Indiana Long-Term Care Insurance

Sales, regulation, and asset protection

Indiana's program page for insurance companies identifies companies currently offering Indiana Partnership policies and cautions that a person may own a Partnership policy from a company that is no longer selling new policies (Indiana ILTCP insurance-company information). Confirm the carrier's current sales status directly; an older insurer list is not a quote or a recommendation.

The Indiana Department of Insurance regulates insurance producers and has specific long-term-care agent training requirements, while Indiana Partnership program materials explain the Medicaid-facing Partnership features (Indiana Department of Insurance LTC agent requirements; Indiana ILTCP). A consumer should verify whether a proposed policy is Partnership-qualified rather than infer it from the carrier name.

Planning limits of a policy

A Partnership policy can be an important funding tool, but it is not a replacement for reviewing cash flow, elimination periods, benefit triggers, inflation protection, home-care benefits, insurer financial strength, and Medicaid application timing. It also does not eliminate the need to understand Indiana's income cap, transfer rules, or estate recovery.

Request the carrier's current outline of coverage, Partnership certification, rate history, and written explanation of the asset-disregard feature. Before relying on a policy for Medicaid planning, compare its actual benefits with the likely care setting and get individualized insurance and legal advice.

Rates and underwriting can change, and a policy may be unavailable to a person with current health conditions. Do not cancel existing coverage or transfer assets based solely on a sales illustration. Compare written benefits and exclusions with the actual care plan before deciding (Indiana ILTCP FAQs).

Federal Tax Incentives for LTC Insurance Premiums (2026)

Beyond any state-level benefit, a tax-qualified LTC insurance contract (one meeting IRC § 7702B) carries several federal tax benefits, and a number of the relevant limits increased for 2026:

• Age-based premium deduction: eligible premiums count as a medical expense on Schedule A (to the extent total unreimbursed medical expenses exceed 7.5% of AGI), up to 2026 limits of $500 (age 40 or younger), $930 (41–50), $1,860 (51–60), $4,960 (61–70), and $6,200 (over 70) — all increased from 2025 (IRS Revenue Procedure 2025-32, § 4.27).
• Self-employed and business deductions: self-employed individuals can deduct 100% of eligible premiums up to the same age-based limits without itemizing, and C-corporations can generally deduct LTC premiums paid for employees as an ordinary business expense under IRC § 162, uncapped by the individual age-based limits.
• Tax-free benefits: benefits from a tax-qualified contract are generally excluded from income under IRC § 7702B(d); per-diem/indemnity contracts are tax-free up to $430/day (about $13,079/month) for 2026 (IRS Revenue Procedure 2025-32, § 4.62).
• HSA-funded premiums: HSA funds can be withdrawn tax-free to pay eligible LTC premiums, up to the same age-based limits above.
• New for 2026 — penalty-free retirement withdrawals: SECURE 2.0 Act § 334 lets eligible 401(k), 403(b), and governmental 457(b) participants under 59½ withdraw funds to pay premiums on a certified LTC contract without the usual 10% early-withdrawal penalty, up to the least of the actual premium paid, 10% of the vested account balance, or a statutory cap of $2,600 for 2026. The distribution itself is still fully taxable as ordinary income and is not available from IRAs (IRS Notice 2026-33).

State tax rules change frequently and the credit/deduction summary above is not exhaustive — confirm current eligibility, forms, and amounts with your state department of revenue or a tax professional before relying on any figure here.