DISABILITY INCOME INSURANCE
A sudden interruption of income – due to an extended period of sickness or injury – can have serious financial consequences for many of today's employees. If you are lucky, you may receive group long term disability benefits through your employer. However, you will need to make sure the benefits available through your group long term disability coverage are adequate for your needs. Group long term disability benefits are taxable if your employer pays the premiums, may be capped at a relatively low amount, and may not cover variable income such as bonuses or commissions. As such, these benefits may not be enough to maintain your lifestyle or pay all your bills if you become too sick or injured to work.
An individual disability income insurance policy can help supplement your group long term disability benefits and protect a larger portion of your income. This, in turn, provides a fundamental layer of security for your financial future. An individual disability income insurance policy you purchase on your own is fully portable, meaning you won't have to worry about losing coverage if you change jobs, and the benefits paid are tax free if you are the premium payer.1
Disability income insurance policies have exclusions and limitations.
1 The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. We are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
LONG TERM CARE INSURANCE
Now is the time to plan for long term care – for you and your loved ones.
The need for long term care may happen to anyone… at any time. It could be you, your spouse or partner, a parent, or even a sibling. The need for long term care may result from being chronically ill, from a severe cognitive impairment or something as unexpected as an accident or injury.
What is long term care? Long term care is a variety of services and supports to help meet personal care needs over an extended period of time. Long term care may involve non-skilled personal care assistance, such as help performing everyday Activities of Daily Living (ADLs), which are: bathing, dressing, using the toilet, transferring (to or from bed or chair), caring for incontinence and eating. Long term care services may help you maximize your independence and functioning at a time when you are unable to be fully independent. If you need assistance in taking care of yourself, who do you want to help you? What if you need to take care of a family member? In either case, individual long term care insurance can help reduce the emotional and financial burden placed on you and your loved ones. And, it could mean more quality time with your family.
Why consider long term care insurance? Long term care insurance may help relieve the emotional and financial strains that often accompany the need for care. It may give you peace of mind knowing that a policy provides you more choices and control over your care and that you have a plan in place to help protect your income and preserve your estate from the high costs associated with long term care services. In addition, premiums paid by an individual for a tax qualified policy are treated as an itemized medical expense for tax purposes, subject to certain limits. Benefits received are generally not considered part of taxable income.
What does long term care cost? Long term care services can be very expensive. The national average cost for a home health aide is $20 an hour and a year in a private nursing home room is $91,250.1
Where is long term care provided? Long term care may take place at home or in assisted living facilities. It may also be provided in a community setting, in a nursing home or through hospice services.
1 Cost of Care Survey, Genworth, 2015.