Study Highlights Need For Increased Long Term Care Insurance Planning

A just-released national study reveals the enormous toll impacting the overwhelming majority of adults who are caring for an aging parent or spouse.

“Unpaid caregivers provide $450 billion worth of care every year to someone who is ill, disabled or aged,” declares Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the national long term care insurance industry trade group.

“Caregiving for a family member today is almost a requirement unless you have the savings or assets to pay for outside help,” Slome explained.  “People wrongly believe that Medicare pays for the type of care which is called long-term care but the reality is that Medicare pays very little of the cost and Medicaid is a severely impacted welfare program for the poor.”

The national long term care insurance expert pointed to a just published study ‘Retirement Care Planning The Middle Income Boomer Perspective” that surveyed adult caregivers between the ages of 49 and 67 with household incomes of between $25,000 and $75,000.   The study found that caregiving cost more than expected, impacted their existing relationships and took a more physical toll than previously thought.

“The reality today is that more Americans will live into their 90s and 100s than ever before and very few have any plan in place for living to 100,” Slome declared.  “We call today for heightened education and awareness as an important first step to addressing the problem that is facing millions of families.  Without a solution, families will pay the heaviest price as will taxpayers who will be expected to foot the bill for the neediest who require care.”

“People need to understand that there are only three options when care is needed,” Slome adds.  “Turn family members into caregivers, pay for outside care from your savings or convert assets, or have some long term care insurance to pick up some of the costs.”  The executive noted that insurance is only a viable option for those who can health qualify for coverage.

“Insurance companies need to keep long term care insurance costs as low as possible so they only will offer coverage to those who are in relatively good health when they apply,” Slome explains.  “We hate having to tell people with health issues or those who wait until their 70s or 80s that insurance is probably not an option for them.”

Comparing Asset Based Long Term Care Insurance Options Is Vital

Consumers considering asset based long term care insurance options or life insurance with long term care benefits do not understand the significant differences reports one of the nation’s leading experts.

“The differences can amount to tens and even hundreds of thousands of dollars of future benefits,” declares Jesse Slome, executive director of the American Association for Long Term Care Insurance.  “People wrongly assume these policies are virtually identical when nothing could be further from the truth.”

While asset based long term care insurance products offering a combination of life insurance and long term care benefits have been around for many years, numerous new policies have been or are being introduced Slome acknowledges.  “Roughly 90,000 of these asset based LTC policies were sold in 2012,” Slome reports.  That compares to roughly 330,000 traditional long term care insurance policies.

Slome shared ways to judge if comparing policies is worthwhile.  “If you are married and plan to buy policies for both husband and wife, there can be considerable differences in the future benefit amount from one insurer to the next,” Slome shared.  “Many of these policies today are marketed by financial professionals who only offer one or two policies and are not as familiar with the important differences.”

Future guarantees can vary among different asset based LTC products Slome notes.  “In future years you don’t want to find out that what you thought was guaranteed isn’t,” Slome says.   “All of these small but very important factors make it increasingly important to compare because you only purchase these policies one time.”

Association Addresses Long Term Care Insurance Fallacious Facts

A significant number of news and online reports addressing long term care insurance reference fallacious information that does not serve consumers or the industry says the director of the American Association for Long-Term Care Insurance.

“It is important for consumers to understand the importance of their need to address the very real risk of needing long term care but misleading or deceptive information is in no one’s best interest,” declares Jesse Slome, executive director of the national long term care insurance industry trade group.  Slome was sharing insights with professionals who market long term care insurance.

“I keep a rogues’ gallery of misleading information that repeatedly appears in news articles,” Slome shared with the group.   ”They may all be true but often they have zero relevance to long term care insurance and linking the two together is not appropriate way to appropriately educate the public.”  Slome shared three fallacious facts:

“It’s common to read that 40 percent of those needing long term care are under age 65,” Slome says.  “This is a government statistic which includes everyone born with birth defects and severe disabilities, mental issues and other issues.  There is no relevance to long-term care insurance which requires applicants must health qualify for insurance coverage.”

“People start buying long term care insurance in their 50s to address the real risks of needing care as a result of aging, dementia or conditions that generally start after age 70,” Slome explained.  “Of course, accidents and disabling diseases can begin at younger ages but not to the degree the 40 percent statistic implies.”

“A second fallacy is that one needs to protect the full cost of care by showing large scary numbers,” Slome says.  “You see reports that say three years in a nursing home will cost $200,000 and that may be true but most people buy long term care insurance to receive care at home.  Those costs can be far more affordable and every article neglects to mention you should use some of your savings to pay some of the costs.”

According to the long term care insurance expert, over two-thirds of new claims begin with home care.  “You’re likely to receive ‘wake up – tuck in’ services for a few hours which can be fully covered by a modest long term care insurance policy,” Slome adds.  “And, don’t overlook retirement income including Social Security which can be used to pay some of the cost augmented by your insurance.”

Slome noted that many articles overstate the cost of long term care insurance.  “Reporters tend to talk to the same small group of experts, often those who have wealthy clientele or they quote industry averages which mislead many into thinking coverage is expensive,” Slome concluded.  “It can be if you are older, if you have health conditions or if you buy a Cadillac policy.  But it does not have to be and half of all buyers pay less than the average, some significantly less.”

Working with an experienced long term care insurance professional is advantageous because both costs and policy provisions vary significantly.  “We define a specialist as someone who has helped 100 or more people get long term care insurance,” Slome explained.  “A consumer can pick who they work with but those we speak with share that specialists provide them with far greater information relevant to their situation and typically better choices for options.”