Michael Whitaker & Associates, LLC
Chartered Financial Consultant

Long Term Care

Is Your Family Protected?


Planning for the cost of long term care is becoming increasingly important for Florida residents. As co-author of the book “Long Term Care is your Family Protected?” my associates and I are passionate about educating the public about Long-Term Care (LTC) Planning. When looking at LTC Planning we start by asking two questions.

  1. NEED: Who Needs to Plan for LTC?

  2. OPTIONS: What Options are Available for you and your Family.

Who Needs Long-Term Care Planning?

Long Term Care Planning has changed since the Mustang years 1965 – 1966, the time when Medicare paid up to 100% of the cost for recipients’ extended care. Over the years, Medicare has modified the benefits to pass extended care costs to Medicaid, Private Insurance, and Out-of-Pocket to the customer which drove the need for LTC Planning.

With an average annual cost for a semi-private room in a Florida nursing facility close to $75,000, and at least 70 percent of the people over the age of 65 will requiring Long Term Care service at some point in their lives, the need to plan for the cost of Long Term Care becomes critical.

What Options are Available for You and Your Family?

Long-Term Care Insurance is when a private insurance company insures you for the risk of the cost of an extended care situation, these are costs generally not covered by health insurance, Medicare, or Medicaid.

Benefits – LTC insurance generally covers Nursing Home, Assisted Living, Adult Daycare, Respite Care, Hospice Care, Memory Units and Home Care. Other benefits LTC insurance may provide, can help take the burden off your spouse and children physically and financial.

Florida Long-Term Care Partnership Program took effect on July 29, 2007. This program’s main purpose is to encourage people to plan for the risk of needing long-term care by purchase coverage through private LTC Insurance Companies instead of depending of Medicaid and Medicare. The program offers them an option to exempt some or all their asset dollars from Medicaid spend-down requirements. Partnership policyholders still are required to meet the Medicaid income eligibility before covering the cost of long term care.

Pension Protection Act (PPA) was signed into bill in 2006 but the long-term care insurance provisions took effect on Jan. 1, 2010. The PPA provides the ability to pay Long-Term Care Insurance (LTCI) premiums in a tax-advantaged way by using life and annuity cash values. PPA also looks at combination policies and clarifies that LTCI cost can be paid on a tax-free basis for linked benefit life or annuity contract purchased after Jan. 1, 1997.

Combination Policies Life / Annuity with LTCI

Life Insurance with LTC Rider today you can purchase a Whole, Universal, Variable and even some Term policies with LTC add-ons. One way is with an LTC Rider on the life policy, the rider will pay a certain percentage of the death benefit if the policyholder went into extended care in a nursing-home. Some policies will also pay benefits in home care and assisted living. Another life insurance option requires depositing a single premium down into a whole or universal life policy with a paid-up death benefits and reimbursements for any qualifying expenses. The benefits may be income tax-free up to six years for LTC coverage.

Single-Premium Deferred Annuity (SPDA) with LTC benefits pairs the safety of a tax-deferred growth with LTC benefits. Long-Term Care Annuities allow you to leverage the assets you deposit by creating a larger pool of benefits dollars should the need for extended care arise. Like the combination policy of Life and LTC your benefit dollar for a qualifying LTC expenses are income tax-free.


LTC planning has many different options available for your future needs to cover the cost of long term care. For more information, sign up to attend one of our local seminars or contact us, we are glad to help.