Tag Archives: Long Term Care Insurance

Surprising Long Term Care Insurance Statistic

Surprising Long Term Care Insurance Statistic

In a recent report from the American Association for Long Term Care insurance, it states that in 2011 $6.6 billion (6,600,000,000.00) were paid out in claims to 200,000 people.

If all the claims were equal (which we know were not) that would be $33,000.00 per person on claim.

Now not everyone goes on to long term care claim (just like not everyone has a car accident), but if you do go into a facility whether nursing home or assisted living, or you need someone to come to the house, how do you plan on paying that?  Let’s use the number of $33,000 per year (some are higher some will be lower), what will that do to your savings account, your retirement, do your kids have enough to pay for it?

I know it’s a lot of questions, but something that you should at least think about. You should contact me for a quote specific for your situation.

Also did you know when it comes to purchasing long term care insurance that you can write off a portion of it?  I have copied this directly from the IRS website.

Qualified long-term care premiums up to the amounts shown below.
Age 40 or under – $340.00
Age 41 to 50 – $640.00
Age 51 to 60 – $1,270.00
Age 61 to 70 – $3,390.00
Age 71 or over – $4,240.00

Again Contact me with questions.

Exploring the Lesser Known Features of Long-Term Care Insurance

Exploring the Lesser Known Features of Long-Term Care Insurance

Buyers of long-term care insurance often focus on just the coverage basics, such as the level of daily benefits, length of coverage, and under what conditions the policy will pay a claim. While these basics form the chassis of the policy, long-term care policies offer a host of other options that may prove beneficial to the policyholder.

Let’s take a look at some of these available options:

Survivorship Premium Waiver– If both spouses obtain long-term care policies from one insurer, some policies will provide a waiver of all remaining premiums if one spouse dies within a certain number of years after the policy is issued. For example, the policy may provide a premium waiver if the policies have been in effect for 10 years before one spouse passes away. The policy might also stipulate that no claims could have been paid during the period.

This feature may be included with the policy automatically or it may be offered as a rider to the base policy for an extra premium.

Shared Pool of Benefits- Instead of each spouse having an individual policy with separate benefits, they can elect to share each other’s benefits if needed. For example, each spouse might have a policy with a 3-year benefit period. Once one spouse has expired 3 years of benefits they have no further coverage, but the other spouse may still have 3 years of coverage remaining. With the shared pool of benefits rider, the spouse receiving care could also access the other spouse’s benefits.

This feature is most commonly offered as rider to the base policy for an extra premium.

Alternate Plan of Care– With our population continuing to age, new ways of delivering long-term care will continue to be developed. Not too long ago, no one had ever heard of adult day care or assisted living facilities.

With the alternate plan of care feature, you can ensure that your policy will never grow obsolete. You, your physician, and the insurance company will develop a plan of care which best serves your needs based on currently available options.

Look for this feature to be included in the policy with no additional cost.

Accelerated Premium Payment Options– Many insureds worry about their ability to afford premium payments during retirement when their income is reduced. Some insurers offer policyholders an option to pay accelerated premiums for a shorter period of time with the benefit of a contractually paid up policy after a certain period. For example, a 10- or 20-year accelerated payment period with no further premiums due afterwards.

This option has several benefits. Business owners may be able to deduct premiums from their taxes during their working years with no further premiums due in retirement. Additionally, with the cost of long-term care increasing rapidly, a contractually paid up policy means no exposure to premium adjustments made by insurers in future years to account for higher than expected claims experience.

Enhanced Elimination Periods– While all policies provide several elimination period options ranging from a 0 day to a 180 day elimination, it’s important to understand how the elimination period can be satisfied.

For example, some policies may credit a week towards your elimination period with just one day of home care received per week. Still another policy may have no elimination period for home care benefits while nursing home or assisted living facility care may require an elimination period.

These are just a few of the lesser-known features of long-term care insurance. There are many other options to consider when selecting a policy, but be sure to compare not only the basics of each policy but the included features and available riders.

Home Health Care – Another Option for Your Long-Term Care Needs

Home Health Care – Another Option for Your Long-Term Care Needs

You’ve decided that the purchase of a long-term care policy for yourself and your spouse would be advisable.   The figures, however, are daunting and the premiums exceed your budget.  If you are considering the idea of long-term care insurance, the option to receive necessary assistance in your own home may be more preferable to living in a nursing home.  Because the vast majority of the middle aged and senior population are in favor of this option, the insurance industry has responded.

The assisted living and home health care industry is growing along with the desire to receive care in your own home.  Most long-term care insurance providers are now offering the consumer the opportunity to purchase insurance that provides coverage for community health services and home health care at much lower rates than a full blown long-term care policy.

For example, using the guidelines of one “A” rated provider, full coverage for a 55-year old married couple, both in good health, with a $150.00 per day policy featuring inflation protection and a 30-day waiting period, would require an annual premium of about $2600.00.

The same provider also offers a policy covering home health care and community care coverage for an annual premium of just under $1,000.00, a considerable savings over the full coverage policy, while still offering protection for the most commonly required assistance.

While some policies will restrict the care to be offered by licensed providers, there are policies now available which also offer coverage for services performed by non-licensed personnel, allowing the opportunity for care to be provided by people known to the policyholder, such as a family friend or a neighbor.  This raises the comfort level of the care provided, since allowing strangers into their home is something of which most seniors are wary.

In order to prevent fraud or abuse of the coverage, family is excluded from providing services in most cases, unless the family member happens to be a licensed provider.

As the baby boomer population ages, and home health services are seeing increased effectiveness and popularity, the purchase of this type of coverage can be an affordable, attractive alternative to the more traditional long-term care insurance.

Long-Term Care Insurance: A Multifaceted Protection

Long-Term Care Insurance: A Multifaceted Protection

Child care has historically been America’s number one dependent care concern, but this could be changing in the coming years. Over 77 million American baby boomers are expected to transition into retirement during the next ten years. Experts are predicting that this large aging population will cause the number of individuals in need of long-term care services to double during the next 30 years. In fact, some have estimated that there will be more than 14 million Americans in need of some degree of assistance with their activities of daily living by the year 2035. With these numbers, senior care might soon be the new leading dependent care issue.

The average yearly cost of long-term care is anywhere from $25,000 to $95,000, depending on the area of the country the long-term care services are rendered. Many families find themselves faced with paying for these expensive long-term care services out of their pocket if their loved one is without long-term care insurance. While this can certainly be a financial stressor, money to pay for long-term care services isn’t the only concern when long-term care insurance is absent.

Families facing the out-of-pocket cost of long-term care services will find themselves trying to decide between taking their aging loved one into their own home and personally caring for them -or- finding the funding to pay for a professional caregiver or nursing home bed. Most families that don’t have long-term care insurance to pay for services don’t just have $25,000-$95,000 laying around and will ultimately end up caring for their loved one from home. These families learn quickly that this scenario, especially when combined with the responsibilities of dependent children being in the home, has significant physical, mental, and emotional impacts on everyone in the household.

Caregivers that are also trying to hold a job outside the home will often find conflict between their employment responsibilities and caregiver responsibilities. Most will find the balancing act too difficult and end up quitting or getting fired from their job. The resulting missing income will frequently cause families to find themselves financially struggling, if not drowning.

Caring for an ailing or aged loved one is a full-time 24/7 job in itself. Everyday tasks that were once mundane and almost automatic, such as bathing, eating, dressing, and grooming, suddenly become overwhelming struggles that take a toll on the entire household.

Caretakers often find that they devote so much time to their caretaking role that they tend to neglect their own physical and mental health. The caretaker often abandons healthy eating habits, exercise, and leisure activities as there becomes more and more to do and less and less time to do it within.

Sleep is yet another area of life that often changes. Medical and personal needs of the loved one often require the caregiver to get up multiple times throughout the night. Sleep deprivation has been shown to cause a number of health problems. In fact, multiple studies on long-term caregivers have shown that they have more health problems and a shorter lifespan than those without such responsibilities.

All of the above considered, it shouldn’t be surprising that caregivers suffer from dangerously high levels of stress.

Help Yourself And Your Loved One With Long-Term Care Insurance

Planning ahead now can prevent a lot of stress in the future. Some think of long-term care insurance as an unaffordable luxury, but the price of long-term care insurance is minor compared to the price a caregiver and everyone else in the household often pays with their health and financial stability. While planning for a time when your loved one is no longer mentally or physically able to care for themselves isn’t a fun thought process, it’s vital that you plan for long-term care situations to protect the emotional, physical, and financial well-being of everyone involved.

Since long-term care insurance gives your family the ability to afford expensive professional and semi-professional long-term care, you won’t be worrying about the financial side of things and will be free to focus on your own and your loved one’s emotional issues from the transition.

In summary, the multifaceted protection afforded by long-term care is just too important to the health of your family to overlook. An experienced and reliable financial adviser can help your family design a long-term care plan that’s congruent with both your budget and needs.

— Brian Gruss 509-927-9200

 

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.