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Proof that Millionaires Need Long-Term Care Insurance

June 12, 2015 by Honey Leveen Leave a Comment

A recent New York Times article titled “Millionaires Who Are Frugal When They Don’t Have to Be” resonated with me. It describes the spending habits of many multi-millionaires and sheds light on why people of high net worth should definitely own long-term care insurance (LTCi).

The article confirms what I have seen over and over again during my 25-year career when very affluent people need long-term care.

From the article: “There were common threads in this group. These were people who had all made the money in their own lifetimes and done that as much by saving, investing and making careful choices about spending as by making large salaries.”

Such people create their own wealth and happiness step by step, painstakingly, responsibly, day-by-day. It’s hard! Money is happiness and security. They do not like spending it. Each dollar still has great meaning, even when you have more than enough money to buy just about anything you want, with no concern.

For many years in my practice, most of the time, people who can well afford to self-insure (pay all of their expenses themselves) for long-term care, choose not to!

I see this over and over again and have testimonials from very affluent clients admitting they would not be availing themselves of home care or assisted living were it not for their LTCi.

I have testimonials from children of affluent clients admitting their lives are much different, they are not bound and shackled into caregiving roles, because their parent owned and collected from their LTCi (check this site’s Testimonials page).

I see personal friends who had the opportunity to buy LTCi but did not when they were able to. I know they have the resources to pay for long-term care, but instead, the healthier spouse and/or kids are their caregivers. This outcome is stressful, regrettable, avoidable and undignified!

Long-Term Care Insurance Has a Bright Future

April 17, 2015 by Honey Leveen 2 Comments

I recently returned from a national long-term care insurance conference.

I noted the mood at this year’s conference seemed a lot less pessimistic about the long-term care insurance (LTCi) industry than it was last year.

In 2014 we saw continued poor press coverage of LTCi. Media gave mostly inadequate, usually negatively slanted, and sometimes incorrect explanations of LTCi rate hikes, with little advice on constructive ways to ameliorate them. New sales of traditional LTCi decreased. We saw higher premiums, tighter underwriting, and LTCi carrier withdrawals. 2014 was the worst year I can remember for LTCi in my 25 year-long career.

In short, the LTCi market just couldn’t get any worse than it was in 2014.

At the conference I learned that there were more legitimate reasons than my senses alone, to be hopeful about the future of LTCi. While my observations are based on anecdotal experience, it was very reassuring to learn that actuaries agree with what I think most full-time LTCi marketers observe.

Here is why there’s cause for optimism about LTCi:

The problem of who will provide LTC and how to pay for it is not going away. In fact, it’s like a freight train coming at us.

The LTCi market is now expanding, no longer contracting; two new LTCi carriers are in the process of entering the LTCi market.

In the news you will now find plenty of stories advising people that Medicare cannot and will not pay for LTC. You will also find articles about looming budget shortfalls and cutbacks. You will find stories graphically describing the sacrifices families make to provide care for loved ones who don’t own LTCi. You will find stories about our rapidly aging population, lack of caregivers, and impending Alzheimer’s epidemic. After all these years, most journalists still have scant understanding of how LTCi works; LTCi is seldom mentioned in news stories and still doesn’t get the accolades it deserves. But all other indications look good for the future of LTCi.

In his general session presentation at the ILTCI Conference, Roger Loomis, an actuary with ARC (Actuarial Resources Corporation) explained why I believe my suspicions about LTCi’s brighter future are correct. Mr. Loomis’s presentation was about the actuarial outlook on the stability of current LTCi rates. He made several key points. Higher LTCi prices are obviously more stable. The industry has now had time to learn and benefit from its experience. The LTCi industry has more data to support pricing assumptions, less risky product designs are being offered, skill at managing LTCi is better now, and there are better modeling tools. Mr. Loomis used reporting from seven large insurers who have been in the LTCi market continuously for at least 15 years to back up his statements. He concluded that LTCi presently sold has a relatively low (approximately 12%) probability of a rate increase, due to near rock-bottom lapse and interest rate assumptions, plus other factors.

Anyone wanting the slides from Roger Loomis’s presentation should email me at honey@honeyleveen.com.

Expect an Alzheimer’s Epidemic

April 2, 2015 by Honey Leveen Leave a Comment

2015 Alzheimer’s Disease Facts and Figures were just released.

Between 2000 and 2013, the incidence of heart attacks, cancer, and other diseases fell, while the incidence of AD increased by 71%!

Prepare for the Alzheimer’s Disease (AD) epidemic. It’s coming.

In 2014, friends and family of people with Alzheimer’s and other dementias provided an estimated 17.9 billion hours of unpaid care, a contribution to the nation valued at $217.7 billion. This is approximately 46 percent of the net value of Walmart sales in 2013 and nearly eight times the total revenue of McDonald’s in 2013.

Approximately two-thirds of caregivers are women and 34 percent are age 65 or older.
Forty-one percent of caregivers have a household income of $50,000 or less.
Over half of primary caregivers of people with dementia take care of parents.
It is estimated that 250,000 children and young adults between ages 8 and 18 provide help to someone with Alzheimer’s disease or another dementia.

Alzheimer’s takes a devastating toll on caregivers. Nearly 60 percent of Alzheimer’s and dementia caregivers rate the emotional stress of caregiving as high or very high; about 40 percent suffer from depression. Due to the physical and emotional toll of caregiving, Alzheimer’s and dementia caregivers had $9.7 billion in additional health care costs of their own in 2014.

If you want to read an article that makes the physical and emotional costs of caregiving real, read “Caring for Alzheimer’s: How Three Families Cope” from this week’s Wall Street Journal.

My advice for middle- and upper middle-class Americans is to prepare now, with long-term care insurance (LTCi), while you can qualify and find reasonable rates.

You Are Not Alone

March 15, 2015 by Honey Leveen Leave a Comment

Visit www.caregiver.com for comprehensive information on all aspects of long-term care, including a free newsletter, magazine, care tips, local resources, and more.

This link will provide you with all articles pertaining to long-term care.

Here’s an interview with celebrity Amy Grant, that’s part of www.caregiver.com. Ms. Grant states the need to discuss long-term care with parents is the “elephant in the room”. She also mentions that her parents own long-term care insurance, something that I am certain is helping to make her family’s difficult journey a whole lot easier.

The thing I like most about www.caregiver.com is the fact it lets caregivers know they are not as isolated as they think they are.

One Article Says It All

February 27, 2015 by Honey Leveen Leave a Comment

This February 16, 2015 Chicago Tribune article succinctly hits all the reasons why it is in every insurable, non-poverty stricken Americans best interest to plan for possibly needing long-term care.

Here are some quotes from the article that I especially like.

“While baby boomers had the opportunity to plan for aging, many also had that generation’s impulse for immediate gratification and haven’t saved,” says Lucia West Jones, executive director for the nonprofit Northeastern Illinois Area Agency on Aging.

The numbers back up her concerns.

According to an AARP survey of people 50 or older, 62 percent of workers say they are saving for health-care costs, but 55 percent are worried they may not be able to afford those expenses.

Information from the AARP also states the average 65-year-old couple will need $220,000 for 20 years of post-retirement health-care costs, with Medicare possibly covering little more than half those years.

The U.S. Department of Health and Human Services’ Administration on Aging claims at least 70 percent of people who live to 65 or older will need long-term care services and support at some point when they are elderly.

In the Chicago area, according to a 2014 study from insurance holding company, Genworth Financial, annual costs for full-time home care aides or services are more than $49,000; for adult day care, almost $20,000 per year; almost $60,000 per year for an assisted living facility; and a semi-private room in a nursing home averages more than $80,000; with a private room more than $92,000.”

(For accurate long-term care costs in your locale, click here for Genworth’s Cost of Care Survey.)

Last but not least, I like the article’s acknowledgement that long-term care insurance (LTCi) kept Ms. Fleming’s mother off of Medicaid. She had higher quality care and her family had a less stressful experience because she owned LTCi:

“LTCi kept them off Medicaid. Even with the long-term care policy, Fleming said she spent months sifting through her mother’s health insurance and Medicare paperwork, providing documentation to the insurer to secure benefits covering her mother’s expenses. No Medicaid was needed to pay for her mother’s care.”

As I’ve said so many times, it is very unfortunate that acknowledgement of long-term care insurance (LTCi) ownership is usually done grudgingly, as an “oh, by the way” mention, hidden deep within the content of stories like this.

Why did this story emphasize that Ms. Fleming needed months to provide adequate documentation in order to collect from Mom’s LTCi? Of course, all claims require proof of need. But the story doesn’t give us any idea of what took so long to provide. Claims on LTCi are straightforward and not complicated and certainly do not require a great deal of time to complete.

If anyone has questions about how straightforward LTCi claims are, please contact me. LTCi claims are black and white. They are unambiguous.

Why did the author of this article not choose to emphasize the truth? The main point is that substantial amounts of money were collected from Mom’s LTCi: enough money to keep Mom off Medicaid and out of a nursing home.

Request a Free, No-Obligation LTCi Quote

Proof that Millionaires Need Long-Term Care Insurance

Long-Term Care Insurance Has a Bright Future

Expect an Alzheimer’s Epidemic

You Are Not Alone

One Article Says It All

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