States offer relief for long-term care

Slome says a PQ policy most benefits those who need to protect assets equal to two or three years' worth of care, or roughly $200,000 to $300,000. The good news is, according to an AALTCI survey, only one in 10 (8 percent) of LTC policyholders require more than three years of coverage.

"Most people who buy a partnership policy don't end up on welfare," he says.

PQs must be state certified and contain comprehensive coverage (nursing home and home care) and have an inflation protection component set by the state. Although states that offer partnership programs generally honor the asset disregard you earned from another state's PQ plan, they also reserve the right to opt out of reciprocity at any time.

Partnership policies are available as group and individual plans. Employers typically do not contribute to PQ plans as they do with health insurance, but they may offer a better group rate and may make it easier to qualify. Check with your benefits administrator about availability.

Shop around for the best deal

Although partnership plans may be nearly identical to non-PQ policies, you'll have to purchase individual coverage from an agent who has received additional state-approved training and been certified to sell PQ policies. Check with your state Department of Insurance regarding availability of PQs in your state and a list of certified policies.

With all this partnering going on, you might think that PQ policies would all cost about the same. Not so, says Slome.

"Prices can vary by 40 (percent) to 45 percent from one carrier to the next," he says. "It really is important to shop, because each company has 'sweet spots' in terms of who they are looking to attract. If your insurance agent only represents one carrier, you may have to do the legwork yourself."

According to Slome, a 55-year-old with preferred health purchasing long-term care insurance can expect to pay $1,450 per year for about $169,000 of current benefits that will grow to about $354,000 when he or she turns age 80. A 55-year-old couple with average health purchasing an LTC policy can expect to pay $2,350 per year combined for about $338,000 of current benefits ($169,000 each), which will grow to about $800,000 of combined coverage for the couple when they turn age 80. A 65-year-old couple with average health can expect to pay $4,660 per year combined for about $338,000 of current combined benefits, which will grow to about $527,000 of combined coverage at age 80.

And if the premiums look like they'll bust your budget before they cover your assets, Slome says simply downsize your plan.

"Some coverage is always better than none," he says. "When you add in that asset protection, it's the best of all worlds. You're not leaving your spouse financially destitute."

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