Search Results for: government

The Club Sandwich Generation

June 1, 2016 by Honey Leave a Comment

I want to thank my courageous colleague Rachel Faiga for allowing me to share her story. I do so in admiration and with deep gratitude to her. It is our hope that Rachel’s story will touch and inspire readers to take action and do responsible long-term care planning, now!

The Club Sandwich Generation, by Rachel Faiga

I have always thought that we are not just the sandwich generation, but the “club sandwich” generation. I helped care for my grandmother for 10 years, and my father has had dementia for years. Last May, our lives changed irrevocably. Our 19-year-old daughter Lee had a catastrophic car accident.

Where to begin…

Back in 1990 I became an LTCi specialist. I sort of just fell into this position, taught myself, and now I live it.

My grandmother needed seven-day-a-week, round-the-clock home care, then a nursing home. Thank goodness she owned LTCi. In fact, she was one of my very first clients. When I consulted at the time as to whether a 76 year-old should have inflation protection, the answer was always no. The cost seemed too high. What a way to learn a lesson, I wish she’d had it! I was actively involved in her care. Her LTCi supplemented other funds she had to enable her to stay at home. Otherwise, she would have gone directly to a nursing home. Eventually, her policy’s benefits were exhausted, forcing her to spend her last five years in a nursing home. She needed a total of about 10 years of care. Having the resources to keep her home for those five years helped us all participate in her care and she had some real quality years in her home.

Fortunately, I also sold my father LTCi. Interestingly, he battled me on this and only applied for it after his attorney recommended it. He currently has dementia and it has been progressing for many, many years. He is getting excellent care because of his LTCi policy.

Back to the car accident…

I was actually at the airport going to a seminar when Lee’s friend called me with the news.

That was followed by a call from the Fairfield Police Department telling me it was really bad and I had to get back immediately.

They sent an ambulance to take me all the way from NYC to the hospital in CT, then onto Yale where she was air lifted.

My daughter had a massive brain injury a broken neck, broken ribs and sternum, a broken wrist in two places and a broken pelvis in seven places, which basically meant that her spine was not attached to her pelvis. She was in a coma for a long while.

Doctors know very little about what to expect from her healing. We have been asking for prayers, healing and good thoughts to be sent to her. Lee has made some remarkable progress this past year, but she has a very long way to go and needs full-time care.

Before Lee’s accident, I was a successful LTCi specialist and workaholic. I am just getting back to work, but very part time. My husband now teaches only two classes a week. We are dividing and conquering, as they say. My husband and I took turns in the brain stimulation rehab hospital in New Jersey (the only place that would accept her with how low she was functioning). We arrange Lee’s schedule, while being at home with our 11 year-old, trying to provide her with a semblance of normal life. There isn’t much time to do anything else. Our stress levels are off the charts.

The hardest part to comprehend is that there is no break. Ever. Lee’s sleep patterns are off; she has pain and confusion. Her emotions are very real and very strong. So this is as they all told us, a marathon, but one that does not have a clear end in sight.

I have always been fiercely independent. But now, we are taking help from the government, friends, and acquaintances. I have learned to say “yes” to help.

My advice is to check your car insurance and make sure the uninsured motorist coverage is very, very high. It might say $3 million but it often is $1 million per person! In an accident, if the other person has little or no coverage that is all you have to go on.

Make sure your kids over 18 appoint you as their health care proxy until they are married, so that you don’t have to go for conservatorship to help your child. If your child needs the kind of help Lee does, and you need a conservatorship, you will both need an attorney.

Look at your health insurance. Does it have a provision that says the health insurance company is first in line for any money that you get from the car insurance to repay their expenses? Not all carriers do!

I have always advised friends and clients to buy LTCi for their unmarried kids over 18. Not all carriers sell policies to people this young. My kids started heading off to college, strapping us financially. We didn’t follow this advice, so regretfully, my kids don’t have LTCi. We all want the best for our kids. That does not stop when they turn 18 and need this kind of help. Being able to control choices is so important. In addition, being able to have help, so that you can be there for yourself, your spouse, your other kids and of course, other friends, family and commitments would be amazing.

I cannot stress enough the importance of LTCi coverage. We all think it won’t be us or our loved ones, but take it from me, it happens and it is not always short-term. The fear and shock and pain are so great when a care need occurs. In addition to this, without LTCi, you just don’t have options.

I hope I don’t sound preachy, but unfortunately these are things I learned the hard way.

If you are a licensed agent, insurable and don’t already own LTCi, I encourage you to get it right now. If you don’t know how to write it, seek the advice of a wise and knowledgeable LTCi specialist.

Impurities

February 11, 2016 by Honey Leave a Comment

I am a huge, long-time admirer of Ron Hagelman.

In his February, 2016 Broker World Magazine column titled, “Impurities,” Ron compares the long-term care insurance (LTCi) industry’s evolution to that of classic sculpture. Rodin’s painstakingly slow, thoughtful, methodical, reflective chipping away at a plain block of marble resulted in the timeless magnificence of his sculptures.

Similarly, the LTCi industry has also evolved and reacted over many years with thoughtful, holistic tweaks, adjustments and adaptations to its products.

Ron and I are both very hopeful about today’s LTCi products. We like them, they’re effective, they work. I’ve seen hundreds of claims get paid to my policyholders.

Ron cites the 2014 Society of Actuaries LTC Section study “LTC New Business Pricing: How Safe Is It?” as evidence the LTCi industry has learned from experience. Here’s a blog I did about this study. Today’s LTCi products are priced correctly. Rate hikes on today’s policies should be unusual and not of great consequence.

Here is Ron’s column in its entirety:

The inherent beauty of universally recognized “art” is something that is created as a process of elimination. Michelangelo released David from a solid block of inanimate marble. By methodically chipping away and discarding what was not necessary, something of permanence and exception was revealed. By systematically removing impurities something of transcendent truth may be discovered. The artist involved is actually only a facilitator guided by previous rules of engagement and extensive experience in the pursuit of lasting accomplishment.

Although it may be a stretch to compare the current residue of our grand LTCI experiment to the artistry of Auguste Rodin, it is impossible to ignore our ongoing intention to create something of substance and beauty. Our industry’s dedicated attempt to define and serve a public outcry to diminish the financial and emotional impact of unattended and ill prepared chronic illness risk has certainly represented a historic process of elimination. We have accumulated substantial experience and we have consistently removed the parts that were not working. If it was superfluous, ineffective, overpriced or undersold it has been trimmed away. Our 20-plus year hard headed crusade to expose the reality of the risk and identify a cost effective insurance management tool may be finally beginning to reveal an object of permanence and purpose. Public and private initiatives to reform and improve the market have begun to narrow their focus and solidify around the essentials of future success:

• All the moving parts require attention and some form of structural cooperation between the insurance industry and imbedded governmental support will be required.

• Most claims are fairly small and middle market benefits need to focus on upfront expense and immediate support. By the same token the potential for catastrophic risk must remain at the heart of the individual sale for the more affluent.

• Regulatory reform is now mandatory from the NAIC to state and federal legislatures. This should include greater benefit flexibility and a willingness to consider innovative ideas. Why not allow immediate long term care access to current tax preferred accounts? Additional tax incentives should also include an enhancement review of existing tax deferrals, premium deductions and credits.

Perhaps the clearest evidence of our ability to remove impurities can be found in the recent research conducted by the SOA’s LTC Section and the ILTCI offering LTCI New Business Pricing: How Safe Is It? The primary question asked was to identify any differences between past and current pricing stability. I don’t think anyone would argue with the notion that rate increases are the primary scourge of consumer confidence and lackluster sales. The question is: Have we learned from our marketing mistakes and our growing volume of claims data? The truth is we have learned from experience. We do have more information to fine tune pricing assumptions. We are offering less risky product and the actuaries are using better modeling tools. Rate increases are, of course, the result of the inherent clash of current reality versus the initial assumptions concerning lapse rates, morbidity and mortality. The research team looked at three dates for comparison purposes (2000, 2007 and 2014). Our current volume of claims experience has taught us that our morbidity experience was somewhat worse than anticipated over time. Our mortality rates are now more conservative, and as you well know our lapse rates are now much more conservative. The companies have learned from each other and premiums have stabilized with very little difference today in pricing between carriers. The bottom line is we simply have much more information on which to base future assumptions. For example, we are able to evaluate 16 times as much data in 2014 as in 2000 for all policy years and 70 times as much claims information. The reliability of current pricing as it relates to the possibility of future rate increases has increased dramatically over time. In 2000 the chances of future rate increases was about 40 percent, in 2007 it was 30 percent. However, in 2014 it was only 10 percent. The profitability of the product has also increased—caused by bone on bone lapse assumptions, better understanding of the claim and a low predictable interest rate environment.

We do apparently learn from our mistakes. We can adjust to new realities. We do profit from accumulated sales wisdom. It’s not getting any easier, but it does seem to be emerging from relative chaos into a clear and trustworthy vision sculpted and solidified by experience. We have all accumulated our share of marble dust helping to create a transcendent image void of disfiguring impurities. We may yet gaze upon a sculpture that will withstand the test of time.

Other than that I have no opinion on the subject.

Author’s Bio
Ronald R. Hagelman Jr., CLTC, CSA, LTCP
CLTC, CSA, LTCP, has been a teacher, cattle rancher, agent, brokerage general agent, corporate consultant and home office executive. As a consultant he has created numerous individual and group insurance products. A nationally recognized motivational speaker, Hagelman has served on the LIMRA, Society of Actuaries, and ILTCI committees. He is past president of the American Association for Long Term Care Insurance and continues to work with LTCI company advisory boards. He remains a contributing “friend” of the SOA LTCI Section Council and the SOA Future of LTCI committee. Hagelman is president of Broadtower Insurance Solutions, a national IMO helping BGAs enhance LTCI production. Hagelman can be reached at Broadtower Insurance Solutions, Inc., 156 N. Solms Rd., New Braunfels, TX 78132. Telephone: 830-620-4066. Email: rhagelman@broadtowerinsurancesolutions.com. Website: www.BroadtowerInsurance.com.

Long-Term Care Insurance Can Be Costly but Effective

December 26, 2015 by Honey 1 Comment

Why doesn’t this New York Times article report on what its title promises it will, which is the effectiveness of long-term care insurance (LTCi)?

While being factually correct, this article puts the wrong “spin” on things.

It starts by giving the wrong title. LTCi is not necessarily costly. What can easily be far more costly is needing long-term care for anything but a short length of time and not owning LTCi.

The article “hooks” readers in the first paragraph by describing how LTCi preserves wealth. From there, this article gives readers excuses to avoid responsible LTC planning.

The truth is, the most important reason to own LTCi is not to preserve wealth. It is to preserve family integrity by reducing family resentment, stress and discord. The fact that LTCi also preserves wealth, and does it so well, is “icing on the cake.”

Families and governments are in budgetary crisis due to skyrocketing LTC costs.

Reporters and editors need to get the above perspectives corrected. Reporting needs to be done – now – on the hundreds of thousands of families collecting from LTCi and the radical qualitative difference that LTCi creates in their lives.

Here are some examples of the harmful “spin” I’m talking about:

The article hints that Ms. Cheng’s father is collecting enormous amounts from his LTCi policy, but it is not explicit about this. Why not? Why isn’t any space devoted to describing the extraordinary, qualitative difference LTCi has made not only for Ms. Cheng, but for her father?

Does Ms. Cheng own LTCi herself? Her advice about needing correct professional assistance with choosing LTCi, having a holistic outlook about the role of LTCi in estate planning, and asking children for input and help is sage. The reporter (Mr. Wasik) should have asked her to comment about her own LTCi (if she doesn’t own LTCi, I just don’t understand why not, based on her personal experience and how wise she seems to be).

Instead, Mr. Wasik sidetracks readers with some “red herrings.”

There’s an irrelevant sentence describing how Keith Singer recommends clients with more than $500,000 should own LTCi. (I doubt he has any clients with less than a $500,000 net worth; most financial planners don’t.) This sentence is harmful to readers, giving lower net-worth people one more excuse to dissuade themselves from doing responsible LTC planning. Such people are far more prone to catastrophe resulting from unplanned LTC needs. Here’s a story about a solid middle class couple with a 0,000 net worth that was devastated by unplanned LTC costs. This couple probably could have purchased very reasonable LTCi while they were insurable.

This sentence does not report on the effectiveness of LTCi (as the title purports) and is again potentially harmful to readers : “After a 90-day “elimination” period (often partly covered by Medicare for people whose need for extra care is hastened by a stroke or other medical emergency), the policy covers all assisted living, community and home care.” This perspective is incorrect, and further goads the American public to avoid responsible LTC planning by hinting that Medicare might assist with LTC costs. Medicare-paid LTC is not only paltry and inadequate; most people are not entitled to it.

Shame on Mr. Wasik and the NYT editors, whom I otherwise hold in high esteem. For the sake of the American public, reporting needs to be done now on the extraordinary, qualitative, transformative difference LTCi has and will make for hundreds of thousands of us.

Where’s the Disconnect?

October 23, 2015 by Honey Leveen Leave a Comment

Much of the legacy we leave may be measured by how honestly we’ve dealt with life’s most painful truths. Often, such truths are the most obvious, yet hardest to see clearly.

I’ve seen a few hundred of my nearly 3,000 clients collect from policies I’ve sold them during the past 25+ years. This is just the tip of the iceberg, however; many more will need to collect from their LTCi as time goes on.

For different reasons, when a parent needs LTC, family members who’ve always gotten along well may find themselves at odds with each other. The absence of sufficient, readily available money to swiftly access long-term care (LTC) aggravates an already highly stressful situation.

What makes things so different for them for those who own LTCi is that their LTCi policies pay out significant, meaningful amounts of money when LTC is needed. This is often a huge game changer. LTCi tends to subdue emotional discord. Relationships don’t suffer as much, and outcomes are better. The money people collect from LTCi provides them with dignity, choices, access, and options they would not have otherwise had.

Sadly, most of us still do not own LTCi. Sadder still, it is too often well-educated people with good incomes and a whole lot to lose who choose to be unprepared for LTC.

Such people come up with what they think are fabulous excuses avoid discussing what might happen to them at the end of their lives. There seems to be a disconnect between our intellect and our emotions when it comes to LTC planning.

According to www.longtermcare.gov and other reputable sources, at age 65, there’s a 70% chance of needing LTC. These odds go up with each year we age. Visit Genworth’s Cost of Care Calculator to see just how expensive LTC is in your locale.

Most LTC in the US is provided on an unpaid basis, disproportionately by women, who often have to sacrifice their careers, savings, and relationships to provide care. LTC already costs American families dearly, yet the worst of this crisis is yet to come.

As former First Lady Rosalynn Carter said, “There are only four kinds of people in this world: those who have been caregivers, those who are caregivers, those who will be caregivers, and those who will need caregivers.”

Major Misconceptions About LTC and LTCi

Here are some simple responses to major misconceptions about LTC and LTCi. More complex answers are found on the Resources or LTCi FAQ pages of this site, or by calling me, at no obligation:

LTCi is too expensive. Not true. What may be expensive is needing LTC for anything but a short time and not owning LTCi. Policyholders usually collect back all premiums they’ve paid over the life of their policy in a few short months. Premiums are customized for each person and can be made to fit into almost anyone’s budget.
The government pays for LTC. The type of LTC the government pays for is not what you would freely choose.
Medicare covers LTC. No it doesn’t! Medicare covers acute medical problems and a restrictive, conditional amount of home or in-patient rehabilitative care that most people don’t qualify for.*
The LTCi industry is threatened. It’s true that the number of carriers selling LTCi has shrunk; there are valid reasons. Policyholders are not in danger. LTCi carriers remain staunchly committed to the market. They realize the LTC crisis and oncoming Senior Tsunami isn’t going away any time soon, and are in it for the long run.
LTCi only pays for nursing homes. The opposite is true. The great majority of LTCi policies pay comprehensively, for care at home, in adult day care, assisted living, and nursing homes. They enable you to increase the odds you will not need LTC provided in a nursing home.

Here are some of many silly excuses smart people give me to avoid conversing about LTCi while they’re healthy and can find reasonable premiums:

My wife will take care of me. Really? Your wife will be eager and physically capable of helping you bathe and dress, for example? You don’t mind the thought of her last memories being about the physical, emotional and financial burdens of caring for you?

That won’t happen to me. Really?

My kids will take care of me. Really?

I’ll kill myself.

I can’t afford LTCi. Many people claim LTCi is too expensive, despite the fact that we tailor LTCi premiums to fit into most people’s budgets. Situations like this one happen frequently: an acquaintance tells me she can’t afford LTCi premiums. This person’s mother needed LTC for an extended length of time, at great sacrifice to the family. A week later this person announces she is making a two week trip to Mt. Everest Base Camp/African photo safari/Tahiti or another exotic locale, or is buying a top-of-the-line car/kayak/audio equipment, etc. She has the money to do that but can’t afford LTC premiums. Where’s the disconnect?

Here’s another common scenario: I get incoming calls with Caller ID stating: “METHODIST HOSP RE-HAB”. The caller is the daughter or son of someone who’s just broken their hip or suffered a stroke. They ask me to come sell their parent LTCi. I have the unpleasant task of trying to tactfully explain that their parent is uninsurable. Sometimes the child is incensed by this news. I suggest the child is of ideal age to find reasonably priced LTCi for themselves; this might be a wise idea if they want to assure a similar scenario doesn’t play out when at the end of their lives. The child is normally not interested. The reason is that the family is in the worst kind of turmoil, duress, and dysfunction. They are scurrying around trying to cobble together LTC for their parent, and there isn’t sufficient, readily accessible money to pay for it. This is the scenario Dayna and I urge you to avoid by doing reasonable, responsible LTC planning, now.

What all of my LTCi clients have in common, regardless of their incomes, is the ability to honestly, openly discuss LTC in advance. Most of my clients have had firsthand experiences caring for someone who needed LTC. They’ve learned from them, and taken action to avoid the consequences of not being prepared for their own long-term care.

Complicated LTC Financing Made Easy

August 27, 2015 by Honey Leveen Leave a Comment

I believe the comments below, republished with permission from the Center for Long-Term Care Reform, are useful for the public. They explain why long-term care insurance (LTCi) is good not only for people, but also for America.

Here is a simple, concise overview of the the complicated principles of long-term care financing in the US:

LTC Comment: Let’s begin with a few facts:

Medicaid pays for most formal long-term care whether in nursing homes or home care.
Medicaid is a counter-cyclical welfare program. It ramps up caseloads and expenditures, usually with extra help from the federal government, during recessions.
The United States has experienced two major recessions in the 21st century, the Great Recession of 2007-2009 being the worst since the Depression.
To combat recessions, the federal government employs deficit spending (as when it borrows to boost Medicaid assistance). This is called “fiscal policy.”
Deficit spending (fiscal policy) has created a huge national debt, currently nearing $18.4 trillion according to the US Debt Clock.
To combat recessions, the Federal Reserve cuts interest rates and increases the money supply. This is called “monetary policy.”
Artificially low interest rates have discouraged savings, impaired the market for LTC insurance by reducing its profitability and increasing its cost, and diverted capital away from economically productive investments and into “bubbles” of real estate, stocks and bonds, benefiting mostly the affluent.
The same monetary policies have hurt the poor and middle class by stifling job creation, repressing wage growth, and practically eliminating income on savings.
Low interest rates and a bloated money supply (monetary policy) have failed to revive the U.S. economy fully after the Great Recession, making the Fed very reluctant to allow interest rates to increase.
We find ourselves on the cusp of an unprecedented “Age Wave.” The huge baby-boomer population cohort does not reach the age of heaviest LTC need (85+) until 2031.
Social Security and Medicare run out of “trust funds” in the 2030s, but in the meantime the federal government has to make up these gargantuan entitlement programs’ annual revenue shortfalls and pay off their trust funds’ IOUs with interest out of general funds (taxes and borrowing).
America’s fiscal and monetary tools are worn out. We have too much debt to borrow more safely if interest rates increase and too much money supply to print more.
Our artificially suppressed interest rates are too low to be lowered further in order to combat the next recession.
In a nutshell, the U.S. economy may not be able to generate the revenue needed to support our long-term care safety net in the short-run and definitely cannot over the long-term without major changes in fiscal and monetary policies.
Ironically, this state of affairs benefits the elite at the expense of the needy for whom the elite hypocritically profess noblesse oblige.

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Search Results for: government

The Club Sandwich Generation

The Club Sandwich Generation, by Rachel Faiga

Impurities

Long-Term Care Insurance Can Be Costly but Effective

Where’s the Disconnect?

Major Misconceptions About LTC and LTCi

Complicated LTC Financing Made Easy

From My Blog

Podcast Illuminates LTC Need

LTCI is Magical at Time of Need!

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