LTC Archives - Page 6 of 7

Are Long-Term Care Benefits Taxable? Benefits, Per Diem Limits, and Deductible Expenses

September 25, 2026April 1, 2021 by Tim Fuller

Adult daughter and her aging mother sharing a warm moment while discussing long-term care planning

Clients sit up when you talk taxes. Long-term care insurance has tax advantages at three points: when premiums are paid, when benefits are received, and when clients pay for care out of pocket.

Key takeaways

Benefits from tax-qualified LTC policies are generally income-tax-free, up to actual care costs or the IRS per diem limit, whichever is greater.
Premiums may be deductible up to age-based IRS eligible premium limits, with larger deductions available to some business owners.
Out-of-pocket long-term care expenses can generally be deducted as medical expenses, except payments to unlicensed family members.

Tax-qualified LTC benefits are generally tax-free up to the greater of actual care costs or the IRS daily limit.

Benefits are generally tax-free

Benefits from a tax-qualified long-term care policy are generally excluded from income as long as they don’t exceed the greater of the actual qualified care expenses or the IRS per diem limit, which is adjusted each year. For indemnity and cash policies, the per diem limit matters most.

Premiums may be deductible

Individuals: tax-qualified premiums count as medical expenses up to age-based “eligible premium” limits.
Self-employed owners: can generally deduct eligible premiums for themselves, spouses, and dependents, and actual premiums paid for employees.
C-corporations: can generally deduct actual premiums for owner-employees, spouses, dependents, and employees.

Details in four ways LTC insurance provides tax advantages and LTC for small business owners.

Out-of-pocket care can be deductible

Qualified long-term care expenses paid out of pocket can generally be claimed as medical expenses. The main exception is care provided by a relative who isn’t a licensed health care professional.

State incentives

Many states offer additional deductions or credits for tax-qualified LTC premiums, on top of federal benefits. Rules vary, so clients should confirm with a tax advisor.

Frequently asked questions

Are long-term care insurance benefits taxable?

Benefits from tax-qualified policies are generally tax-free up to the greater of actual care costs or the IRS per diem limit.

Can I deduct long-term care expenses I pay myself?

Qualified out-of-pocket LTC expenses are generally deductible as medical expenses, except payments to unlicensed family caregivers.

What is the IRS per diem limit for long-term care?

An annually adjusted daily amount up to which indemnity LTC benefits are tax-free regardless of actual expenses.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.

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Needs Analysis Before Choosing a Long-Term Care Product: Traditional, Hybrid, or Rider

September 25, 2026March 25, 2021 by Tim Fuller

Many advisors lead with asset protection. But clients buy long-term care coverage for different reasons, and the right product depends on which reason matters most to them. Uncover that first.

Key takeaways

Common motivations: not burdening family, choosing where to receive care, keeping control, and staying at home.
Ask one or two questions to isolate the client’s most important reason.
Match the motivation to the product: traditional, hybrid, or rider-based coverage.

“If you ever need care, what matters most to you about it?” The answer tells you what to recommend.

Think: why do people buy?

To avoid burdening loved ones with caregiving
To choose where they receive care
To keep control of care decisions
To stay in their own home
To protect assets for a spouse or heirs

Ask: find the primary reason

“What’s the main reason you’re considering long-term care coverage?”
“If you ever need care, what’s most important to you about it?”
“What’s your biggest concern about getting older and needing help?”

Present: match the product to the need

Maximum care benefit per dollar: traditional LTC insurance.
Doesn’t want premiums “wasted” or wants guaranteed premiums: hybrid life or annuity LTC. See asset-based LTC with guaranteed premiums.
Needs life insurance anyway, or can’t qualify for LTC: LTC or chronic illness rider. See chronic illness vs. LTC riders.
Wants flexibility to pay family caregivers: a cash or indemnity benefit.

Many carriers also offer care coordination and family support services worth highlighting.

Frequently asked questions

How do I choose between traditional and hybrid long-term care?

Consider whether the client wants the most care benefit per dollar (traditional) or wants a death benefit and guaranteed premiums (hybrid).

Why do people buy long-term care insurance?

Most want to avoid burdening family, choose where they get care, stay independent, and protect their assets.

What should be discussed before showing an LTC illustration?

The client’s main reason for considering coverage, so the product and design match what they value.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Talking to Adult Children About Their Parents’ Long-Term Care

September 25, 2026March 18, 2021 by Tim Fuller

Adult children often see a parent’s care needs coming before the parent does. They’re also the ones who will carry the burden if there’s no plan. That makes them one of the most motivated audiences for long-term care conversations.

Key takeaways

In one carrier survey, 85% of consumers agreed it’s irresponsible not to plan for long-term care, yet most hadn’t acted.
Adult children often become the caregivers, and pay the price in time, money, and career, when parents don’t plan.
Advisors can help adult children open the conversation and explore options, including insuring parents while they can still qualify.

85% agree it’s irresponsible not to plan for long-term care. Most still haven’t. Adult children are often the ones who get the conversation started.

Why adult children should care

When parents have no plan, their children usually become the plan, providing care themselves or paying for it. Costs are significant: in 2025, national medians were about $74,400 a year for assisted living and about $129,600 for a private nursing home room. See current care costs.

The planning gap

In a survey by one of our carrier partners, 85% of consumers agreed it’s irresponsible not to plan, 75% said other concerns kept it from being a priority, and 60% agreed long-term care insurance is the best way to handle the cost. Most people won’t act without someone prompting them.

How advisors can help

Coach adult children on how to raise it with parents; see eight ways to ease into the talk.
Quantify the risk to the parents’ assets and the family.
Present options that insure some or all of the risk, including coverage adult children can help fund.
Review the adult child’s own plan at the same time.

Frequently asked questions

Can I buy long-term care insurance for my parents?

Adult children can help pay premiums on a policy their parent owns, if the parent qualifies. Hybrid policies are also options for older parents.

How do I talk to my parents about long-term care?

Start indirectly, such as discussing a friend’s situation or asking for their advice, and focus on their wishes rather than money.

Who pays for a parent’s long-term care without insurance?

The parent’s savings first, then often family members, and eventually Medicaid after assets are spent down.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Aging in Place: How Long-Term Care Coverage Helps Clients Stay Home

September 25, 2026March 11, 2021 by Tim Fuller

Close to 70% of people turning 65 will need some form of long-term care, and most want to receive it at home. Aging in place takes more than a caregiver: it takes a safe home, the right equipment, and help with daily life. Long-term care coverage can pay for much of it.

Key takeaways

Aging in place is the top preference for most older adults.
Many policies cover home modifications, safety checks, medical equipment, and medical alert systems.
Help with household tasks, medications, and caregiver training keeps clients home longer.

Ramps, grab bars, a medical alert system, and someone to help with meals: the things that make staying home possible.

What aging in place requires

Staying home safely often means changes to the home and support with daily tasks, not just medical care. Families frequently underestimate how much is involved.

Benefits found in many policies

Home modifications, such as ramps, grab bars, and bathroom changes
Home safety assessments
Durable medical equipment
Medical alert systems
Caregiver training for family members
Household help: laundry, meal preparation, and bill paying
Medication management

Some home care agencies also provide transportation to appointments, social activities, and updates to family after doctor visits. Coverage varies by policy.

Why it matters in the sale

Emphasizing these benefits speaks to clients’ desire for independence and quality of life. See in-home care benefits and planning for couples without children, for whom aging-in-place support is especially important.

Frequently asked questions

What is aging in place?

Living in your own home safely and independently as you age, often with modifications and in-home support.

Does long-term care insurance pay for home modifications?

Many policies include a benefit for modifications such as ramps and grab bars.

Can LTC insurance pay for a medical alert system?

Some policies cover medical alert systems as part of home care or safety benefits.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Help Clients Hedge Long-Term Care Risk: Start With the Cost of Care

September 25, 2026March 4, 2021 by Tim Fuller

Talking about the cost of care is one of the least threatening ways to start a long-term care discussion. It turns an uncomfortable topic into a numbers conversation, and it gives you the starting point for designing coverage.

Key takeaways

Start by asking where the client would want to receive care, then show today’s and future costs for that setting.
Coverage doesn’t have to insure the entire risk; clients can self-fund part of it.
Shorter benefit periods or a higher starting benefit without compound inflation can cut premiums significantly.

Long-term care coverage isn’t all-or-nothing. Clients can insure the part of the risk they can’t afford to carry themselves.

Highlight the cost of care

Ask where the client would want to receive care: at home, in assisted living, or in a facility. Then show what one to three years or more of that care costs today and what it could cost when they’re likely to need it. We can provide current costs by location and inflation-adjusted projections. National figures are in our 2025 cost of care summary.

Develop a strategy

Once clients see the impact on their assets, help them decide how much risk to insure. Some prefer to cover part of future costs and self-fund the rest. Others want full protection for a spouse or to preserve a legacy. Both are valid plans.

Manage the premium

Start with a design that covers the full projected cost, then show alternatives.
Shorten the benefit period to three to five years, which covers most care needs.
Consider a higher initial daily benefit with less inflation protection; dropping compound inflation can cut the premium substantially.

More options in five ways to make LTC more affordable.

Become the cost-of-care resource

Advisors who know local care costs become a go-to resource in their community. Use us as your reference point for data and illustrations.

Frequently asked questions

How much long-term care coverage does a client need?

Enough to cover the portion of expected care costs they can’t comfortably pay from income and savings. Many choose to insure part of the risk.

How long does a typical long-term care need last?

It varies widely. Many needs last a few years, which is why three- to five-year benefit periods are common.

Does leaving off inflation protection lower LTC premiums?

Yes, often substantially. A higher starting benefit can partly offset future cost increases.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Selling Long-Term Care With Storytelling: Why Stories Beat Statistics

September 25, 2026February 25, 2021 by Tim Fuller

You already know statistics don’t sell long-term care insurance. Most people don’t see themselves in the numbers, and listing product features doesn’t help if they don’t believe they’ll need care. Stories do what data can’t.

Key takeaways

Clients connect with stories about real people, not probabilities or product features.
Good stories are relevant to the client, focus on feelings, and end well because of the coverage.
In one survey of LTC policyholders, 78% had a family member or friend who needed long-term care, so most clients have a story of their own.

78% of long-term care policyholders in one survey had a family member or friend who needed care. Your client probably has a story too.

Find a good story

You likely already have one. If you’ve cared for a parent or grandparent, you know how hard it is. Stories can also come from family, friends, or clients (with their permission and details changed). See one example in how an LTC policy helped Joe stay at home.

Make it memorable

Paint a picture. Don’t just describe events; describe how people felt.
Keep it relevant. A client with no children won’t connect with a story about the burden on adult kids.
End well. Don’t scare people. The story should have a better outcome because coverage was in place.

Invite the client’s story

Your story often prompts clients to recall their own. Five questions to draw it out:

Do you know someone who needed long-term care?
Who provided their care?
What effect did that have on the caregiver and the family?
How did they pay for it?
What did it do to their finances, retirement plans, or the inheritance they hoped to leave?

Frequently asked questions

Why don’t statistics sell long-term care insurance?

Most people believe the risk applies to someone else. Personal stories make the need real in a way numbers don’t.

What makes a good long-term care sales story?

It’s relevant to the client, focuses on emotions and real outcomes, and ends positively because coverage was in place.

How do I get clients to share their own care experiences?

Ask whether they know someone who needed care, who provided it, and how it affected the family’s finances.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

Connect on LinkedIn →

How the Long-Term Care Insurance Claims Process Works: A Guide for Advisors

September 25, 2026February 18, 2021 by Tim Fuller

Most long-term care policies you sell today won’t have a claim for years. But when a client or their family calls because care is needed, knowing exactly how the claims process works lets you guide them through one of the hardest moments they’ll face.

Key takeaways

Benefits are usually triggered when a licensed health practitioner certifies the insured needs help with two of six activities of daily living for at least 90 days, or has a severe cognitive impairment.
Notify the carrier promptly, usually within 30 days of the need for care or as soon as reasonably possible.
After eligibility is confirmed and the elimination period is met, benefits are paid to the insured or the provider.

Many families wait until the family caregiver is exhausted to file. Encourage them to call as soon as care is needed.

When families usually file

People don’t like admitting they need help, so families often provide care themselves at first. Claims tend to be filed when the family caregiver burns out or the care needed exceeds what they can provide. Earlier filing can mean benefits start sooner, since the elimination period can begin counting.

Step 1: Confirm benefit eligibility

For tax-qualified policies, a licensed health care practitioner must certify that the insured is chronically ill: unable to perform at least two of six activities of daily living (bathing, dressing, eating, toileting, transferring, continence) for an expected 90 days or more, or needing substantial supervision because of severe cognitive impairment.

Step 2: Notify the insurance company

Notice is usually due within 30 days of the onset of care needs, or as soon as reasonably possible. It can often be given by phone or mail and should include the insured’s name and policy number.

Step 3: Claim form and assessment

The carrier sends a claim form, which is returned with provider bills or other proof of loss. The carrier then verifies eligibility, often through an in-person assessment or by contacting the insured’s health care practitioner.

Step 4: Care planning and payment

Once the claim is approved, a care coordinator or case manager often works with the family on the right type of care. After the elimination period is satisfied, benefits are paid to the insured or directly to the care provider, depending on the policy. See how cash benefits differ from reimbursement.

Frequently asked questions

What triggers long-term care insurance benefits?

Typically, being unable to perform two of six activities of daily living for at least 90 days, or having a severe cognitive impairment, as certified by a licensed health practitioner.

How soon should a long-term care claim be filed?

Usually within 30 days of the need for care, or as soon as reasonably possible. Filing early can help the elimination period start sooner.

What is the elimination period in LTC insurance?

A waiting period, often 30 to 90 days of qualifying care, before the policy begins paying benefits.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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LTC Field Underwriting: 6 Things to Uncover Before You Submit

September 25, 2026February 11, 2021 by Tim Fuller

Long-term care cases move fastest when the underwriter doesn’t have to hunt for information. A little detective work at the application stage can prevent weeks of delays and surprise decisions.

Key takeaways

Ask which specialists the client sees; it reveals conditions they may not mention.
Recent diagnoses, pending tests, and ongoing therapy can all delay or change a decision.
Clients often describe medications by symptom; find the diagnosis behind every prescription.

“A water pill for fluid” could mean mild swelling — or heart failure. Always find the diagnosis behind the medication.

1. Ask about specialists

A specialist tells the underwriter a lot. After bypass surgery, is there a cardiologist? After joint replacement, an orthopedist? With rheumatoid arthritis, a rheumatologist? Multiple medications for depression or anxiety, a psychiatrist? Diabetes, an endocrinologist?

2. Note the date of diagnosis

A diagnosis within the last six months to a year may not give the underwriter enough time to judge stability.

3. Note the last doctor visit

If it’s been more than two years since a physical and lab work, preferred rates are unlikely. Also ask about upcoming follow-ups; knowing about ongoing treatment lets the underwriter order records right away.

4. Listen for pending tests, surgeries, and therapy

Pending tests: anything scheduled but not yet done.
Recent surgeries: what type, was anything malignant, has it healed, and is follow-up still needed?
Physical therapy: for what, is it resolved, did it help, and has surgery been recommended?

5. Find the diagnosis behind each medication

“Water pill”: could be mild swelling or heart failure; note the dosage.
“Blood thinner”: ask about stroke, TIA, heart surgery, clots, or leg surgery.
Bone medication: ask about recent bone density tests and results.
“Arthritis” medication: rule out rheumatoid arthritis.
Narcotic pain medication: why, how often, and for how long.

6. Question anything unusual

A younger applicant who isn’t working may have a health condition or be receiving disability benefits. The underwriter will need to know, so ask first.

Frequently asked questions

What information speeds up long-term care underwriting?

Specialists seen, diagnosis dates, last doctor visits, pending tests, recent surgeries, therapy, and the diagnosis behind each medication.

Why do medications matter so much in LTC underwriting?

They often reveal conditions the client didn’t mention, and some medications are associated with uninsurable conditions.

Does a recent diagnosis delay LTC approval?

Often. A diagnosis within six to twelve months may need more time to show stability.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Permanent vs. Term Life Insurance: When Permanent Coverage Makes Sense

September 26, 2026February 8, 2021 by Tim Fuller

Term life insurance is the right answer for many clients, but not all of them. Some needs last a lifetime, and some clients want benefits beyond a death benefit. Here is how to tell when permanent coverage belongs in the plan.

Key takeaways

Term fits temporary needs like income replacement and debt; permanent fits needs that last for life.
Permanent policies can offer tax-advantaged cash value growth, no required minimum distributions and no income phase-outs.
Many permanent policies offer living benefits such as long-term care or chronic illness riders.

If the need will still exist when the client is 85, term insurance is unlikely to be there to meet it.

Start with the length of the need

The simplest test is time. If the need ends, such as a mortgage, raising children, or replacing income until retirement, term is often the most economical choice. If the need lasts for life, such as estate liquidity, a special-needs dependent, charitable goals or final expenses, permanent coverage is designed to be there when it is needed.

When permanent life insurance makes sense

Estate liquidity. Clients whose estates may exceed the federal $15 million exemption, or who live in states with their own estate taxes, need coverage that lasts. See our post on estate tax liquidity.
Business planning. Buy-sell and succession arrangements often need coverage for as long as the owner lives.
Tax-advantaged accumulation. High earners who have maxed out qualified plans may value cash value growth with no income phase-outs.
Legacy and equalization. Leaving a guaranteed amount to heirs or charity.

Features clients may not know about

Income-tax-free death benefit to beneficiaries
Cash value that grows tax-deferred and can be accessed through withdrawals and loans
No required minimum distributions and no penalty for access before 59½ (outside of MEC rules)
Indexed designs that offer upside potential with downside protection
Riders that accelerate benefits for long-term care or chronic illness
Wellness programs from some carriers that reward healthy habits

Blending term and permanent

It does not have to be one or the other. Many clients are best served by a blend: permanent coverage for lifelong needs and term for the larger temporary need. Convertible term can also preserve the option to move to permanent coverage later without new underwriting.

Frequently asked questions

When is term life insurance the better choice?

When the need is temporary, such as replacing income until retirement, paying off a mortgage or covering years of child-raising, term usually provides the most coverage per premium dollar.

What are the main advantages of permanent life insurance?

Lifetime coverage, tax-deferred cash value that can be accessed, no RMDs, no income phase-outs, and optional living benefit riders.

Can a client have both term and permanent coverage?

Yes. A blend often works well: permanent for lifelong needs and term for large temporary needs. Convertible term keeps the option to switch later.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-26

Tim Fuller

President, SRS Inc.

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Couples Discounts and Asymmetrical Designs: Making LTC Coverage Affordable

September 25, 2026February 4, 2021 by Tim Fuller

Many clients assume long-term care coverage is unaffordable. In reality, a policy is only as expensive as its design, and a few strategies, especially for couples, can make a big difference.

Key takeaways

Some carriers offer couples discounts of 20–30%, and at least one up to 40%, when both spouses apply and are approved.
An asymmetrical design gives one spouse a richer benefit and the other a smaller one, while keeping the couples discount.
Buying between ages 45 and 60 means lower premiums and a better chance of preferred health discounts.

A couples discount of 20–40% can make coverage for two cost far less than two separate policies.

Couples discounts

Many carriers discount premiums when spouses or partners apply together and both are approved: typically 20–30%, and up to 40% at one carrier, compared with little or no discount for a married person applying alone.

Asymmetrical case design

When a couple can’t afford two rich policies, or one spouse wants coverage more than the other, give one spouse a fuller benefit and the other a smaller “token” benefit. Both usually still qualify for the couples discount, and the total premium drops significantly. Joint policies are another option; see joint life LTC for couples.

Use age and health

The ideal planning window is roughly 45 to 60. Younger applicants pay less and are more likely to qualify for preferred health discounts. See the cost of waiting.

Some protection beats none

Coverage doesn’t have to be all-or-nothing. A pool of benefits, even a modest one, hedges the risk. More levers in five ways to make LTC more affordable.

Frequently asked questions

Do couples get a discount on long-term care insurance?

Often, yes. Discounts of 20–30% are common, and some carriers offer up to 40% when both are approved.

What is an asymmetrical LTC design?

Giving each spouse different benefit levels, often a richer benefit for one and a smaller one for the other, to control cost.

What is the best age to buy long-term care insurance?

Roughly 45 to 60, when premiums are lower and qualifying is easier.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Are Long-Term Care Benefits Taxable? Benefits, Per Diem Limits, and Deductible Expenses

Benefits are generally tax-free

Premiums may be deductible

Out-of-pocket care can be deductible

State incentives

Frequently asked questions

Tim Fuller

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Think: why do people buy?

Ask: find the primary reason

Present: match the product to the need

Frequently asked questions

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