The older a person is when a policy is
purchased, the more expensive the
policy will be. However, even if it is
too late for one spouse to purchase
coverage, it may not be too late for the
other spouse to buy a policy.
Annual premiums can range from a few
hundred dollars for a healthy 40-year
old to thousands of dollars for a 70-year
old. Most policies offer premiums that
are "level," that is, the rates do not
change as you age. However, an insur-
ance company typically can raise rates
for a group of policyholders if it can
show the rates are too low.
Long-term care insurance policies are
offered in many different options. It is
very important for you to understand
what a particular policy covers, as well
as the rules affecting when the policy
goes into effect.
What services are covered
Make sure the insurance policy includes
assisted living care. It is a good idea to
buy a policy that covers all types of
long-term care: home care, day care,
assisted living, and nursing home
services. Long-term care insurance
may not necessarily include assisted
living services, although most policies
written in the last few years will. Older
policies may be limited to nursing home
care or at-home care. The “assisted
living” concept was not common until
recently so many older policies do not
mention it or cover it.
Tax Deductions
Long-term care insurance premiums
may be deducted from your federal
income taxes. The deduction is based
on the age of the person insured. The
deduction covers only a small part of
the actual insurance policy cost, ranging
from about $220 for persons age 40 or
less to about $2,700 for persons over
age 70, but it should not be overlooked.
Maryland offers a one-time state in-
come tax credit of up to $500 for your
purchase of long-term care insurance.
A credit is different from a deduction in
that the full amount is taken directly out
of the amount of taxes owed to the
State.
For More Information
For more information about long-term
care insurance, contact the United
Seniors Health Cooperative, 409 3rd
Street SW, Suite 200, Washington, D.C.
20024, telephone (202) 479-6678; the
Maryland Insurance Administration at
(410) 468-2000 or 1-800-492-6116; or
your local Senior Health Insurance
Assistance Program. See Chap-
ter 9 for information on your
local Senior Health Insurance
Assistance Program.
Reverse Mortgages
Reverse mortgages enable you
to convert the equity in your
home to cash. The cash can be
spent to pay for assisted living.
However, in most cases, to
qualify for a reverse mortgage, there
must be one borrower living in the
26 - Assisted Living in Maryland: What You Need to Know