income inequity Archives - Long Term Care Insurance Expert | Honey Leveen

Sign that I’m Getting Old: I See Actual Evidence of Income Inequality

February 6, 2014 by Honey Leveen Leave a Comment

In my prior blog, www./2014/income-inequality-is-here, I gave irrefutable proof that income inequality is here. Due to the human tendency to deny facts that are unpleasant, it is often difficult for even smart, educated people to acknowledge this.

The email below comes from an informed prospective client who works in the long-term care industry. Every day she sees families in crisis, largely because their loved one does not own long-term care insurance (LTCi). She believes LTCi is the only solution for middle-class people who want to secure their dignity and options, should the probable need for long-term care arise. She sought my help upon the strong recommendation of her friend. We had a good rapport, and I showed her reasonable LTCi premiums. At the point of placing her LTCi application, she froze in fear, like a deer in headlights :

“Honey – Just wanted to touch base with you. I want to be respectful of your time. My week became crazy at work. Things went haywire with individuals quitting and getting laid off. I am going to hold up on my long term care insurance. I will pay the increase when I get the insurance. I may be getting laid off. I will know some time in Feb. I do not want to take on added expense until I know something. Thank you kindness and patience with me. ~ Tracy“

When I began selling LTCi 23 years ago, I did not get many objections like the one above. True enough, there was horrid, incorrect, sometimes scathing media coverage of LTCi in those days. This is not as true nowadays. People were also convinced Medicare would pay for their long-term care or that their kids would care for them. Thankfully, both of these myths have been largely dispelled.

Now we have income inequality replacing the obstacles described above and throwing a wrench into what I believe would be an otherwise thriving LTCi industry.

This is sad to me. With the presence of income inequality, there is a stronger than ever need for LTCi ownership.

Income Inequality Is Here

February 5, 2014 by Honey Leveen Leave a Comment

For years, the press has done faulty reporting on long-term care insurance (LTCi) and the public has been in deep denial of the need for it. Now we have a new enemy of responsible long-term care planning: income inequality.

A story in the February 3, 2104 New York Times titled, “The Middle Class is Steadily Eroding. Just ask the Business World” caught my eye. It also confirms my observations.

The article says there is no doubt our middle class is eroding, in a pretty dramatic way.

“In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995. About 90 percent of the overall increase in inflation-adjusted income was generated by the top 20 percent of households in terms of income.”

“Investors have taken notice of the shrinking middle. Shares of Sears and J. C. Penney have fallen more than 50 percent since the end of 2009, even as upper-end stores like Nordstrom and bargain-basement chains like Dollar Tree and Family Dollar Stores have more than doubled in value over the same period.”

“Foot traffic at midtier, casual dining properties like Red Lobster and Olive Garden has dropped in every quarter but one since 2005, according to John Glass, a restaurant industry analyst at Morgan Stanley.”

“With diners paying an average tab of $16.50 a person at Olive Garden, Mr. Glass said, “The customers are middle class. They’re not rich. They’re not poor.” With income growth stagnant and prices for necessities like health care and education on the rise, he said, “They are cutting back.” On the other hand, at the Capital Grille, an upscale Darden chain where the average check per person is about $71, spending is up by an average of 5 percent annually over the last three years.”

Click here for another blog I did about income inequality.

Where am I going with this? Why am I reporting on this in a long-term care insurance blog?

Rationally, when finances are tight, insurance is actually more necessary than ever. Yet soaring income inequality evokes fear. When fear strikes, people panic. Business logic is inhibited.

I commonly see people who are suffering the effects of income inequality continue to spend money. It’s usually on “stuff”. A good many people can still afford long-term care insurance (LTCi) because we can get LTCi premiums to be very reasonable. But seeing their costs go up, their incomes remain flat and their jobs in possible jeopardy impedes people from doing the only sane, considerate, dignified thing, which is to buy reasonably priced long-term care insurance.

A Single Top Income Could Buy Housing for Every Homeless Person in the US

November 8, 2013 by Honey Leveen Leave a Comment

Jim and I just saw a disturbing /engrossing/very important film called “Inequity for All”. I encourage everyone to see this film! It had a huge effect on me. It takes complex, abstract economic concepts, adds humor and the human element, and makes these concepts very approachable and easy to understand.

From the film’s site:

In 1983 the poorest 47% of America had $15,000 per family, 2.5 percent of the nation’s wealth.
In 2009 the poorest 47% of America owned ZERO PERCENT of the nation’s wealth (their debt exceeded their assets).
At the other extreme, the 400 wealthiest Americans own as much wealth as 80 million families – 62% of America. The reason, once again, is the stock market. Since 1980 the American GDP has approximately doubled. Inflation-adjusted wages have gone down. But the stock market has increased by over ten times, and the richest quintile of Americans owns 93% of it.

How does income inequity pertain to responsible long-term care (LTC) planning?

When I began my long-term care insurance career in 1989, sales of long-term care insurance (LTCi) nationwide were slow. The biggest battle I fought was people’s ignorance, not fear. In those days, people insisted the government would pay for their long-term care, their kids would take care of them, or they would never need long-term care. The media, too, were very ill-informed. Most media coverage disparaged LTCi at every opportunity, and called it a non-essential rip-off. Even the insurance industry considered LTCi to be its illegitimate step-child in those days.

In 2013, the above issues have pretty much been dismissed. Studies today prove the majority of people now admit they might need LTC, and that they are financially unprepared to pay for it.

Interestingly, LTCi sales still languish

In today’s world, the ever-present stress of job insecurity, having to stay in a job you hate, toxic co-workers, working in order to have medical insurance, longer hours, job cutbacks, stagnant wages, higher tuition, overhead, and debts, with no visible way out of such predicaments, is common. Many are understandably scared.

When people live with these types of fears, they often suffer from emotional, irrational inertia and the inability to act affirmatively. We LTCi specialists can show them $50/month premiums they can easily afford. They might have nursed their own mother for years, at considerable physical and economic loss, yet they are paralyzed with fear and do not purchase reasonably priced LTCi. They cannot act.

Inequity for All describes the vicious cycles that result from income inequity. Slow LTCi sales, despite the fact that most now understand LTCi ownership is the only rational solution to big problems many of us will face, is one more dangerous by-product of this nation’s mounting income inequity.

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Sign that I’m Getting Old: I See Actual Evidence of Income Inequality

Income Inequality Is Here

A Single Top Income Could Buy Housing for Every Homeless Person in the US

How does income inequity pertain to responsible long-term care (LTC) planning?

Interestingly, LTCi sales still languish

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