2 Key Benefits of a Long-Term Care Policy on Finances after 50

By Eric Tyson, Bob Carlson

Copyright © 2016 Eric Tyson and Bob Carlson. All rights reserved.

You may want to consider a long-term care policy when planning your finances after 50. Most states participate in a program known as the Long-Term Care Partnership Program. The purpose of the program is to encourage people to purchase private long-term care insurance that meets requirements established by the state.

If you live in one of these states and purchase a qualified long-term care policy and keep it in force, the Long-Term Care Partnership Program offers you two key benefits:

  • The program increases the amount of exempt assets you can own and still be eligible for Medicaid.

  • Your beneficiary’s estate may be exempt from the estate recovery process.

Suppose you live in a state that participates in the Long-Term Care Partnership Program and you purchase a long-term care insurance policy providing maximum lifetime benefits of $100,000. You enter a nursing home and after a couple of years use up the insurance benefits and apply for Medicaid. The state will allow you to keep up to $100,000 of assets in addition to other assets allowed under Medicaid. In addition, all or part of your estate may be exempt from the recovery process.