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CAP COM Financial Services, LLC

Financial News

Dispelling the Myths of Long Term Care Insurance:

Two major stories in the media within six months of each other dispel the fallacy that only seniors need to be concerned with Long Term Care insurance. They are the passing of Christopher Reeve and Terri Schiavo. Both lost the ability to perform the activities of daily living at young ages. Reeve was 42 years old when he broke the first and second vertebrae in his neck, becoming a quadriplegic until his death at age 51. At age 26, Schiavo suffered a heart attack that deprived her of oxygen and resulted in severe brain damage.

People of all ages, sexes and nationalities suffer from these events. In fact, 40 percent of all Long Term Care services are provided to people under age 65. For some Long Term Care insurance companies, cancer is one of the leading causes of claims, and cancer is certainly unrelated to age.

Traditional health insurance and Medicare will pay for hospital stays and acute care. Those of us unfortunate enough to require Long Term Care have three basic options: Pay the bills out of pocket, qualify for Medicaid by spending down or giving away our assets, or purchase Long Term Care insurance.

Long Term Care insurance will cover an insured individual who cannot perform two of six activities of daily living: feeding, bathing, dressing, transferring, continence and using the toilet. Policies also cover cognitive impairment when supervision is required. Long Term Care insurance is similar to life insurance whereby the younger and healthier you are, the lower the premium. A minor change in an individual's health may increase their premium, while a major change could cause them to be ineligible for coverage.

Speaking of premiums, the following tips, depending on the person applying for Long Term Care insurance, may help make the premium more affordable. *

  1. New York State taxpayers are allowed a 20 percent credit for the premium paid for qualifying Long Term Care insurance policies. Taxpayers are permitted to carry over any credit to future tax years that is in excess of their tax liability for the year.

  2. Payments for a tax-qualified Long Term Care insurance policy purchased by an individual for themselves and their spouse are deductible medical expenses (subject to the 7.5 percent threshold on adjusted gross income, and maximum limits) for taxpayers who itemize.

  3. Business owners can purchase Long Term Care insurance through their business. (Spouses are eligible.) Depending on the type of business, the premium may be fully or partially deductible. Employers can also choose to cover a select group of employees.

Members of the Capital Communications Federal Credit Union who apply for their Long Term Care insurance through CAP COM Financial Services are eligible for a premium discount. Call 518.782.0209 and ask a Financial Advisor to help design an affordable Long Term Care plan for you today.

Watch for information in upcoming newsletters about a Long Term Care Planning Workshop Series this fall. We'll explain your options for protecting your life savings while staying in control of your financial resources.

S. Larry Feldman, CLU, President of CFK LIFE Plans Inc. in Latham, NY contributed to this article.

* While tax matters outlined here are believed to be accurate, they should in no way be construed as legal or tax advice. Members are encouraged to seek their own legal and/or tax counsel.

 
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Introducing Planwise, our new client newsletter

Planwise will keep you updated on the latest market trends and analysis. This colorful, easy-to-read newsletter will be available on our Financial News page four times per year (January, May, September and November). We hope you enjoy Planwise. Please feel free to provide your feedback to capcom@lpl.com.

Read Planwise Newsletter

 
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Interest Rate Update

Week of 11/03/2008
1. TAX-FREE MUNICIPAL BONDS ** 5.35%
2. FEDERALLY INSURED CDs
5 year issuers name available upon request.
$10,000 minimum deposit. May be subject to Penalty if sold prior to maturity. Annual percentage yield may reflect a current market discount. 		RATE 5.10%
APY 5.10%
3. INVESTMENT GRADE CORPORATE BONDS 6.91%
4. U.S. GOVERNMENT GUARANTEED BONDS 4.20%
5. INSURED TAX-FREE UNIT TRUSTS *** Price: 953.02
Current Yield 4.89%
6. COLLATERIZED MORTGAGE OBLIGATIONS **** RATE 5.53%
Coupon Rate: 5.50%
Price: 99.875
Avg. Life: 13.98 years
Final Mat. Date: 05/20/2038
Tranche: 99.875 BY GNR
Class: RL
Underlying Collateral: GNMA
7. GNMAs (GINNIE MAES)***** RATE: 5.04%
Price: 102.75
Coupon Rate: 5.50%
Avg. Life: 7.76 years

+ Rate expressed as a yield to maturity.
** May be subject to alternative minimum tax.
*** Contact me to obtain a prospectus containing more information. Please read the prospectus carefully before investing. Estimated long-term reflects the amortization of premium or accretion of discount, if any, on the bonds in the trusts portfolio.
**** The anticipated yield and average life shown consider prepayment assumptions that may or may not be met. Changes in prepayments may significantly affect yield and average life. Please contact me for information on CMO's and how they react to different market conditions. The security offered is subject to prior sale and price change.
***** Government National Mortgage Association. Estimated anticipated yield using GNMA standard bond yield tables and corporate bond equivalency. Based on pool's past performance which, while subject to market fluctuations and not guaranteed, offers the above potential.
© 1997-2005 Linsco/Private Ledger, Corp. All rights reserved.
 
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Market Reports

* These newsletters are Adobe Acrobat PDF files. If you do not have Adobe Acrobat Reader, you can visit the Adobe Acrobat Reader site for your free download.

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