lot.  And there are “soft”, subjective considerations that are also routinely ignored, but that often create the biggest value in having coverage when the risk event occurs.

CLICK HERE TO READ THE COMPLETE ANALYSIS
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The LTC Insurance Value Proposition

1/9/2020

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CLICK HERE for more information!
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IRS Releases 2020 LTC Insurance Tax Guidance

11/7/2019

1 Comment

 
The IRS has just released its annual inflation adjustments for tax year 2020. This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the minimum tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans.
FOR CLAIMS IN 2020 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit increases to $380 per day ($11,558/month).
(This is a $10/day increase from 2019 which was $370/day.)
​
  • LTC insurance benefits received on an indemnity (per diem) basis are tax-free to the GREATER OF $380/day (2020) OR your actual expenses paid for care if greater.
    • For example, a LTCI cash benefit payment of $9,000 per month ($300/day) is tax free no matter what was spent on care, even if less, since $300/day is less than the IRS per diem limit.
    • If the per diem benefit received is $400 per day, then $20 per day (2020) would have to be claimed as taxable income.
    • If the per diem benefit received is $400 per day, but you have $400 or more per day in paid caregiving charges, then it would all be tax-free.
  • ​NOTE that while "reimbursement"-type LTC policies are generally paid tax-free no matter what the benefit amount is, if multiple policies pay for the same charge, then the per diem limit could also apply.  Always check with your tax advisor for personal guidance.*
FOR PREMIUMS PAID IN 2020 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2020) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits:
Age at end of 2020
Maximum Deductible Premium
40 or less
$  430
41 to 50
$  810
51 to 60
$ 1,630
61 to 70
$ 4,350
71 and older
$ 5,430
NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 10% of your Adjusted Gross Income (AGI), and only the amount above the 10% threshold is deductible.

HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums up to the age-based, Eligible Premium amount shown above.

BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on page one of Form 1040 as part of the "Self Employed Health Insurance Deduction" (Line 29).  This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations.  (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)

CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI.

Read more from the IRS website by clicking here:
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020

​* The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice.  Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits.
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Comfort Long Term Care is an independent insurance brokerage agency specializing exclusively in LTC insurance.  Agency owner, Bill Comfort, is celebrating 30-years of experience in 2021!  We are based in the Raleigh, Durham, Chapel Hill, North Carolina Triangle region, but we serve clients throughout NC and across the country.  We also have an office in St. Louis, Missouri.  Click here to learn more about us!
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  • TakeCare!
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  • LTC Rate Increases
  • News
  • About
    • Bill Comfort
    • TakeCare! Specialists
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    • Rinny
  • Contact