Long-Term Care Insurance in Your Future — Whether You Want it or Not!

Long-term-Care continues to be a relevant subject matter for people who are about to retire. Recently, the state of Washington enacted legislation where the citizens of the state now have an additional 2% payroll tax without any limits. So, if you make $100,000 a year, you would have $2,000 taken out of your salary. This payroll tax goes to fund a long-term care benefit of $35,000 that will be provided by the state and would be available to pay for your long-term care claims.

The states are doing this because of the tremendous financial pressures they’re under when people apply for Medicaid. Medicaid is partially funded by the federal and state governments. That’s partly why Medicaid qualification varies from state to state. So, the state of Washington gave the citizens a period of time to opt out of the payroll tax by proving that they had long-term care insurance. Policies that are traditional long-term care or policies that are what we call hybrids or riders on life insurance policies were satisfactory and qualified as exceptions to having this payroll tax deducted.

So, why am I bringing this up, since most of you are not residents of the state of Washington? Well, other states throughout the country, including the state of New York, are considering similar legislation. What I do hear from people is that requirements for you to opt out of the state tax program are going to be more challenging, meaning you’d have to have a richer, long-term care benefit.

With that being said, I think it’s another good reason to review your life and long-term care insurance. If we can create for you a policy that covers you adequately for long-term care, not only will you be doing a smart thing, but you could potentially avoid a lifelong payroll tax similar to the one that is done in the state of Washington. To learn more about the Washington Care Fund, see this article WA State Long Term Care Insurance Tax Exemptions & Information.

To learn more, please give us a call at (631) 806-3568. Thank you. 

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