Monday, April 30, 2012

How do the new long-term care partnership plans differ from other Long Term Care insurance plans?

About 30 states have adopted Long-Term Care Insurance Partnership plans and others will undoubted do so. We will post a fuller explanation of the significant benefits these plans offer. But they are basically the same long-term care insurance policy ... just "New and Improved" with a very special added benefit; the State-provided additional asset protection feature. We'll post more on this Website shortly.

Monday, April 23, 2012

Useful Tips

Useful Tips:

Long-term care planning must be personal. There is no one right way to plan for long-term care. Evaluate your options with a critical eye. Long-term care is not just a financial risk but is also an emotional issue that touches deeply held values. Become educated about long-term care. Talk to friends and family about their experiences as caregivers and the different ways they paid for services. Ask questions if you're confused. Don’t sign anything until you have an answer to all your questions. Aside from research, the most important safety tool is simple common sense. Don’t allow yourself to be pressured and don’t rush into anything. Work with experienced advisors that you trust. There is a lot of help available through consumer organizations, books you can read, and websites with detailed information. Let someone else do the hard work. Do not hesitate to seek professional help for legal, tax, and insurance issues. Professionals with years of experience are experts who know the latest information and can help you with the details. Work with a certified LTC insurance specialist to customize a policy to fit your budget and needs. IT’S NEVER TO EARLY – OR TOO LATE - TO PLAN FOR LONG TERM CARE. With any plan, the most important thing is to get started. It may be challenging, but the sooner you start, the more options you have

Monday, April 16, 2012

Long Term Care Insurance Rate Hikes Explained By Industry Leader

Costs for long term care insurance in 2012 have risen compared to the prior year and several insurers have filed for rate increases raising concern among consumers and consumer groups.

“No one likes to pay more so concern is understandable,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, an industry trade group representing several thousand specialists who market long term care insurance. “But there is quite a bit of misinformation surrounding what’s taking place.”

To address the issue, the industry executive has been speaking with reporters, consumer representatives and making available association staff to discuss the matter with consumers. Slome appeared on Martha Stewart’s radio network to explain what’s taking place.

“Historic low interest rates are the primary culprit and the Federal Reserve has indicated it plans to keep rates this low for the foreseeable future,” Slome notes. For every one-half percent drop in interest rates, a long-term care insurance company needs a 15 percent premium hike to build up the needed capital to pay future anticipated claims.

Regarding the need for rate increases on existing long term care insurance policies, Slome explains it is never a take it or leave it proposition for the consumer. Insurers always offer an option by which the policyholder can continue to pay the same amount.

The Association executive points to a recent request for rate hike from a leading insurer. Policies affected are those offering a five percent automatic compound or simple inflation coverage, where benefits automatically increase by five percent each year for the life of the policy. “The company offers an option to reduce their future inflation percentage which allows people to avoid the rate increase altogether,” Slome says.

This is a prospective reduction in inflation; so all inflation additions previously applied to the policy will remain in place. “There is no reduction of their current benefit level,” Slome points out. “Only future inflation increases would be at a rate lower and the new inflation percentage offered as an option to customers will be in the range of 2.7% to 3.9%.”

Slome advises consumers with long term care insurance policies to speak with their agent regarding their concerns. “The protection is still incredibly important for people to have and valuable to those who need it,” Slome one of the nation’s long term care insurance expert points out. “Last year, insurers paid over $6 billion in benefits to some 200,000 individuals who own long term care insurance. The largest open claim has surpassed $1.5 million and the policyholder paid less than $2,500 for their protection.” Some eight million Americans currently have some form long term care insurance protection.

Monday, April 9, 2012

Small Business Owners Unaware of Long-Term Care Tax Deductions

The majority of small and mid-sized business owners are not familiar with the tax deductible benefits available when offering long-term care insurance plan to employees. According to one insurance company executive, tax-deductible long-term care insurance remains the best-kept secret and employers are missing out on billions of dollars of potential tax savings.

Federal and a growing number of states now offer tax deductions and tax credits for the purchase of long-term care insurance. The cost of coverage may be fully tax deductible to the business and a great deal of flexibility can be offered when initiating a plan. In addition, corporate pricing breaks of 5 percent to 10 percent, in addition to substantial spousal or couples discounts, are the norm.

According to the 2009 edition of A Business Owner’s Guide To Long-Term Care Insurance, any form of business ownership can enjoy deductions for a long-term care insurance premium. Benefits received are, as a rule, always tax-free. Premiums might be considered imputed income to an employee depending on how the company is held.

Insurers offer various forms of long-term care insurance plans designed specifically to meet the needs of either small or large employers. Policies can be personally owned but company-paid, thus staying with the insured after he or she leaves a company or retires.

Long-term care insurance offers great design flexibility for employers. For example, employers can pick and choose who participates in a plan. Properly done, there are no ERISA issues, unlike group health insurance, according to tax experts. These plans are often called “carve-outs” which allow employers to be “selective” when determining who would be covered under a long-term care insurance benefit.

Policy design provisions enable employers to pay premiums for fixed periods of time, at which point the policy is paid up for life. One of the significant benefits is that policy benefit amounts keep increasing under inflation protection options with no risk of future long-term care insurance rate hikes.

According to American Association for Long Term Care Insurance experts, policies available to employers may allow two spouses to share one benefit pool. This has the potential to double the benefit any single insured might have and eliminates much of the problem as it pertains to the benefit period chosen. At the death of one spouse, the other typically inherits the other remaining benefits free of charge.

Monday, April 2, 2012

Make me smarter! Are there secrets worth sharing before I meet with an agent?

Each insurance carrier has one or more "sweet spots" generally based on which ages and health conditions they believe are most desirable based on their experience or future expectations. Some offer advantageous discounts for couples buying together. Others will offer a discount even when only one buys. Fortunately, most knowledgeable long-term care insurance professionals have access to policies from multiple insurers and can show you an apples-to-apples comparison without you having to be a NASA scientist (with all respect to those NASA scientists and engineers reading this!). The savings to you could be significant.