Insurance designed to reimburse long-term care expenses. Tax-qualified policies have two benefit triggers:

1. Loss of 2 out of 6 activities of daily living, or
   
   
2. Severe cognitive impairment. Conditions must be expected to last at least 90 days. Policies are usually purchased with premiums payable for life (or until benefits are triggered).

• Affordable to most investors. Early purchase decisions can lead to significant cost savings.
  
  
• Premiums are designed (but not guaranteed) to remain level for life.
  
  
• May be funded by retained investment income.
  (Example: mutual fund dividends)
  
  
• Popular employer option for new employee benefit.
  
  
• Wide range of plan design options.

• No benefit payments if LTC is never required.
  
  
• Lifetime premium payment responsibility unless a limited pay option is offered.
  
  
• Insurance company may raise rates on all policy holders.
  
  
• Recent industry experience has shown some major insurers exiting the LTC business.

• Companies with high claims paying rating (A.M. Best “A” or above).
  
  
• Companies with long (10+ year) LTC history and a public commitment to remain in the business.
  
  
• Tax-qualified policies that pay income tax-free LTC benefits.
  
  
• Flexible plan design options.
  
  
• Companies that are price competitive in your client's age group.

• Non tax-qualified policies that may produce taxable LTC benefits.
  
  
• Premium quotes that are substantially below those offered by major LTC insurers.
  
  
• “Home care only” policies that provide no coverage if the insured is forced to reside in a nursing home.
  
  
• Companies with a history of repeated rate increases for policyholders.