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Does Your Long-Term Care Plan Account for Your Own Normal, Natural Cognitive Decline?

May 19, 2016 by Honey Leave a Comment

Wade Pfau, PhD, CFA, whom I’ve previously praised effusively, writes about research confirming that we all will, very gradually, lose our cognitive speed, financial literacy and verve. I believe our natural good judgment will fade along with these things because I see my clients demonstrate this so very often.

Here’s a paper Dr. Pfau cites that illustrates this normal, natural cognitive decline.

Here’s another paper Dr. Pfau cites proving normal decline in financial literacy at advanced ages.

At a healthy age 63, I notice these changes in myself to a very minor extent. I am pretty sure it’s age related and not dangerous yet. It is just annoying.

I had breakfast with a long-time financial planner this week. He believes affluent people should self-insure for long-term care. I believe that he, like so many, is divorced from and not willing to imagine the psychological reality of what often happens at advanced ages.

I gave him many reasons why affluent people need long-term care insurance (LTCi). They buy it in disproportionately high numbers. I have blogged about this extensively.

Dr. Pfau’s article gives compelling scientific proof of why the elderly are often the victims of their own bad business decisions.

I see in-person proof of these same things. Even if they have no diagnosis of cognitive impairment, I see elderly clients making very bad personal and business decisions, time and time again. I am very disturbed by this.

Children of affluent clients with multi-million dollar wealth tell me their parents would not avail themselves of home or assisted living care without their LTCi.

From what I’ve seen with my clients during the past 25-plus years, the most important reason to own LTCi may be the lack of good judgment plus the common familial dysfunction that too often accompanies aging and decline.

Long-term care insurance provides a plan that plugs in and works. When need arises, no thoughts about which assets to liquidate to pay for LTC are necessary. Irrational thoughts of outliving savings are quashed. Thoughts of imposing on family members are minimized. LTCi can drastically reduce stress and increase quality outcomes.

Media Continues to Love Trashing LTC Insurance

May 16, 2016 by Honey Leave a Comment

I will never completely understand why inflammatory headlines like this are necessary: “Out-of-Control Premium Hikes for Long-Term Care Insurance”.

I do partially understand why they run inflammatory headlines. “If it bleeds, it leads”. Disparaging headlines sell copies.

Nowadays, the majority of LTCi media coverage is constructive. But readers usually have to get past negative titles and first paragraphs intended to “hook” people into reading the story.

In the case of Long-Term Care Insurance (LTCi), this is very harmful to the public. Disparaging headlines and lead paragraphs further encourage people to make excuses to avoid important, necessary conversations about planning for LTC.

In addition, inflammatory LTCi coverage fuels falsehoods such as out-of-control, wanton rate hikes and claim difficulties.

If people bother to read “Out-of-Control Premium Hikes for Long-Term Care Insurance” they will find excellent reporting on why today’s LTCi policies should experience very stable rates with very minimal odds of rate hikes.

Click here to read several blogs I’ve done that explain the reasons for and likelihood of LTCi rate hikes.

I want to give a “shout out” to my highly esteemed friends and colleagues Scott Olson, Steve Cain, and Jesse Slome who were quoted in this story. This article’s excellent content is largely due to their input.

Spring Comes to LTC Insurance

May 10, 2016 by Honey Leave a Comment

My good friend and colleague Steve Forman has written a report titled “Spring Comes to LTC Insurance”. Here’s a link to the report.

Like me, Steve believes good times are coming for long-term care insurance (LTCi) sales. Here’s a blog I just did about how rate-stable today’s LTCi policies are.

Here’s an excerpt from Steve’s report explaining why the LTCi market is poised for an upswing in sales:

“While the last decade was marked by carriers exiting the long term care insurance market (from a peak of around 110 to today’s dozen or so), the transition to a soft market predicts new entrants will return. And that’s exactly what we’re seeing (aided by a new study from the Society of Actuaries which demonstrates to sideline insurers the remarkably good odds of a profitable future selling LTCI). Within the last twelve months, heavyweight endorser AARP has signaled a new partnership with the private market, a brand new carrier has announced its intention to sell traditional LTCI, and a third major brand has shed every product in its portfolio but LTCI.

Meanwhile, the number of life insurers who recognize the demographic opportunity represented by the Silver Tsunami is unprecedented: seven have entered the combo space within the past five years, while over twenty offer an accelerated benefit for chronic illness and/or critical illness. LIMRA reports that acceleration riders are now a “must have” benefit, and one carrier was quoted in confidence saying, ‘You will never see another life insurance product sold by us which does not include a long term care benefit.'”

Today’s Long-Term Care Policies Are Well Priced

April 18, 2016 by Honey Leave a Comment

The March, 2016 edition of Broker World Magazine features an article called “Reflecting On Rates – Examining The Outlook of Today’s LTCI Pricing” written by two actuaries, Marc Glickman and Laury Falter, both of www.LifeCareAssurance.com. I can email this article to you.

They state that there is strong evidence of significant and mostly unrecognized safety in current long-term care insurance (LTCi) pricing, as a result of the Society of Actuaries Pricing Project, a very long range study.

They explain “LTCi pricing is now more conservative than ever because interest rates are at historical lows. Lapse rates have been effectively de-risked, and both mortality and morbidity reflect more conservative best estimates.”

The odds of suffering oppressive, frequent rate hikes on today’s LTCi policies are very low. The article goes on to back up these claims.

Of interest is a new trend caused by improved mortality and morbidity, meaning LTCi policyholders are dying, getting sick, and filing claims later than expected.

Only about 22 % of all LTCi claims are caused by Alzheimer’s Disease or other dementias. However, the article states that over half of all LTCi claim costs are due to Alzheimer’s or dementia.

Today’s LTCi policies are more lenient than ever. Buyers can expect very stable rates going forward!

TX Nursing Home Employees Quitting to Work at McDonald’s

April 12, 2016 by Honey Leave a Comment

According to reporters at Lubbock’s KLBK13, in a story titled, Nurses Quit Texas Nursing Homes to Work at McDonald’s, we face a dire shortage of nursing home beds by the end of this decade.

Nursing home employees, particularly certified nurse assistants, who are “front line” caregivers, get the worst pay, typically about $8/hour.

Meanwhile, McDonald’s is hiring, and they pay significantly more. Furthermore, their employees don’t have to mess with bed pans or risk injuries from transferring patients.

The story says TX nursing homes lose approximately $300 million per year. 85 percent of TX nursing home residents depend on Medicaid or Medicare. Each Medicaid patient is underfunded by 14 percent.

This dovetails with information I just received from Seven Acres, the Jewish nursing home here in Houston. Their April 2016 newsletter says, “Over 80% of our residents are so ill and indigent that they qualify for the state Medicaid program, which underfunds Seven Acres by $33,000 a year for each Medicaid resident. This translates into a $8 million annual loss for the Home. It is only through the generous support of our friends and community partners that we are able to offset the significant cost of care that Medicaid does not cover.”

Long-term care insurance (LTCi) ownership greatly increases the odds people will not receive care in a nursing home. Even the very best nursing homes – like Seven Acres – struggle with staffing shortages.

I’ve already sent Seven Acres my annual contribution.

Does Your Long-Term Care Plan Account for Your Own Normal, Natural Cognitive Decline?

Media Continues to Love Trashing LTC Insurance

Spring Comes to LTC Insurance

Today’s Long-Term Care Policies Are Well Priced

TX Nursing Home Employees Quitting to Work at McDonald’s

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