Long Term Care State Partnership Program – What Is It And What Isn't It? By Gurhan Gary Demirkan At Isnare.com Ezine Articles

State Partnership Program is one of the main benefits of having a Long Term Care Insurance that provides safety-net for your assets. Basically, it allows you to protect equal amount of your assets to your policy's pay out in benefits.

Let's explain this in an example:

•You have a Long Term Care Insurance policy with $300.00 daily benefits.

•Your policy is designed to provide you long term care for 3 years.

•This will provide $300.00 (daily benefits) x 3 (years) x 365 (days in a year) = $328,500.00 total pay out in benefits.

•In turn, State Partnership Program will protect equal amount of your assets that is worth $328,500.00.

In other words, if you exhaust your Long Term Care Insurance benefits, as you will have to start paying for your care out of your own pocket, $328,500.00 worth of your assets will be protected even though you may have to require State Medicaid assistance program. However, this does not mean that your income is protected under this program. If your assets are producing income to you (i.e. income from your investments, rent, etc) – it only protects the equal amount of your assets, not the income that comes from your assets.

Nevertheless, besides providing protection to your assets, it also makes the Long Term Care Insurance a lot more affordable as you don't have to purchase a policy with lifetime benefits, which happens to be more expensive.

We also need to look at this matter from your State's perspective to see the win/win situation: When you purchase a Long Term Care Insurance Policy with qualified State Partnership Program, it actually reduces the liability for your particular state. In a way, state shifts some of the liability on you to take care of yourself with your own purchased insurance policy, as it reduces your chances of needing assistance under Medicaid program.

Furthermore, one of the main requirements for your policy to be qualified under State Partnership Program is that your Long Term Care Insurance Policy has to bear an inflation protection component under the following rules (most states have similar rules, yet you should still check your state regulations to be sure):

•If you are 60 years old or younger, you must have a compounded inflation protection.

•If you are in the ages of 61 to 76, you must have some level of protection.

•If you are 76 years old or older, you are not required to purchase any type of inflation protection option (yet you have to be offered)

This is to make sure that the benefits you signed up for will keep up with the inflation as to increasing cost of health care. Other wise, the benefits will be reduced due to inflation, as the insufficient benefits will more likely to force you in to Medicaid quickly in the future.

Regardless of any rules and regulations, State Partnership Program provides a good win/win situation by offering protection to your assets. You should make sure that this protection is fully used towards your benefits by consulting an insurance professional.

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