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You are Not as Financially Smart as You Think You Are

August 9, 2016 by Honey Leave a Comment

The name of the New York Times article is “What You Think You Know About Money, but Don’t, Can Hurt You”. I prefer to be more blunt: You are not as financially smart as you think you are.

The Finra Investment Foundation does a long-term, ongoing study on the public’s financial literacy. The 2016 study has just been released.

People are far more financially vulnerable than they believe they are. Fewer people got the answers the same five questions correct this year; this is a continued trend. Conversely, 76% of subjects gave themselves a “very high” rating on financial knowledge. This percentage continues to increase.

I have no idea whether these trends correlate to increasing income inequality, decreasing educational levels or overall hard times.

This behavior correlates well with the denial I’ve faced for over 25 years. When I ask people with good jobs and lots to lose, who know me, who like me, who recognize my competence, ethics and sincerity, whether they’ll have a conversation with me about long-term care planning odds and options, my invitation is usually declined.

The Finra study proves to me that we are going to have millions upon millions of people who need long-term care and are woefully unprepared for it. Because of this, many people will suffer unnecessary loss of dignity, family discord and sacrifice, and financial ruin.

LTCi Rate Hikes in the News

August 1, 2016 by Honey Leave a Comment

Inflammatory comments about rate hikes on the Federal long-term care insurance plan are in the news.

I have written extensively about rate hikes. I encourage people to read what I’ve written. Even after reading about what causes rate hikes, many people still don’t understand them well, or they are reacting to them emotionally rather than rationally. That is when you should call me.

The long-term care insurance (LTCi) industry does not like or want rate hikes. It never has, it never will.

LTCi rate hikes are bad for business.

The LTCi industry did not deliberately sell low-priced policies in order to raise rates later, causing people to drop their policies so they can weasel out of paying claims.

People have many more misconceptions about LTCi rate hikes.

In the case of people who own the Federal LTCi plan, I feel especially bad. They have group coverage. They do not have an accountable salesperson to call. Many are elderly. There is no one to explain what their options are.

Many Federal LTCi policyholders have coverage with extremely robust benefits – benefits that have continuously increased over the years. Sometimes we can pare back these LTCi policies, lower premiums, and retain extremely high performing coverage. Sometimes I show people that even with the rate hike, they still have under-priced coverage.

If you, or someone you know, own a Federal LTCi policy and need further understanding of your LTCi rate hike, please call me.

LTCi Rates Are Stable

July 11, 2016 by Honey Leave a Comment

On June 27, 2016, I attended a landmark long-term care insurance (LTCi) presentation. It took place at the www.NAHU.org Convention in Albuquerque, NM. My colleagues and I produced the session as part of our work on NAHU’s National LTC Advisory Committee. Actuaries spoke in clear, lay language and explained why very sound, long-range actuarial evidence indicates today’s LTCi policies should be very immune to future rate hikes. The actuaries giving the talk do not work for a particular LTCi carrier; they are members of the Society of Actuaries (www.soa.org)

I have written about LTCi rate hikes before.

The reasons actuaries are very confident today’s LTCi policies will suffer few, if any rate hikes are:

Current LTCi pricing assumptions are based on claims data that is much more extensive now than existed just a few years ago.
Current LTCi policies are priced to insulate against future rate hikes. Today’s LTCi rates are higher than they were 14 years ago but still reasonable.
Competitive LTCi plans now have prices that are much closer to each other than they used to be. This indicates actuaries agree on what carriers will experience.
Today’s LTCi rates have been priced with much lower policy lapse rate assumptions (0.6% lapse rates).
Today’s LTCi rates are now based on today’s very low investment performance (4.6% interest in all policy years).
Today’s LTCi policies are required to assume claim rates that are at least 10% higher than are actually expected.

One in Five Nursing Home Residents Report Abuse

June 20, 2016 by Honey Leave a Comment

A new study reports one in five – or about 20% of nursing home residents – have experienced at least one resident-to-resident abusive event.

This is a conundrum brought about by abysmally low pay to nursing home caregivers, and by Medicaid reimbursement rates so low it is difficult for nursing homes to stay in the black. The majority of nursing home residents are covered by Medicaid.

Here’s a blog I wrote showing nursing home workers are quitting to work at McDonald’s, where they get paid more and don’t have to mess with bedpans or possible back injuries.

The article mentions the double homicide at a nursing home not far from here. Here is a series of blogs I did about this event.

If you want to greatly increase the odds you will not wind up in a nursing home, you need to own long-term care insurance (LTCi). Most LTCi policyholders are able to remain at home or move to an assisted living facility, instead of a nursing home. The evidence is in a recent AHIP study sited here; ask and I will email the complete study to you.

Late in Life Decisions Are Often Impaired

June 6, 2016 by Honey Leave a Comment

Sumner Redstone, center, at a 2012 charity event with, from left, Manuela Herzer and Sydney Holland, both ex-lovers who have figured in a battle over his care. Credit Brian to/WireImage

In what may be an “extreme example of the high stakes and chaos that can result, the Redstone pattern is happening in epidemic proportions,” reports a June 2 New York Times (NYT) article.

This article dovetails beautifully with my recent blog on the evidence proving why loss of cognitive speed, verve, and financial literacy is a normal part of aging.

Feuds between 93 year-year-old billionaire Sumner Redstone and his former mistress, estranged daughter, and former heir apparent have been graphically, publicly aired for the past few months.

The NYT article goes on to state that familial feuds like Mr. Redstone’s are becoming more prevalent due to Alzheimer’s and longer lifespans. The elderly are especially susceptible.

The article states that similar situations can often be averted by proper legal planning, with more explicit trust language. In addition, everyone should have and share extremely explicit personal, financial and medical directives, and of course, own long-term care insurance (LTCi).

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You are Not as Financially Smart as You Think You Are

LTCi Rate Hikes in the News

LTCi Rates Are Stable

One in Five Nursing Home Residents Report Abuse

Late in Life Decisions Are Often Impaired

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