Long Term Care Insurance Policies Can Have Tax Benefits

02/08/2010

Consumers are widely advised to invest in long-term care insurance because of the rapidly rising cost of nursing homes and other needs that may await them in their retirement years.

However, one insurance company that specializes in long-term care policies recently advised people that if they have such coverage, it can be a valuable tax deduction. With that in mind, people who don't have coverage are advised to consider getting a policy so they can enjoy the tax benefits next year while ensuring long-term protection in the event of a catastrophic illness or injury.

The company pointed out that the tax benefits of such policies are largest for people who are age 70 and above - $3,980 for individuals and $8,000 for couples.

For those who are under the age of 40, tax deductions can be as small as $320 in any given filing season, although this doesn't minimize the importance of investing in a long-term care insurance policy.

Such deductions are treated as medical expenses under the tax code. A wide variety of medical expenses that may not be covered under health insurance can actually be deducted, which is why it's important for people to keep track of all relevant receipts and to consult with a tax professional.

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