With the rising costs of elder care in the U.S., you might be considering how you'll assist your parents as they age. Fortunately, families have the option of buying long-term care insurance for their aging parents to help cover the increasing expenses stemming from various types of care and facilities, including nursing homes. This coverage can pay for expenses not covered by health insurance and Medicare.
An independent insurance agent can help you buy a long-term care policy for your parents. They'll help you get set up with all the elder care insurance necessary to cover the costs of long-term care. But first, here's a guide to buying long-term care insurance for your parents.
Key Takeaways - Can I Buy Long-Term Care Insurance for My Parents?
- You can buy long-term care insurance for your parents and pay the premiums for them.
- Buying long-term care insurance can come with tax benefits depending on your age and annual income.
- Having long-term care insurance for your parents can help cover the increasing costs of various treatments and facilities, such as nursing homes.
- Working with an independent insurance agent is strongly recommended, as they can help you compare your long-term care insurance options and find the right policy for your parents.
Table of Contents
Q. Can I Legally Buy Long-Term Care Insurance for My Parents?
Q. How Does Long-Term Care Insurance Work?
Q. What Are Some Factors to Consider Before Buying Long-Term Care Coverage for Your Parents?
Q. What Are the Tax Benefits of Long-Term Care Insurance?
Q. What Are the Alternatives to Long-Term Care Insurance?
Q. How Do I Buy the Right Long-Term Care Insurance Policy for My Parents?
Q. How Can an Independent Insurance Agent Help?
Can I Legally Buy Long-Term Care Insurance for My Parents?
Yes, you can purchase long-term care (LTC) insurance for your parents. Your parents would be the named insured on the policy, and you would be the policyholder. You can have the bills sent to you or have them withdrawn from any checking or savings account you add to the policy. Your parents must also sign the policy's application.
The benefits would go to the named insured, your parents in this case, when and if they needed to use the long-term care insurance benefits. You can easily get a long-term care insurance policy for your parents by working with a local independent insurance agent.
How Does Long-Term Care Insurance Work?
Long-term care insurance can cover the cost of nursing homes, assisted living facilities, and in-home care services for aging, chronically ill people. This coverage is typically bought when adults are in their 50s or 60s, with the preferred age being in your 50s to help reduce premium rates, which increase as you get older. LTC insurance can cover the cost of facilities and treatments that aren't paid for by health insurance or Medicare.
LTC insurance benefits can be triggered in multiple ways. A licensed healthcare professional can determine that a person is no longer able to complete at least two of the six activities required for daily living for at least 90 days. These activities include bathing, dressing, continence, eating, toileting, and transferring. Cognitive impairment is another potential trigger for coverage.
It's important to be aware that your policy's benefits might not start immediately after being triggered. An independent insurance agent can help you review your specific policy to determine exactly when you can start expecting reimbursement.
What Are Some Factors to Consider Before Buying Long-Term Care Coverage for Your Parents?
You'll want to consider your parents' age and health status before buying LTC coverage for them. A person's age and health status can affect their eligibility for long-term care insurance. It's better to buy a policy while someone is younger and healthier to increase their chances of approval and also to lock in lower premium rates.
There are also a few policy options to consider for your parents, including whether you want to get traditional long-term care insurance or a hybrid life insurance and LTC policy. Many life insurance policies come with the option to add LTC coverage riders to help pay for these services and facilities.
It's also possible your parents will only need short-term care, and thus LTC insurance wouldn't be necessary. Long-term care insurance is designed to cover healthcare services and facilities that are needed for a period of typically 12 months or longer. If this won't apply to your parents, the coverage offered by health insurance or Medicare may be sufficient. An independent insurance agent can help you compare long-term care policies and find the best long-term care insurance for older adults.
What Are the Tax Benefits of Long-Term Care Insurance?
The policyholder, or the one who pays the premiums for long-term care insurance, can benefit from tax deductions. However, these premiums must exceed 7.5% of your adjusted gross income to be tax-deductible, with slightly different rules for self-employed individuals. Further, there are limits to how much you can deduct on your taxes based on your age.
Long-term care insurance tax deduction limits 2026
| Age | LTC Insurance Tax Deduction Limit |
|---|---|
| 40 and under | $480 |
| 41-50 | $900 |
| 51-60 | $1,800 |
| 61-70 | $4,810 |
| 71 and over | $6,020 |
What Are the Alternatives to Long-Term Care Insurance?
There are a few alternatives to buying long-term care insurance for your aging parents. For example, many life insurance policies offer optional long-term care coverage riders, which can be added to your plan to help cover LTC expenses. Other alternatives to long-term care insurance include annuities and health savings accounts.
You can also choose to self-fund your parents' long-term care using savings or investments. Medicare and Medicaid may also cover the cost of some of your parents' short-term care. Health insurance can cover short-term treatments as well. An independent insurance agent can help you evaluate all your long-term care planning options for your parents.
How Do I Buy the Right Long-Term Care Insurance Policy for My Parents?
Buying the right long-term care insurance policy for your parents starts with comparing your coverage and benefit options from multiple insurers. An independent insurance agent can assist you with this process by shopping and comparing long-term care insurance policies and quotes from several of the best long-term care insurance companies. Your agent will help you find the best long-term care insurance policy for your parents.
How Can an Independent Insurance Agent Help?
Independent insurance agents have access to multiple long-term care insurance companies, so they're free to shop and compare policy options and quotes for you to find the best deal. They'll make sure you walk away with a policy that includes all the coverage you need for your parents from a reputable carrier. And down the road, your agent can help you file LTC insurance claims and update your coverage when necessary.
Sources
https://www.cbsnews.com/news/what-are-the-triggers-for-long-term-care-insurance-benefits/#:~:text=The%20bottom%20line,and%20elimination%20period%20options%20now.
https://smartasset.com/taxes/is-long-term-care-insurance-tax-deductible
