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First of all in your in an LTC facility, your not earning an income, so there is nothing to protect income wise. Its all about assets (home, IRA's etc.)
Secondly there are "Spousal Impoverishment Laws." Spouse won't go broke if one is in nursing home. He/She can protect home, one car, $104,000 of liquid assets and $1,700/month which is about the average Social Security Check for H/W combined.
LTC to protect income... please elaborate I'm all ears.
Most seniors pay for LTCi out of savings
With these statements, you are ignoring that fact that people do buy LTCi to avoid medicaid. They value the freedom of home healthcare. They want to be responsible for themselves as they have been all their adult lives. They do not want to leave this earth as a "ward of the state" and they want to leave their family with more opportunities in life (aka inheritance) not less. To say that anyone under $700,000 of net worth shouldn't look at an LTCi policy because as long as they are married they will qualify for medicaid quickly is short sighted at best. What happens to the asset rich couple when one of them becomes a widow. How fast will she qualify for medicaid then? She'll probably die before she ever qualifies and in the mean time she will have squandered all of her assets on paying for care and her grandson will have to pile on a load of debt to graduate medical school when he could have had it paid for.If you think of LTCi as "asset protection" then your target market is mostly limited to those who have net worth significantly above 700k.
However, if you emphasize LTCi as "income protection" then your target market is anyone who has a spouse who needs more than $2,700 per month to live comfortably.
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Under current Medicaid rules, the community spouse can keep about $104,000 in savings, plus $500K in home equity, plus a car, personal items, etc. In other words, someone's spouse could easily qualify for Medicaid and they could still have a net worth of over $700k. Simply put, current Medicaid rules already protect a significant amount of assets for the community spouse.
However, Medicaid does not protect income (except if the community spouse's income is below the MMMNA.)
If you position LTCi as "asset protection" you are saying the same things that a Medicaid-planning attorney says.
However, Medicaid planning attorneys cannot protect their client's income (beyond the MMMNA limits--which is ridiculously low... about $2,700 per month (not $1,700).
If you think of LTCi as "asset protection" then your target market is mostly limited to those who have net worth significantly above 700k.
However, if you emphasize LTCi as "income protection" then your target market is anyone who has a spouse who needs more than $2,700 per month to live comfortably.
The LTCi industry is doing a disservice to many people by emphasizing the product as "asset protection." It is really "lifestyle protection" (aka "income protection") for the spouse who does not need care.
A married couple with $30,000 in savings and a mortgage, but a monthly income of $6,000 (from pensions and social security) needs LTCi more than a married couple with a $300k house that's paid for and only $3,000 per month in income. The second couple, in this example, could easily qualify for Medicaid, with little or no change in the lifestyle of the community spouse. In order for the first couple to qualify for Medicaid, the community spouse would see her household income drop from $6,000 per month to $2,700 per month.
Since most of a couple's income cannot be protected by Medicaid, LTCi's biggest advantage is that it protects one's income.
Salem,
The goal is to protect the income of the spouse who needs care.
Are you suggesting that Medicaid will ignore certain types of income?
Numbers don't sell LTCI, dad's dirty diapers sell LTCI.
Salem,
If anyone on the forum ever has the opportunity to take the CLTC course, I highly recommend it. It does a great job of explaining Medicaid qualification.