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Archives for March 2016

Honey’s State of the LTCi Industry

March 21, 2016 by Honey Leave a Comment

Honey Sally Tobe Betty at ILTCII’ve just returned from the Society of Actuaries 16th annual Intercompany Long-Term Care Insurance Conference a few days ago.

I believe most attendees left the conference feeling more enthused about the future of long-term care insurance (LTCi) than we have in a while.

New carriers are entering the market. I got to preview National Guardian Life’s new LTCi policy, due for release this Spring. I am told its rates will be competitive and it will have some “sweet spots.” It’s an exciting plan and has some innovative, very attractive “spins” on traditional features.

Additional new products are entering the market, too!

My sentiment, and I believe that of the majority of attendees, is that the worst is over. Interest rate assumptions can’t be lower. Lapse rates, mortality and morbidity (how many policyholders will die or need LTC) have already been adjusted for “worst case,” hyper-conservative scenarios.

Long-term studies based on extensive experience & appropriate adjustments have convinced actuaries that the current generation of LTCi products are and will be very rate-stable.

The new, asset-based (also called “hybrid” or “combo”) LTC products are now mature, excellent products.

We now have a broader portfolio of rate-stable LTC solutions, reasonably priced, than ever before.

The press, this past year, has done excellent reporting on why Medicare and Medicaid cannot and will not pay for our LTC. Media has reported well on the high odds of needing LTC and the heartbreak patients and families often suffer due to unplanned LTC needs.

Demographically, there remains a huge, underserved market of Boomers and others who are unprepared and vulnerable to the “spending shock” of having an unplanned LTC need.

Some things have not changed in the 25+ years I’ve been working with LTCi. The public is still steeped in profound denial about their need for LTC. People would rather pay for fun things like travel and other toys than face the facts about needing LTC. There are still misinformed journalists who describe LTCi coverage erroneously, and inaccurately harp on wanton LTC rate hikes.

Filed Under: Denial, Elephant in the Room, Helpful Information About LTC, I'll Just Self-Insure, Information About LTC Tagged With: annuity-based LTC, asset based LTC, Long Term Care insurance, long-term care, LTCi, Medicaid, Medicare, Spending Shock

Elder Orphanism

March 17, 2016 by Honey Leave a Comment

Elder OrphanismWe will be reading more about elder orphans. Even if we have a slew of kids, we are likely to wind up as elder orphans. We must plan for this right now.

Here is a link to a beautiful column describing what the future is likely to look like.

Thanks to the author, Dave Nesbit, for allowing me to re-publish this.

“New Year’s Day is a time to turn the page on our bad habits and start new and positive behaviors.

Here’s a challenge of what self-interested baby boomers should resolve to do now—reach out with personal compassion and respect to younger people. This might seem to be inverted thinking from “respect your elders.”

Over the last century, progress in transportation and technology enabled the settling of our vast country and made the intergenerational family farm all but obsolete. Maybe your children, as mine, are now adults who have relocated outside of our geographic area to fill the labor needs of America’s expanding economy. As 20th century labor mobility has undercut traditional family life, affordable cellphone plans appeared in response.

In 1915, a 3-minute coast-to-coast phone call cost $20.70, which was 3 percent of the $687 average annual income. By 1940, that same call cost $3, when the average house rented for only $30 per month. By 1970, the 70-cent cost was the same as a McDonald’s quarter-pounder. Now the insignificant cost of a lengthy call, along with Skype, might deceive us into believing that our family needs are fulfilled by inexpensive communication. They aren’t.

Today’s communication is not much more meaningful than when I as a child chimed in “Hello Grandma, I love you” during a 3-minute call. Fifty years ago, Bell Telephone advertised that “long distance is the next best thing to being there.” Maybe it is, but it’s a “poor second” and an inadequate balm for the loneliness and vulnerability of older persons who are distant from their family’s younger generations.

When I was growing up, my mother “adopted” three widows who shared special times with our family. Those surrogates helped to fill the void of absent biological grandparents, who I rarely saw. Until she was in college, our daughter did not realize how lucky she was to grow up in the same town with two sets of grandparents who she saw often and knew well.

Especially since our children live out of state, I’m glad that my wife and I own long-term care insurance and have colleagues at Keystone Elder Law. Both will be great assets when aging causes us to become frail, and we need to develop and implement a caregiving plan. It certainly would be a healthy supplement if a surrogate, family-like relationship would develop outside of our organizational environment.

I have witnessed such an intergenerational relationship develop among members of a service club, when one is missing a parent/grandparent(s) and another is missing a child/grandchild(ren). Similarly, such relationships can originate naturally among neighbors. Churches that seek a means to translate scripture into practice could encourage and nurture intergenerational surrogate families.

Pennsylvania rewards live-in caregivers. The state initiates an action during probate to recover Medicaid funds paid to provide care in a nursing home. However, live-in caregivers who do not own their own home and who lived with an unrelated frail person for at least two years prior to that person relocating to a nursing home, may inherit the home free of any estate recovery.

In his futuristic novel titled “2030,” Albert Brooks suggests that, by that date, the national debt will have outpaced the gross national product, medical breakthroughs with cancer and other diseases will enable longer life expectancy, and older persons will be confined in worn-out and all-but-forgotten cruise ships that are anchored off the West Coast. Young people, who work harder and receive less, will be incited to form gangs and become violent against older people, who seem selfish to them.

Could surrogate families be a possible antidote for both the intergenerational separation caused by mobility, and the pessimistic clash between the young and old as told in Brooks’ novel?

Over the past half century, the American melting pot has blended Catholics and Protestants, and Christians and Jews, into neighborhoods and families. Is it too hopeful to imagine that Judeo-Christian families and neighborhoods will assimilate peaceful Muslims? Would acts of kindness from Judeo-Christians to vulnerable younger Americans not only lead to surrogate families, but also make our younger generation less vulnerable for recruitment by radicals who promote terrorism?

As my wife and I visited our children and grandchildren in south Florida over Thanksgiving, I observed a significant number of interracial families. This contrasted with my recent, sad experiences with a couple of families in which a parent had alienated their child decades ago because of an interracial relationship. Could it be that racial intolerance within families is waning as rapidly as the relevance of the cost of a long-distance call?

The legislature and courts have forced a legal settlement of most of the controversial sexual preference issues. Is Brooks correct that the emerging issue for the 21st century will be the young versus the old? According to a Pew Foundation study, the declining percentage of Americans who are younger than age 15 will cross over the growing percentage of Americans who are over age 65, at the number of 20 percent, just before the year 2030.

How will the legislature and courts manage public resources and entitlements, when fewer younger people are available to support the larger number of older people who live longer? Will life-prolonging drugs be provided to the poor? Will Medicare have maximum lifetime benefit? Will the cost of long-term care for seniors deplete Medicaid funding for young families and children? Will the ethics of assisted suicide and euthanasia be considered seriously?

Politicians have kicked the can of painfully real solutions into the future. Our children will be taxed excessively, not only to repay escalating public debt created by our generation, but also to pay for entitlement programs to take care of aging baby boomers. Be proactive about this dilemma.

If not out of shear kindness, then in recognition of your probable future long-term care needs, create a surrogate family. Find younger people in your neighborhood, service club or church to befriend graciously now. Maybe they will respond in kind to manage and advocate for your care in the future.”

Filed Under: Denial, Elephant in the Room, I'll Just Self-Insure, Information About LTC, The Magic of owning long-term care insurance Tagged With: Baby Boomers, Better Homes and Gardens, Boomers, Elder Orphanism, elder orphans, home care, Information About LTC, long-term care, Medicaid

Extraordinary Story of Devotion…and No LTCi

March 14, 2016 by Honey Leave a Comment

Helping Mother Bathe
Elizabeth helps her mother bathe.
Mark Makela for The New York Times

A story in yesterday’s New York Times titled “Living With the Parents I’m Losing to Alzheimer’s blew me away. I hope non-subscribers can open it.

Here’s the accompanying slideshow.

The story is about Elizabeth Wolf, a very generous, candid, public person with a blog at www.upsidedowndaughter.com.

Read the column or blog to learn that five years ago Ms. Wolf was enjoying young adulthood and exciting new pursuits when she gave them up and returned home to become her parents’ primary caregiver. Both parents have Alzheimer’s Disease. She’s doing this with the help of her extremely devoted husband.

We know from graphic, detailed information in the story about finances and day-to-day coping, neither parent owns long-term care insurance (LTCi).

If you’re like me, you are forced to wonder how extremely different Ms. Wolf’s life and relationships with her husband and parents would be if one or both parents owned LTCi.

Filed Under: Denial, Elephant in the Room, Helpful Information About LTC, I'll Just Self-Insure, Information About LTC, New York Times Tagged With: Elizabeth Wolf, Long Term Care insurance, long-term care, LTC, LTCi, Medicare, Paula Span

LTCi Pays – Have the Conversation Now!

March 3, 2016 by Honey Leave a Comment

LTCi PaysThe following piece was authored and is re-published here with the permission of my dear friend and colleague Tobe Gerard.

Tobe makes two points. The first is that long-term care insurance (LTCi) policies are normally purchased many years in advance of being needed. We are now seeing “the tip of the iceberg” of claimants who need to collect from their LTCi. For the foreseeable future, we should see annual increases in the number of claims being filed and the amount of money being paid out for LTC.

The second point Tobe is making is that it is typically a son or daughter who assists with the claim. LTCi claims are not onerous, but policyholders are typically not able to manage them alone. Letting kids and other trusted individuals know you own LTCi is sometimes difficult, but worth it. Knowing a parent owns LTCi proves to be a balm and a source of extra piece of mind and security for all involved.

Here is Tobe’s excellent blog:

According the the American Association for Long-Term Care Insurance, long-term care insurance (LTCi) companies paid $8.15 billion in claim benefits to 260,000 policyholders in 2015. That number is 4% more than what was paid out in 2014. We are all living longer, and though your clients hope to never have to use their policies, the good news is that policyholders and their families are benefiting from owning this important insurance protection. When the rubber hits the road, LTCi policies are paying out!

With that in mind, many advisors encourage their clients to have “the long-term care conversation” with their adult children. It’s not an easy conversation, but it is an important one. Having this conversation early allows adult children to know that their parents have thought things through and have a plan in place. Among other things, breaking the ice by having this conversation early allows adult children to know their parents own LTCi policies. The reality is that in most instances it will be the adult children who will be involved with filing the initial LTCi claim and, in many cases, supervising the care that will be required over time. Adult children want to learn what their parents have in mind. Owning a LTCi care policy should never be kept a secret!”

Filed Under: Helpful Information About LTC, I'll Just Self-Insure, Information About LTC Tagged With: AALTCI, home care, long-term care, LTCi, the American Association for Long-Term Care Insurance

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Fax: 281-829-7177

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Honey Leveen, LUTCF, CLTC, LTCP
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Phone: 713-988-4671
Fax: 281-829-7177

Email: honey@honeyleveen.com

Email: honey@honeyleveen.com

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