A New Approach to Funding Long-Term Care
Today, people are living longer than ever. Whether it’s due to increased health consciousness or ongoing medical advances, the reality is that life expectancies continue to extend. This means that we can enthusiastically and energetically enjoy our retirement—often several decades’ worth.
Maintaining financial solvency for this extended life span is an increasing challenge, especially if constant or prolonged care is required. Statistics indicate that more than half of all people who reach age 85 need some form of care. This would suggest that if a married couple lives into their mid-80’s one spouse or the other will most likely require care.
This care does not come cheaply. Today, long-term care—that which is associated with the activities of daily living such as eating, bathing, and dressing, or the supervision of someone with Alzheimer’s—can easily climb over $70,000 per year. One common misconception many clients have is that Medicare will cover this cost. It does not. Medicaid may cover such costs, but recipients must meet strict income eligibility criteria and are restricted to Medicaid-approved services and facilities. Funding long-term care with savings alone can quickly deplete retirement assets.
Long-Term Care insurance
Retirement dreams and a lifetime of savings could be significantly eroded when financing long-term care. Protecting retirement funds is one of the foremost benefits of long-term care insurance (LTCi). But this type of protection can be cost prohibitive.
Usually, the younger your client is when the purchase a policy, the lower the monthly premium payment is. But even if they buy LTCi 25 years before they need it, the coverage can be costly. Since no on can predict for certain if they will ever need daily assistance, you may find many clients shy away from buying LTCi policies, fearing they might pay in for decades and never actually put their coverage to work for them. In a recent survey, nearly six out of 10 participants said that prohibitive cost was a major reason shy they did not have a long-term care policy. Unfortunately, with a stand-along LTCi policy, if you don’t use it, you lose it.
LTCi Alternative
To meet the increasing demand for long-term care funding and to circumvent the hesitation caused by “use-it-or-lose-it” stand-along LTCi policies, a few life insurers not offer riders that attach to permanent life insurance contracts. These riders—typically called long-term care or “living care” riders—accelerate the policy’s death benefit, creating funds to pay qualified long-term care expenses resulting from chronic illness. In essence, the rider affords the policyholder a safety net should they ever need care, without the price tag of a traditional LTCi policy.
How it works
The concept is simple and practical. Your client chooses the face amount of life insurance they need when they apply for a permanent policy. At this time, they also choose a maximum monthly amount for long-term care benefits—usually up to a maximum of 3 percent of the policy face amount. If, at some point in the future, they begin collecting long-term care benefits, each payment reduces their policy’s death benefit. If, however, they never collect long-term care benefits, their policy’s death benefit is not reduced. If they only use part of the death benefit, the remainder passes to their beneficiaries at the time of the policyholder’s death.The cost of long-term care is already high, but it is going to get even higher. As the baby boomers age, total spending on full-service care is expected to more than triple over the next 25 years. Helping your clients ensure they have a funding option in place—just in case—may be the difference between their financial independence and poverty.
Long-term care riders for chronic illness that are attached to a permanent life insurance policy allow a single policy to potentially meet two protection needs. The policyholder pays a fee for the ability to accelerate their death benefit, but it can be far less than the cost of stand-alone LTCi premiums that may go to waste if they never need care. It is important to note that the face amount accelerated for LTC expenses is not available upon the death of the insured. These riders may not cover all cost associated with long-term care, but they will help lessen the financial burden, helping to protect retirement funds and lifestyle.
For your clients who are concerned about possibly needing future long-term care for themselves, their parents, or a spouse, a permanent life insurance policy plus a long-term care rider may offer an affordable strategy.
For more information visit: http://www.LongTermCareInsurancePros.com
Or Call 949-854-3001 or 1-866-GO-4-LTCi (Toll Free)
Tuesday, July 24, 2007
Monday, July 16, 2007
LTC Quiz: What is your Long-Term Care IQ?
Dane A. Petchul License # OE 49 145
LTC Quiz: What is your Long-Term Care IQ?
How well do you understand the issues regarding long term care?
This short quiz will clear up some common misconceptions.
1. Most long term care is provided in a nursing home. True False
2. The average length of stay in a nursing home is more than five years.
True False
3. Nursing home expenses for Alzheimer's disease patients are covered by Medicare.
True False
4. By shopping around or calling the company directly, you can save money on your Long-Term care insurance premium. True False
5. On average, a one-year stay in a nursing home costs about $35,000. True False
6. People have to spend all or almost all of their assets to receive Medicaid benefits.
True False
7. Nearly 40% of the long term care population is under the age of 65. True False
8. Medicare is the primary funding source for most long term costs.
True False
9. Disability insurance and long term care insurance cover the same type of expenses.
True False
10. Currently, more than 6 million people aged 65 or older need long term care.
True False
11. Most people overestimate the cost of long term care insurance.
True False
Look below for the correct answers.
__________________________________________________________
Answers:
1. The correct answer is False
88% of people who need long term care receive care at home or in a community based setting such as an adult day care center. 12% receive care in a nursing home or other institutional facilities.
2. The correct answer is False
Most nursing home stays are short, recuperative stays. 10% of the total nursing home population faces a stay of five years or more.
3. The correct answer is False
Medicare provides few benefits for long term care services needed by most people with Alzheimer's disease. Medicare provides reimbursement for skilled nursing home care. Medicare pays nothing if the individual requires only custodial care.
4. The correct answer is False
The state regulates the pricing on all insurance plans. The same plan will cost you the same from any agent or company.
5. The correct answer is False
On average, a one-year stay in a nursing home costs about $75,000. This figure can be as high as $110,000 in some regions.
6. The correct answer is True
People have to spend all or almost all of their assets to get Medicaid benefits.
7. The correct answer is True
40% of the people receiving long term care are working-age adults aged 18-65.
8. The correct answer is False
Medicare paid for only 18% of the spending in 1998.
9. The correct answer is False
Disability insurance will not cover most long term care.
10. The correct answer is True
And in fact after the age of 85, half of us will need help with ordinary activities of daily living (like bathing, dressing and eating).
11. The correct answer is True
According to a recent survey, those that do not own long term care insurance overestimated its cost by an average of 50%.
Wednesday, June 27, 2007
A Guide to Caregivers
It's a big, complicated job, and somebody's got to do it.
What you need to know to provide for your loved one.
By Joan Raymond
Newsweek
June 18, 2007 issue - Some 20 million boomers are caring for their families while trying to provide care for aging parents. Few know what they are getting into, says Donna Schempp, program director of the Family Caregiver Alliance, a San Francisco advocacy group. "Caregiving simply happens," says Schempp. "No one really chooses their caregiver. It's almost always a default decision based on who is available." Taking care of a parent can be tough. But there are some extraordinary resources available. The smartest approach is to plan ahead, recognizing that someday you will be a caregiver or someone will be caring for you. Here are some tips to help lighten the load.
Medical Issues
There will come a time when an adult child must make decisions regarding a parent's health care. To ease the way, there are two legal documents that experts say are vital. The first is a health-care proxy. This document, also called a health-care power of attorney, appoints a specific person to make all decisions regarding health care and end-of-life care, including refusal of treatment. The health-care proxy goes into effect when the attending physician determines that an individual is no longer able to make decisions on his or her own.
The second critical document is an advance directive, also known as a living will, which allows the person to state what kind of medical care he wants and which life-support procedures he doesn't want. "One of the greatest gifts an adult child can give to parents is to speak for them when they can't speak for themselves," says Kathy Brandt, vice president of the National Hospice and Palliative Care Organization. According to Brandt, advance directives can be powerful tools alone, but generally carry the most weight when combined with a health-care proxy. "It's kind of an insurance policy that your wishes will be carried out," she says.
It's very important for parents to talk about their spiritual beliefs and values, which may shape their decisions about the procedures they may or may not want at the end of life, says Brandt. One caveat: the laws governing advance directives vary from state to state, so it is important that they make sure their advance directives are state-specific.Another type of advance directive is the Do Not Resuscitate order, or the DNR. Unlike the living will or health-care proxy documents, the patient does not prepare this document. The DNR is a request not to have cardiopulmonary resuscitation if the heart or breathing stops. Though it may be requested by a patient or by a health-care proxy, it is valid only if it is signed by a doctor. A DNR order will then be put into your medical chart. DNRs are accepted in all states.
The second critical document is an advance directive, also known as a living will, which allows the person to state what kind of medical care he wants and which life-support procedures he doesn't want. "One of the greatest gifts an adult child can give to parents is to speak for them when they can't speak for themselves," says Kathy Brandt, vice president of the National Hospice and Palliative Care Organization. According to Brandt, advance directives can be powerful tools alone, but generally carry the most weight when combined with a health-care proxy. "It's kind of an insurance policy that your wishes will be carried out," she says.
It's very important for parents to talk about their spiritual beliefs and values, which may shape their decisions about the procedures they may or may not want at the end of life, says Brandt. One caveat: the laws governing advance directives vary from state to state, so it is important that they make sure their advance directives are state-specific.Another type of advance directive is the Do Not Resuscitate order, or the DNR. Unlike the living will or health-care proxy documents, the patient does not prepare this document. The DNR is a request not to have cardiopulmonary resuscitation if the heart or breathing stops. Though it may be requested by a patient or by a health-care proxy, it is valid only if it is signed by a doctor. A DNR order will then be put into your medical chart. DNRs are accepted in all states.
Thursday, May 24, 2007
Long-Term Care Planning...Big Deal or No Big Deal?
Here’s something to think about: Almost half of people over age 65 will spend some time in a nursing home.
Not only are we more and more likely to require some type of long-term care, but the costs involved in long-term care can be expensive. In fact, the average annual cost involved with a one-year nursing home stay is about $75,190. In many larger cities it can be much more expensive. Unfortunately, none of these expenses are covered by Medicare or Private medical insurance.
Many of us spend thousands of dollars making sure we have things like auto insurance and fire insurance on our homes—and never complain that the money is wasted. The truth is that for every 1,000 people, 5 will have a house fire, 70 will have an auto accident, and roughly 500 will need long-term care.
As obvious as these statistics are, many people are still under the impression that they don’t need to worry about long-term care (LTC) coverage. What’s more, less than 10 percent of those over age 65 have purchased LTC insurance. So, why not insure against one of the most devastating costs of life—Long Term Care?
Fortunately, a record number of “boomers” are beginning to buy long term care insurance. This is most likely due to increased education and the startling statistics we’re seeing. Most of the individuals that come to me for their long- term care insurance needs, do so in order to protect their assets and to insure a choice in the quality of care that they deserve. Of these individuals, the majority that end up needing the care can remain independent, don’t burden family members with constant 24-hour care, and don’t alter their standard of living. For the majority, this is what makes LTC insurance such an obvious choice.
When selecting a policy, it’s important to select a policy that not only you can afford but also meets your needs. There are many insurance policies covering LTC available today. Policies can vary widely in terms of benefits they’ll offer, terms of the contract, and features. Choosing the right policy is not simple. Individuals looking to purchase coverage should consider the following five important factors:
• The insurer’s financial strength rating. You obviously want a solid “A”rated company that’s been around for awhile. They are the most likely to keep your premiums stable and honor your claims without hassle.
• Cost-of-living adjustment (COLA). COLA increases your chosen daily benefit each year in order to keep up with inflation. For example, thedaily benefit amount might increase each year at a compounded orsimple rate of 5%. With the health care costs skyrocketing, this benefitis crucial.
• Home health care and custodial nursing home care. This gives you the option to stay at home and receive care as well as assisted living facilities, and home care, if needed. Most people would prefer to have the option of in home care.
• Qualified policy. Purchase a policy that is “qualified” for tax purposes. Currently both qualified and non-qualified policies are generallyconsidered tax-free. However, the IRS could technically deemnon-qualified benefit payments taxable in the future.
• Guaranteed policy. Is the policy guaranteed for life? Make sure the insurance company can’t cancel your policy due to bad health.While long term care insurance might not be cheap, neither are the costs it covers. For most of us, the solution to all of this is to obtain insurance as early as possiblewhen premiums are lower and before any pre-existing conditions arrive. But what is the solution when seniors are older and coverage is more expensive? While I believe that you should have complete coverage, there are severalways to keep premiums down. To reduce premium costs consider these options:
• Lengthen the elimination period. The elimination period is a lot like a deductible. The longer the elimination period (deductible), the less expensive the insurance will be. However, this means you will have to pay the expenses for the first 30, 60, or 90 days of care. Having a 90-day elimination period can cut premium costs considerably.
• Choose a shorter period of coverage. Instead of choosing lifetime coverage choose a coverage period between three to five years. The savings can be significant and studies show the average length of long term care is approximately 4 years.5
• Choose a lower daily benefit. The average annual cost of private nursing home care is about $200 per day.6 If you chose just $150 per day, you could lower your premiums, if you end upneeding the coverage, you could make up the difference with other forms of income, such as savings and investments.
• Get a joint policy. If you are married, you could get a joint policy that covers both you and your spouse at a discount. Most major companies offer this.
Long-term care insurance is more complex than many other forms of insurance, so I recommend working with a Long-Term care specialist in order to find a suitable plan you’re comfortable with.
Not only are we more and more likely to require some type of long-term care, but the costs involved in long-term care can be expensive. In fact, the average annual cost involved with a one-year nursing home stay is about $75,190. In many larger cities it can be much more expensive. Unfortunately, none of these expenses are covered by Medicare or Private medical insurance.
Many of us spend thousands of dollars making sure we have things like auto insurance and fire insurance on our homes—and never complain that the money is wasted. The truth is that for every 1,000 people, 5 will have a house fire, 70 will have an auto accident, and roughly 500 will need long-term care.
As obvious as these statistics are, many people are still under the impression that they don’t need to worry about long-term care (LTC) coverage. What’s more, less than 10 percent of those over age 65 have purchased LTC insurance. So, why not insure against one of the most devastating costs of life—Long Term Care?
Fortunately, a record number of “boomers” are beginning to buy long term care insurance. This is most likely due to increased education and the startling statistics we’re seeing. Most of the individuals that come to me for their long- term care insurance needs, do so in order to protect their assets and to insure a choice in the quality of care that they deserve. Of these individuals, the majority that end up needing the care can remain independent, don’t burden family members with constant 24-hour care, and don’t alter their standard of living. For the majority, this is what makes LTC insurance such an obvious choice.
When selecting a policy, it’s important to select a policy that not only you can afford but also meets your needs. There are many insurance policies covering LTC available today. Policies can vary widely in terms of benefits they’ll offer, terms of the contract, and features. Choosing the right policy is not simple. Individuals looking to purchase coverage should consider the following five important factors:
• The insurer’s financial strength rating. You obviously want a solid “A”rated company that’s been around for awhile. They are the most likely to keep your premiums stable and honor your claims without hassle.
• Cost-of-living adjustment (COLA). COLA increases your chosen daily benefit each year in order to keep up with inflation. For example, thedaily benefit amount might increase each year at a compounded orsimple rate of 5%. With the health care costs skyrocketing, this benefitis crucial.
• Home health care and custodial nursing home care. This gives you the option to stay at home and receive care as well as assisted living facilities, and home care, if needed. Most people would prefer to have the option of in home care.
• Qualified policy. Purchase a policy that is “qualified” for tax purposes. Currently both qualified and non-qualified policies are generallyconsidered tax-free. However, the IRS could technically deemnon-qualified benefit payments taxable in the future.
• Guaranteed policy. Is the policy guaranteed for life? Make sure the insurance company can’t cancel your policy due to bad health.While long term care insurance might not be cheap, neither are the costs it covers. For most of us, the solution to all of this is to obtain insurance as early as possiblewhen premiums are lower and before any pre-existing conditions arrive. But what is the solution when seniors are older and coverage is more expensive? While I believe that you should have complete coverage, there are severalways to keep premiums down. To reduce premium costs consider these options:
• Lengthen the elimination period. The elimination period is a lot like a deductible. The longer the elimination period (deductible), the less expensive the insurance will be. However, this means you will have to pay the expenses for the first 30, 60, or 90 days of care. Having a 90-day elimination period can cut premium costs considerably.
• Choose a shorter period of coverage. Instead of choosing lifetime coverage choose a coverage period between three to five years. The savings can be significant and studies show the average length of long term care is approximately 4 years.5
• Choose a lower daily benefit. The average annual cost of private nursing home care is about $200 per day.6 If you chose just $150 per day, you could lower your premiums, if you end upneeding the coverage, you could make up the difference with other forms of income, such as savings and investments.
• Get a joint policy. If you are married, you could get a joint policy that covers both you and your spouse at a discount. Most major companies offer this.
Long-term care insurance is more complex than many other forms of insurance, so I recommend working with a Long-Term care specialist in order to find a suitable plan you’re comfortable with.
Get all of your questions answered! We can Help!
Thursday, May 10, 2007
Ten Long-Term Care Insurance Truths
Ten Long-Term Care Insurance Truths
LTCi Supports the Family
1. LTC is about your family, not you. It affects families, not just individuals. This protection provides the dollars so your family can get help for you—preferably at home. LTCi does not replace what families do. Instead, it builds on the family support and allows them to provide the care better and longer.
2. LTCi provides peace of mind to you and your family.
3. LTCi is a gift to your children. These funds enable them to care for an aging parent without overwhelming their lives. How will your planning—or lack thereof—affect your family?
4. LTCi allows you to leave a legacy by protecting your children’s inheritance.
LCTi Can Enhance Your Retirement Plans
5. Long-term care is expensive, so paying for it on your own out of income or assets poses a serious threat to your retirement and financial plans.
6. Get over the denial that this will never happen to you. Please talk to your families and have a plan. The probability of needing LTC is very high. We are now living a long time, increasing the probability of needing care. This may be the largest financial risk Americans face.
7. It’s better to create a plan 10 years too soon than one day too late. And even more significant, the younger you are when you purchase a policy, the less you will pay over the life of the policy.
8. Medicaid reform is here to stay. The message from both federal and state governments is very clear—if you have assets to protect, depending on government welfare programs is not a viable option.
9. LTC costs are high both now and in the future. Think about the cost of care in 20 to 30 years. The purchase of a LTC policy today solves a million-dollar LTCi problem in the future.
Don’t Be Overwhelmed!
10. LTCi can improve quality of life through support programs that promote aging in place. This policy can be considered an ANTI- Nursing home policy. It gives you control, so you can age and receive care in the least restrictive environment possible.
Any Questions? You may reach Dane directly at: 949-854-3001 or email him at dane@LongTermCareInsurancePros.com
Download your FREE Ebook “Solving the Long-Term care Puzzle” visit LongTermCareInsurancePros
To learn more about the risks and costs of LTC and the value of planning ahead, visit http://www.LongTermCareInsurancePros.com
LTCi Supports the Family
1. LTC is about your family, not you. It affects families, not just individuals. This protection provides the dollars so your family can get help for you—preferably at home. LTCi does not replace what families do. Instead, it builds on the family support and allows them to provide the care better and longer.
2. LTCi provides peace of mind to you and your family.
3. LTCi is a gift to your children. These funds enable them to care for an aging parent without overwhelming their lives. How will your planning—or lack thereof—affect your family?
4. LTCi allows you to leave a legacy by protecting your children’s inheritance.
LCTi Can Enhance Your Retirement Plans
5. Long-term care is expensive, so paying for it on your own out of income or assets poses a serious threat to your retirement and financial plans.
6. Get over the denial that this will never happen to you. Please talk to your families and have a plan. The probability of needing LTC is very high. We are now living a long time, increasing the probability of needing care. This may be the largest financial risk Americans face.
7. It’s better to create a plan 10 years too soon than one day too late. And even more significant, the younger you are when you purchase a policy, the less you will pay over the life of the policy.
8. Medicaid reform is here to stay. The message from both federal and state governments is very clear—if you have assets to protect, depending on government welfare programs is not a viable option.
9. LTC costs are high both now and in the future. Think about the cost of care in 20 to 30 years. The purchase of a LTC policy today solves a million-dollar LTCi problem in the future.
Don’t Be Overwhelmed!
10. LTCi can improve quality of life through support programs that promote aging in place. This policy can be considered an ANTI- Nursing home policy. It gives you control, so you can age and receive care in the least restrictive environment possible.
Any Questions? You may reach Dane directly at: 949-854-3001 or email him at dane@LongTermCareInsurancePros.com
Download your FREE Ebook “Solving the Long-Term care Puzzle” visit LongTermCareInsurancePros
To learn more about the risks and costs of LTC and the value of planning ahead, visit http://www.LongTermCareInsurancePros.com
Sunday, May 6, 2007
How to Pick a Long Term Care Insurance Agent: Five Questions to Identify a Real Professional
People seeking long term care insurance should buy it through an independent agent. That's what most experts advise. But there's a problem. "How do you find the right agent?"
Consumers can get frustrated real fast. Looking in the yellow pages or doing an Internet search, may not help come up with the best choice for a Long-Term care insurance specialist.
To help consumers determine if an agent is solid and right for them consumers can ask the following five questions:
1. What insurance products do you offer besides LTC insurance? The aim of this question is to find out if the person's a specialist, selling only or mainly long term care insurance. You don't want someone who divides their attention between LTC, auto and life.
2. What insurance carriers do you represent? You want someone who offers a choice of A-rated companies that offer a range of solid, affordable policies.
3. About how many LTC clients do you have? A seasoned specialist will have dozens to hundreds of satisfied clients.
4. I understand there are tax breaks and other financial ramifications to long term care insurance. Can you advise me on such things? A yes is the best answer here. Well-informed agents know about the relevant regulations, but don't stray into tax law or estate planning details. Instead, they work with knowledgeable financial advisors, accountants, estate planners, and attorneys.
5. How can I learn more about you? The aim of this question is to find evidence of recognized authority. Do they have any professional designations? Can they name local professionals who recommend them? Are they scheduled to speak at an upcoming event? Do they give talks to groups or companies on request? Can they be found on the Internet?"
To learn more about Long-Term Care and Long-Term Care insurance...
Consumers can get frustrated real fast. Looking in the yellow pages or doing an Internet search, may not help come up with the best choice for a Long-Term care insurance specialist.
To help consumers determine if an agent is solid and right for them consumers can ask the following five questions:
1. What insurance products do you offer besides LTC insurance? The aim of this question is to find out if the person's a specialist, selling only or mainly long term care insurance. You don't want someone who divides their attention between LTC, auto and life.
2. What insurance carriers do you represent? You want someone who offers a choice of A-rated companies that offer a range of solid, affordable policies.
3. About how many LTC clients do you have? A seasoned specialist will have dozens to hundreds of satisfied clients.
4. I understand there are tax breaks and other financial ramifications to long term care insurance. Can you advise me on such things? A yes is the best answer here. Well-informed agents know about the relevant regulations, but don't stray into tax law or estate planning details. Instead, they work with knowledgeable financial advisors, accountants, estate planners, and attorneys.
5. How can I learn more about you? The aim of this question is to find evidence of recognized authority. Do they have any professional designations? Can they name local professionals who recommend them? Are they scheduled to speak at an upcoming event? Do they give talks to groups or companies on request? Can they be found on the Internet?"
To learn more about Long-Term Care and Long-Term Care insurance...
Wednesday, May 2, 2007
Long-Term Care Insurance is in the News!
While sorting through the weeks mail, I briefly looked through the Costco Connection. (Costco's combination magazine and catalog).
While flipping it open, I saw an article "Long-Term Care Worth a Look" by Suze Orman. To answer your question, NO Costco is not selling Long-Term care insurance.
They are, however, selling Suze Orman's book which speaks to the need for it. Long-Term care planning is a subject that needs to be addressed as one begins thinking and planning for retirement.
LongTermCareInsurancePros offers a convenient and enjoyable way to get the information necessary to make an educated decision on what is the best plan for your individual and families needs.
I welcome your call at 949-854-3001 or Toll Free 877-GO-4-LTCi (464-5824)
Dane
Subscribe to:
Posts (Atom)
Posts
