Category Archives: Long Term Care Insurance

Wealthy Americans See Need in Long-Term Care Insurance

Wealthy Americans See Need in Long-Term Care Insurance

“You can’t take it with you when you go.” By today’s standards, this translates to something more like: it’s probably a good idea to make your money work for you in the here and now. That’s a lesson wealthy Americans seem to be coming to terms with, according to a survey commissioned by PNC Financial Services Group.

PNC asked Harris Interactive to conduct an online survey in October and November 2005 among a nationwide cross section of 1,485 adults age 18 or over with annual employment incomes of $150,000 or more, and at least $500,000 in assets. They also polled retirees with $1 million or more in assets. What the researchers found was that nearly half of the respondents, or 47 percent, reported that providing for their health and wellness is their chief financial concern. Despite their obviously solid financial footing, those surveyed proved that people everywhere are recognizing the fact that medical expenses and long-term care costs are a major threat to financial security for themselves and their families.

The survey also uncovered just how significant a threat these respondents viewed long-term care costs. More than one-third of those polled, or 35%, felt that long-term care costs and expensive medical treatment were a “threat or huge threat.”  Oddly enough, although these wealthy Americans realize the vulnerable position future health care needs place them in, few have made any real attempt at planning for the eventuality. The survey showed that twenty-two percent of those with living parents worry about their parents’ lack of long-term care insurance. In fact, 70% of those responding said that they had not purchased long-term care for themselves or their spouse because they didn’t want to pay premiums for a policy they may never use.

A significant factor that may be contributing to this mind set is the result of a practice used by wealthy parents for some time now that helped their children care for them if they required long-term care. In the past, parents transferred all their assets to their children. This strategy not only protected the assets, but also made the parents eligible for Medicaid. Parents can still do this, but it’s not as simple a transfer as it once was.

Currently, if an individual wants to transfer assets to become eligible for federal assistance, they must do so within three years of becoming eligible. However, a new law that took effect on February 8, 2006 makes it more difficult to qualify by just giving your money away. Individuals will now have to transfer assets within five years of entering a nursing home to qualify for Medicaid. Each state has the option of implementing the new rules according to its own timetable.

The implications of this new law include having to prove that money was given away innocently, meaning that it wasn’t transferred for the sole purpose of making the individual eligible for Medicaid. Although there are Medicaid hardship waivers, claimants will have a hard row to hoe to prove they qualify.

The new law will change the start of the penalty period for an individual who has transferred assets from the date the transfer was made to the date they applied for Medicaid. The law may also penalize family transactions that have occurred over time, especially if the individual hasn’t kept accurate records, by increasing the look back period from three to five years. The outcome of all of this additional tightening, according to the Congressional Budget Office, is that 120,000 people, or approximately 15% of new Medicaid applicants, will be delayed eligibility each year. In light of this new development, it seems that the most prudent course of action is providing for your own needs with a sound long-term care insurance policy. Call us today 800–240–3390 to learn about a policy that is right for you.

Who Is More Prepared Financially to Handle Long-Term Care: Women or Men?

Who Is More Prepared Financially to Handle Long-Term Care: Women or Men?

Many Americans have inaccurate assumptions of how they will pay for long-term care needs. They believe that Medicare, supplemental policies or standard health insurance will cover the expenses. Consequently, they are not adequately (financially) prepared to provide for their future care.

This was evidenced in a survey conducted by market researchers Mathew Greenwald & Associates on behalf of The MetLife Mature Market Institute and AARP Health Care Options. They questioned a demographically balanced sample of 1,000 adults aged 50+ on the source from which they would pay the bulk of their long-term care costs, and more than three in ten named sources that are not feasible. Twenty-one percent of both male and female respondents cited Medicare as their chief means of paying for long-term care. Seven-percent of the men and nine-percent of the women answered health insurance, and three-percent of the men and one-percent of the women answered disability insurance. However, 19% of the male respondents and 13% of the females chose personal investments and assets, and 14% of the men and 16% of the women picked long-term care insurance.

One in five men and women responded that they have a long-term care insurance policy. However, a large proportion of these respondents do not have standalone policies. In actuality, 4% of men and 5% of women said that their policy is part of another health insurance or disability insurance policy, or that their long-term care insurance is a federal program such as Medicaid or Medicare. Only 16% of men and 14% of women said they had a long-term care policy that is separate from other insurance or federal programs.

If forced to rely on only their own savings, investments, and assets, 40% of women believe they don’t have enough money to pay for a single year of nursing home care, which is estimated at around $66,000. Only 31% of men felt that they couldn’t pay for a year’s nursing home care using their personal assets. Sixteen-percent of women and 18% of men reported that they could pay for one or two years of care, but men are almost twice as likely to believe they have enough to pay for at least three years of nursing home care. In fact, 26% of women said that they do not know how many years they could pay, while only 19% of men were unsure about the number of years of care they could pay. The difference between men and women’s ability to pay for nursing home care is not an issue among Boomers, but it emerges as a concern as the age of the respondents increased.

Among those respondents who do not already have long-term care insurance, 42% of men versus 32% of women said that they have considered purchasing coverage at some time. This difference in attitude toward purchasing long-term care insurance is apparent only between married/partnered men and women, and the difference increased as the age of the respondents increased.

Few People Concerned About the Cost of Long-Term Care

Few People Concerned About the Cost of Long-Term Care

A recent study conducted by Greenwald & Associates for John Hancock Life Insurance Company reveals that Americans hold a frightening number of misconceptions about their potential need for long-term care. The survey compared current attitudes about long-term care with results of similar John Hancock surveys conducted in 1996, 1997, and 1998.

Of those polled, 57% said they were concerned about long-term care costs. This was down from 69% of respondents in the 1997 survey. In addition, only 51% (as compared to 59% in 1997) expressed worry about ever needing long-term care. Interestingly enough, the current survey revealed that 64% of those polled believed they would live to age 85 versus 61% in 1998. Also, 85% of the current respondents felt that the cost of long-term care could significantly reduce their retirement income versus 76% in 1998.

However, in spite of their concern about the loss of retirement income, the researchers discovered that 69% of the respondents have done little or no planning for long-term care. This is up from 58% in 1996, and 49% in 1997. In fact, 43% have made no provisions at all, up from 34% in 1996 and 24% in 1997.

When questioned as to how they would pay for long-term care if they didn’t buy insurance coverage, 43% of those responding said they’d pay the entire cost out of pocket. This is up from 40% in 1997. But 46% felt they couldn’t afford even one year of long-term care, given their current assets.

Reactions varied when the subject of depending on the government for long-term care was asked. Most of the respondents lacked confidence in the future of Social Security, Medicare, or Medicaid: 61% are not confident Social Security will be around at their retirement, up from 53% in 1998; 62% percent have no confidence that Medicare will be enough to cover their expenses, compared to 61% in 1998; and 62 percent felt that Medicaid won’t be available at all, up from 55% in 1998. Regardless of their feelings about the solvency of these federal programs, 47% said they’d pay for long-term care costs by transferring assets to family members and becoming eligible for Medicaid.

The most startling fact revealed by the study is that these unrealistic expectations about the need for long-term care and how to pay for it is not confined to any particular age group: the researchers polled 1,000 people ages 21 to 75 to obtain their results.

Do the Sexes Differ When It Comes to Their Expectations About Long-Term Care?

Do the Sexes Differ When It Comes to Their Expectations About Long-Term Care?

According to The American Association of Homes and Services for the Aging,by the year 2020, 12 million older Americans will need long-term care.  The same study concluded that at age 65, people have at least a 40% risk of requiring care in a nursing home at some point during their lifetime. Despite these staggering statistics, most Americans do not have realistic expectations about long-term care.

The results of a survey that polled a demographically balanced sample of 1,000 adults age 50 and over gave a good indication of what most Americans think about long-term care. The market research firm Matthew Greenwald & Associates conducted the poll at the request of The MetLife Mature Market Institute and AARP Health Care Options. They discovered that when older men and women are asked about becoming disabled and needing daily assistance bathing, dressing, and eating, men’s expectations for how they would be cared for differ from women’s. Men were more likely than women to answer that their spouse or partner would take care of them, and much less likely to respond that their children or stepchildren would become their primary caregiver. They were also less likely to feel that moving in with children would be necessary. Eighty-eight percent of the men chose their partners as the person most likely to be their primary caregiver, as compared with 72% of women.

The study also concluded that 41% of men with children believe their children would become their primary caregiver. However, 55% of women believe their children will be their caregivers. In the same vein, only 26% of men view residing with their children or their spouse’s children as a possibility as compared to 39% of women. These differences in perceptions of children’s roles in long-term care occur only between men and women who are married or living with a partner.

The difference between older men and women in the likelihood of moving in with their adult children is especially significant among Baby Boomers, as almost half of the 50- to 58-year old women believe it is probable they would move in with their children or their spouse’s children. However, when questioned about assisted living facilities and nursing homes, men and women were like-minded. Sixty-four percent of men and 65% of women believe that living in an assisted living facility is possible, while 55% of men and 50% of women felt the same about living in a nursing home.

Among older Americans who are married or living with a partner, 9 out of 10 men and women believe it is likely that they will become their spouse’s primary caregiver if they become disabled. The highest percentage of women who felt this way was found among the 50-to-58 year-olds, with 84% responding affirmatively.

The study found that 43% of men and 38% of women who have children, or whose spouse/partner does, believe it is “very” or “somewhat” likely the children would become their spouse’s primary caregiver.

Is Long-Term Care Coverage Right for You?

Is Long-Term Care Coverage Right for You?

According to the Congressional Budget Office (CBO), “Over the next several decades, the population of U.S. seniors – people aged 65 and older – is expected to grow rapidly, more than doubling by 2040. That surge will probably produce a similar increase in the demand for long-term care services – the personal assistance that enables people who are impaired to perform daily routines such as eating, bathing and dressing.”

While Medicaid covers a portion of LTC costs, you may have to exhaust a great deal of your assets in order to qualify due to strict financial eligibility guidelines. Additionally, rising nursing home costs, which, according to the 2006 MetLife Market Survey of Nursing Home and Home Care Costs, now cost on average $206 a day-$75,190 a year, can lead people to wonder how they will ever be able to afford long-term care if they should ever need it. A product that can help is Long-Term Care (LTC) Insurance.

In general, a LTC insurance policy works by paying a selected dollar amount per day for the type of long-term care outlined in the policy. The most common method insurance companies determine when benefits should be paid, is based on your inability to perform certain “activities of daily living” (ADLs), such as eating, bathing, transferring in and out of bed, and dressing. Usually, benefits are payable when you are unable to perform a specified number of ADLs.  However, some policies will only pay benefits when your doctor certifies that the care is medically necessary.

Some life insurance policies offer long-term care coverage as an option. For instance, the policies would contain a rider that allows the policy’s cash value or a portion of the death benefit to be used to fund LTC expenses. Typically, a portion of the death benefit would be paid on a periodic basis after the insured qualifies. However, money received under this option will usually reduce the amount of death benefit the beneficiary will eventually receive.

LTC insurance is not for everyone; the choice to obtain it or not can depend on your age and financial circumstances. Generally, if you meet the following requirements, you should consider a LTC policy:

·        You are between the ages of 40-84.

·        You have significant assets to protect.

·        You can afford to pay premiums now and in the future.

·        You are in good health, and are insurable.

Since there are many LTC options available, it is best to consult your financial professional for help in determining whether this coverage is right for you.

Most Long-Term Care Claimants Are Younger Than You Think

Most Long-Term Care Claimants Are Younger Than You Think

UnumProvident Corp.’s “Landscape of Long-Term Care” profile of its claims activity revealed that almost 58 percent of group long-term care claimants are younger than 65. It also showed that the top five claims causes are cancer, stroke, neurological disease, dementia and multiple sclerosis.

The insurer noted that its group policies cover about 550,000 employees, and that approximately 200,000 individual long-term care policies are in force.

Additional data uncovered in its analysis of group long-term care claims included:

·   More than 66 percent of all claimants under 65 received care at home, while 17 percent received nursing home care. The National Association of Insurance Commissioners estimates the average cost of nursing home care at approximately $70,000 per year.

·   A typical claim for UnumProvident policyholders under 65 lasts a year or longer.

·   The average age of under-65 claimants is 53, with more than 15 percent younger than 45.

The company also indicated that the conditions affecting these under-65 claimants could require months if not years of treatment and care. In addition, many of these conditions worsen, as the claimants age. Considering that more young people are suffering from conditions like obesity and diabetes, the expectation is that incidence rates will continue to rise for this age group.

The report also referenced U.S. Senate Special Committee on Aging estimates that approximately 10 million people need long-term care today. This figure was compared to a January 2006 Wall Street Journal/Harris poll that found just 9 percent of those surveyed had purchased long-term care insurance. The researchers concluded that the low number of long-term care insurance purchasers is indicative of the lack of education for this coverage and unawareness of the financial risk assumed without carrying coverage.

The most important result of this study, however, was to shatter the myth that long-term care means end-of-life care. The claims analysis shows that both group and individual long-term care insurance is frequently used at much younger ages, a fact that should motivate more employers to offer this important benefit. It should also serve to remind individuals to talk with their insurance agent Brian Gruss 509-927-9200 about protecting themselves from the financial risks associated with long-term care.