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Fast forward to your golden years. What do they look like? Bingo at 10? Flower arranging at 4? Hopefully so. But if your health threw a wrench in those plans, you might find yourself organizing pill bottles and waiting for assistance to get from the bed to the bathroom. Not a fun thought. If a health issue pops up while you’re still working, it’s really not fun to think about, right?While long-term disability insurance replaces your salary, long-term care insurance directly impacts your quality of life and covers the astronomical costs for care should you become terminally ill, cognitively impaired or unable to complete 2–3 basic living tasks (getting dressed, feeding yourself, etc.) each day.Most policies are private and fall into 2 categories:

  1. Tax qualified: Benefits and payouts from a tax-qualified plan are non-taxable; typically requires the inability to complete 2 or more activities for daily living.
  2. Non tax-qualified: Benefits and payouts are subject to taxes; typically requires inability to complete only one activity for daily living with patient’s own doctor allowed to order.

The general rule of thumb is to buy long-term care insurance when you’re in your early 50’s. There are also some income guidelines you’ll want to factor in. But if you have a family history of chronic conditions, you might consider purchasing it sooner.Medicaid doesn’t cover home healthcare costs, and Medicare-funded nursing care requires that you can’t have any assets or income to your name for 3 years prior in order for them to pick up the tab. With the current average for one year in a private nursing home at approx. $55,000, it’s definitely worth considering.It protects retirement assets, inheritance and doesn’t burden anyone with the very stressful role of being your caregiver. Because you should know that while I love all my clients, I make pretty lousy eggs-over-easy.