Elephant in the Room Archives - Page 13 of 18 - Long Term Care Insurance Expert | Honey Leveen

The Distilled LTCi Facts

January 27, 2015 by Honey Leveen Leave a Comment

Big thanks to Margie Barrie, long-time colleague and friend, for the following insights that “sum it up” for long-term care insurance (LTCi). The information below came from an article Margie recently wrote for LifeHealthPRO.

1. 73 percent of claimants are receiving benefits outside of a nursing home:

49 percent: Home health care.
24 percent: Assisted living.
27 percent: Nursing home.

2. 21 percent of claims are expected to last five years or longer.

3. What are the odds of needing long term care?

58 percent of men ages 65 and over will need care, for an average of 2.2 years.
79 percent of women ages 65 and over will need care, for an average of 3.7 years.

4. Assisted living facility, average length of stay: 21 months.

5. The average premium for a stand-alone LTCI policy is $2,400. That’s 3 percent higher than it was a year ago.

6. 92.3 percent of buyers are buying policies with elimination period of 90 to 100 days.

For clients who want to dive deeper

6. Medicaid: $117,240 is the maximum amount of assets that the federal government will let a healthy spouse keep before the other spouse can be eligible for Medicaid long-term care benefits. (Many states set the cap at a lower level.)

7. Lapse rate for LTCI policies:

1 percent is the estimated lapse rate for stand-alone LTCI policies.
0.5 percent is the estimated lapse rate now being used by Genworth in its projections.

8. 4.5 years is the average length of time someone lives after being diagnosed with dementia.

9. Claims length:

42 percent of claims last less than one year.
Claims lasting less than year are usually for home health care and caused by falls.
The average length of claim that lasts more than a year is four years.

10. Claims: How much?

$7.5 billion of LTCI claims were paid in 2013.
Over $5.2 million was paid each business day.
273,000 people received benefits.

11. Claims: Who’s getting the benefits?

71 percent of the benefits dollars are paid to female claimants
51 percent of the benefits are paid to claimants with mental disorders, including dementia.

12. Claim records (from Genworth):

27 is the age of the youngest person to go on claim.
103 is the age of the oldest person to go on claim.
About 20 years is the length of the longest claim.
$1.3 million is the amount of benefits paid in connection with the biggest single claim.

13. Age of buyers:

24.7 percent are between the ages of 45 and 54.
54 percent are between the ages of 55 and 64.
57 is the average age of applicants.

14. In 2011 and 2012, 67 percent of nursing home residents were female.

15. The number of people using long-term care services:

15 million: The number of people in the United States using nursing homes, alternative residential care or home-care services for LTC needs in 2000.
27 million: The number of people in the United States who are projected to be using nursing homes, alternative residential care or home-care services for LTC needs by 2050.

16. Demographics:

40.2 million: The number of Americans ages 65 or older in 2010.
88.5 million: The projected number of Americans ages 65 or older in 2050.

17. Burden on unpaid caregivers:

80 percent of long-term care is provided by unpaid caregivers at home.
67 percent is the approximate percentage of unpaid caregivers who are female.
67 percent of the people who plan to have a loved one provide care, haven’t asked the loved one.

Take Care of Your LTCi Before You Take Care of Your Kids

January 21, 2015 by Honey Leveen Leave a Comment

According to a Genworth study, half of the 1,200 caregivers surveyed said providing care for loved ones took a significant toll on their careers, and 11 percent said they lost their job. Ten percent had to change careers completely. On average, caregivers reported losing one-third of their income when they became caregivers.

Knowledgeable financial advisors recommend taking care of your own long-term care planning first, before giving your kids money.

An October 9, 2015 New York Times article by Constance Gustke says parents are often making things harder for themselves and their kids in the long run by making things too easy for their kids in the short run.

I’ve seen a great many circumstances just like the following, quoted from the article:

“Take Jacquelyn McClellan, 74, who lives in Orange City, Fla. In what admittedly is an extreme case, Ms. McClellan, a retired program analyst for the federal government, began paying for various expenses for her grandchildren after her son said he could not afford them. She paid for dancing school, parochial school, trips to Disneyland, all with the help of money from her pension.

These payments ended up tipping Ms. McClellan into bankruptcy in 2011. Since then, Ms. McClellan has sharply dialed back her own lifestyle. She can’t go on vacation cruises and has only minimal savings.”

Unless it is a true emergency, do your own long-term care planning first, before giving your kids money.

PBS NewsHour misrepresents LTCi

January 16, 2015 by Honey Leveen Leave a Comment

Here’s a link to a PBS NewsHour story from January 9, 2015. The story is about a wildly successful long-term care insurance claim. But this is not what was emphasized.

The PBS story portrays long-term care insurance (LTCi) as a mysterious, super-complicated product. It describes the elimination period and Activity of Daily Living triggers as onerous. This is false. If the LTCi credentialed insurance agent who sold the described policy had the barest trace of competence, I am nearly certain the couple was probably well-educated about how their LTCi policies worked when they purchased them. LTCi is not as complicated as portrayed in this story. The couple chose and understood the elimination period. The Activity of Daily Living (ADL) and Cognitive Impairment triggers are straightforward and very easy to satisfy.

Here are comments about this story I posted online:

“Why does Ms. Santhanam wish to place emphasis on the LTC carrier not offering assistance in the selection of care? The best care is found on local recommendation. This is a trivial complaint. The job of insurance is to pay claims. The reporter does not think it is satisfactory enough that this couple paid $1700/yr x 2 x 4 years = $13600 total in premium and collected $700K? Why was this fact not emphasized instead? This is the true story. Legal intervention to get the policy to pay was most likely unnecessary. If I can re-submit valid claims as a completely non-legal person and always get them paid, this is great business for lawyers. Besides, what is more fun than trashing the big bad insurance company? Just talking with the carrier and finding out what they want has been sufficient in my extensive experience. But at claim time, people are often pressed and panicked, and sometimes the agent is not present, unfortunately. Out of 300+ LTCi claims I’ve seen, not a single valid claim has been denied. We have had to re-submit quite a few. According the AALTCi and other sources, aprox 98% of all LTCi claims get paid. The 2% that don’t are just not valid claims. Insurance companies do not impede claims. On the contrary, most are extremely helpful, but they have rules and it is up to the claimant to find out what they want, then provide it. Please do more responsible reporting. Proper research would cause media to stop casting a bad shadow over LTC insurance. This would help the public greatly. As it stands, a huge number of Baby Boomers use articles like this to deny the genuine, urgent need to plan for LTC, NOW! Instead they spend what should have been their LTC premiums on immediate gratification items. When they need LTC they may be in very tragic circumstances. This is reality. It’s about time mainstream media starts putting the correct slant on this powerful, transformative insurance.”

What’s Different About Family Caregiving Today?

January 13, 2015 by Honey Leveen Leave a Comment

“What’s Different About Family Caregiving Today” is the title of a blog by Lynn Friss Feinberg of AARP.

Ms. Feinberg tells us, “Only 41 percent of people born in 1900 survived to age 65. In sharp contrast, an estimated 84 percent of people born in 2010 will live to age 65 or older. In the past three decades, the population 90 years and older has nearly tripled. The majority of the very old have one or more disabilities and need supportive services. In addition, much care in the past was short term.”

This is the quote I most love: “Although recent research shows that 90 percent of unpaid caregiving for people 65 and older currently is provided by family members, we face a growing care gap. Reliance on families to provide care in the way it was delivered in the past is unsustainable.”

Demographics are shifting. “The share of U.S. adults who have never married is at a historic high. About 1 in 5 (20 percent) adults (25 and older) have never been married, up from 9 percent in 1960. Greater divorce among people 50 and older, and more remarriage (especially among older adults) may also affect patterns of family care in the future.”

Our nation is woefully unprepared for what is sure to be a deluge of people who will need long-term care, and who will be tragically unprepared for this.

The only way to make sure your last months or years are spent with comparable dignity and choice as you have now, is to buy long-term care insurance.

There’ll Be Too Few Millennials and Gen X-ers to Care For Us

January 9, 2015 by Honey Leveen Leave a Comment

In Kimberly Palmer’s article, “Why Caring for Older Adults Is Getting Costlier,” published in U.S. News & World Report, December 17, 2014, we learn that by 2030, Baby Boomers will start turning 85. There will be even more of a torrent of people needing long-term care. Most will be unprepared.

The majority of long-term care (LTC) in Texas and the US is provided by unpaid family members.

The article says the current ratio of family caregivers per every “vulnerable person” is 7 to 1. But soon, because of the aging population, it will be 3 to 1, she says. That will put even more pressure on family caregivers and make it harder for them to continue managing all their other responsibilities.

Here’s another blog I did about “Super-Aging.”

This article is highly educational because it puts the dilemma we will face into very human terms. In this quote, it describes the huge toll being a caregiver takes:

“Robison says her experience caring for her grandmother has made her think about the importance of taking out long-term health care insurance for herself one day, as well as saving for retirement. ‘What we think we need is usually nowhere near the amount we need. … If my grandmother didn’t have a family, where would she be? Who would advocate for her?’ Robison adds that the situation continues to strain her family members, who want to make sure their MeMa is living as well as possible. ‘None of us are trained caregivers. We’re just doing the best we can.’”

My advice is to plan for your long-term care now. Owning reasonably priced long-term care insurance (LTCi) is a great way to do this.

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The Distilled LTCi Facts

For clients who want to dive deeper

Take Care of Your LTCi Before You Take Care of Your Kids

PBS NewsHour misrepresents LTCi

What’s Different About Family Caregiving Today?

There’ll Be Too Few Millennials and Gen X-ers to Care For Us

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