Aaron Skloff, MBA

 Many of the long-term care insurance policies I am researching require me to make permanent choices about the policy benefits. Are there any types of policies that allow me to change my policy benefits in the future?

 Most long-term care insurance policies require permanent decisions about policy benefits upon purchase. This presents a host of potential problems, including insufficient coverage for the future if you choose coverage that is too modest, and the inability to change policy benefits and features if your health deteriorates. 

Some policies allow you to make changes after the policy has been purchased-a tremendous benefit if you are interested in obtaining a policy today but are working within a budget. For example, some insurance companies offer flexible policies that allow you to increase your coverage without additional underwriting. That can be advantageous if your health deteriorates, because the insurance company is legally obligated to increase your coverage upon your request.  

Aaron Skloff  AIF, CFA, MBA, is chief executive officer of Skloff Financial Group, a Registered Investment Advisory firm based in Berkeley Heights, New Jersey. He can be reached at 

Articles

Are there any types of policies that allow me to change my policy benefits in the future?

Making changes to long-term care policies

 Some of the long-term care insurance policies I am researching allow for an indemnity benefit. Can you explain what that means and what advantages it may provide?

 Most long-term care insurance policies are designed as reimbursement only, meaning that upon submitting all of your receipts for long-term care expenses, the policy will reimburse you up to your policy's limits. Unfortunately, you may have ancillary expenses associated with your long-term care, such as adding ramps or expanding doorways. You may also want complete control over how you want to spend your long-term care benefit, regardless of your actual expenses. That flexibility is not permitted with a reimbursement-only policy.  

With a full-indemnity policy, you're paid a monthly benefit regardless of your actual expenses once you need long-term care. With a partial-indemnity policy, you receive a daily benefit once you receive at least one hour of long-term care per day.  

Aaron Skloff AIF, CFA, MBA, is chief executive officer of Skloff Financial Group, a Registered Investment Advisory firm based in Berkeley Heights, New Jersey. He can be reached at 

Some of the long-term care insurance policies I am researching allow for an indemnity benefit. Can you explain what that means and what advantages it may provide?

What's an indemnity benefit?

 My investment portfolio has declined significantly in the last 18 months. Are there any tax benefits owed to me?

 When you sell investments at a gain, you generally pay taxes on the capital gains. Conversely, when you sell at a loss, you can force the IRS to give you a tax break. Short-term gains, or investments you've held for one year or less, can only be offset with short-term losses. Long-term gains, or investments held for more than one year, can only be offset with long-term losses. Under federal tax laws, you can force the IRS to provide you with up to a $3,000 annual deduction from your income if you've suffered investment losses.  

Be aware that the IRS discourages you from locking in your losses and buying back the same or substantially identical investment through its "wash-sale" rule, which holds that selling and buying within 61 days voids your loss. One of the best ways to avoid the wash-sale rule is to replace your investment with something similar, rather than the "same or substantially identical" investment.  

My investment portfolio has declined significantly in the last 18 months. Are there any tax benefits owed to me?

Author | Aaron Skloff, MBA

Articles

Making changes to long-term care policies

What's an indemnity benefit?

Avoiding the wash-sale rule