LTCi Policyholders More Likely than Uninsured to Receive Care at Home

Individuals who mistakenly believe LTCi is nursing home insurance may see the light after they see new figures on home health care. Statistics from a recent study indicate people who own LTCi receive significantly more home care and can stay in their homes longer than those who are uninsured.

Read "New Study Reports Three Times More People Receiving Health Care Support at Home Rather Than in Nursing Homes or Assisted-Living Facilities" by clicking here.

Long-Term Care Insurance Is Not Expensive

One of the great misperceptions about long-term care insurance is that it's expensive. One argument goes, "it's expensive because I could pay for something I never use."

Would you say the same thing about your homeowner's insurance? "It's a waste if my house never burns down." Or your car insurance? "I'd better total that car so I get my premiums back." Of course you wouldn't make either of these statements. That's because you know that every day many people have bad car accidents and every day house fires happen. You count yourself quite lucky when they don't happen to you.

The same is true for long-term care insurance. Every day many people submit a claim on their long-term care insurance policy. According to the American Association for Long-Term Care Insurance some 180,000 individuals are receiving benefits from their insurance coverage yearly. Some $8.5 billion is paid out annually.

Long-term care insurance is incredibly valuable protection to have should you need it. Consider yourself lucky if you live a long life and never need long-term care.

For those who are still not convinced, I'd like to share two real examples of individuals who purchased long-term care insurance. These are real people with the information provided to the Association by the nation's leading insurance companies at the beginning of 2009.

COMPANY A: Largest open claim: $1.2 million.
The individual (a woman) purchased long-term care insurance at age 43, paying an annual premium of $1,800. Three years later her claim began and has continued for almost 12 years ($1.2 million in benefits already paid).

COMPANY B: Largest open claim: $1.02 million.
The individual (also a woman) purchased long-term care insurance at age 72 paying an annual premium of $12,766. Three years later her claim began and has continued for almost 9 years ($1.02 million is benefits already paid) for her nursing home care.

Individuals between the ages of 55 and 59 paid between $700 and $6,950 for long-term care insurance according to a new report from the trade organization. People are taking advantage of readily available discounts to and policy design techniques to reduce the cost of coverage. You can too.

The cost for long-term care insurance coverage is based on a variety of factors. Some you have no control over such as your age and current health when you apply. Others are choices that can significantly impact what you pay. Understanding how to take advantage of applicable discounts and saving techniques can reduce the cost by 20-to-50 percent yearly.

Spouses as well as partners residing together can take advantage of the most significant discount available today when both parties purchase coverage. The discount can be as much as 40 percent applied to both policies. A number of insurers will even offer the discount when only one individual purchases coverage or can health qualify.


If you would like a no-obligation cost quote for long-term care insurance, please contact me by calling 239-280-3246 or E-mail me by clicking here. I can help make this important protection more affordable than you might think.

Get The Best Quote For Long Term Care Insurance: Part 1

Once you have made a decision to look into a long-term care insurance plan, the next step is to identify the various insurance players in the market and compare their rates.

If you are offered long term health care coverage at your place of work, it could be wise to compare costs and coverage with plans available on the individual market. You could find better coverage for less cost. Or, you might find the employer plan is the smarter way to go. It's always a smart move to compare.

To compare costs and coverage you must request quotes from an insurance agent or broker. Insurance companies do not sell long-term care insurance directly. If your employer offers coverage, there generally will be an agent involved to explain the plan or you might be offered information via an online website.

Long-term care insurance does not have to be complicated. But there are many moving parts and options available. If you are not familiar with them, you may find yourself overwhelmed with trivial and unimportant features. Or, you may end up with a number of different cost quotes for long-term care insurance that you really don't understand. I can help.

Each year, the American Association for Long-Term Care Insurance (http://www.aaltci.org/) conducts a national Price Index. I am a member of this industry organization and they report that prices from one insurer can be as much as 60 percent higher than another - for virtually identical coverage.

The least expensive might be excellent protection. Or, it might be missing a most important element that you won't realize until you eventually need care. Or, the insurance company may simply fail to offer a discount that could reduce your cost significantly.

Here are some three tips that could help save you time and energy, avoid frustration and ultimately help you get coverage you can afford and benefits that suit your need.

1. Compare Costs: There can be significant differences between what one insurance company charges as compared to another. For someone age 55, the cost differences could range from a few hundred dollars a year to almost one thousand dollars annually. Here's where it is important to determine if the insurance agent you are working with is shopping the marketplace to get you the best coverage for the lowest cost.

2. Shop Your Health: When it comes to long-term care insurance, your health is as important as your money. If you are in perfect health (the right weight, non-smoker, no medications) every insurance company will welcome you with open arms. If your health isn't perfect, some companies will offer you better rates than others. Again, that's where a knowledgeable LTC specialist comes in.

3. Start Low & Grow: Your cost for long-term care insurance will be based on various factors, your age, health and how much protection you buy. Start by pricing a plan that protects a set amount of assets; say $150,000 in today's dollars. Adding inflation protection option will enable your coverage to keep pace with growing costs. It will grow to $300,000 or more when you are likely to need it.

If you would like a no-obligation cost quote for long-term care insurance, please contact me by calling 239-280-3246 or E-mail me by clicking here.

Not All Wealthy People Can Afford To Self-Insure

Financial and consumer publications will often assess the cost of long-term care in terms of nursing homes. By doing so, the math becomes simple: the average stay in a facility is 2.5 years, which is then multiplied by an average cost of $67,000 per year, resulting in $167,500. This would seem well within the ability of a person with $2.5 million to pay. This fails to take into consideration two critical issues. Long-term care is not about nursing homes and that income pays for care.

Every carrier in the long-term care insurance industry reports that the overwhelming percentage of claims submitted is for care at home and in the community. The cost of that care easily exceed a nursing home stay (which may never be necessary) and therefore must be factored into the overall cost of assistance over a period of years.

Assuming a 5% rate of return and that 100% of the portfolio is in income producing investments, $2.5 million would generate approximately $125,000 each year. As previously stated, it is likely that income is fully committed to support lifestyle. Question: Where''s the money going to come from to pay for care?

What about the client with $20 million in assets? The first question to ask is, "What is the nature of his or her assets?" Many small business owners have the majority of their wealth tied up in their company. Paying for care can pose a liquidity problem. Have you considered the tax consequences of liquidating assets in order to pay for care? What of the portfolio has to be sold in a bear market? There is also the issue of legacy assets and which of them would have to be sold to fund care over a period of years.

SUMMARY: Clients nearing retirement focus not on assets, but how much income they will need to support their lifestyles and keep financial commitments. $2.5 million is therefore reduced to the income it generates. Since that income is already committed, it presents the client with very difficult choices, should care ever be needed in the future.

If you are considering the self-insure approach, let me show you a way to use an existing asset to leverage the potential risk. If you don't use it for long-term care you still hold the asset.

Call me at 239-280-3246 today or eMail me by clicking here

LTCi Doesn't Protect Assets - It Protects Income

It has long been held that long-term care insurance protects assets. It doesn't; it protects income. Clients work a lifetime to accumlate a portfolio which will generate sufficient income in order to maintain their standard of living during retirement. This lifestyle also includes keeping prior financial commitments. It is not unreasonable to assume that retirement income is matched almost dollar for dollar with retirement expenses. Since nothing has been allocated to pay for care, the income, already committed, will have to be reallocated. Where else can the money come from?

In its purest, long-term care insurance is no different than disability insurance; it provides a source of income. In this case, that inmcome can be used to pay for care. This allows the client's retirement income to continue to be used for its intended purpose, supporting lifestyle and keeping financial commitments. Without the product, the family has limited options. They can curtail their lifestyle or liquidate assets. The former may have far reaching consequences. The latter may create serious tax issues and/or shorten the payout of qualified funds and annuities.

NEXT Posting> Not All Wealthy People Can Afford To Self-Insure

Long Term Care Insurance is For the Wealthy

Of all the obstacles long-term care insurance (LTCi) faces in becoming a viable product for the financial services industry, none is harder to overcome than the belief that it is inappropriate for high net worth individuals. These clients are generally defined in trade journals as having at least $2.5 million in investment assets.

This belief is based on fundamental misconceptions of what long-term care insurance actually does. That, combined with a historical antipathy towards the product, leads many to suggest, "You can self-insure."

There are three key misconceptions: 1) LTCi protects individuals, 2) LTCi protects assets, and 3) wealthy people can afford to self-insure.

LTCi Doesn't Protect Individuals - It Protects Families

To understand what long-term care insurance does, you first need to understand what motivates people to purchase it. The commonly held belief that individuals purchase the product for reasons such as, maintaining their independence, getting into a good nursing home, or to avoid being a burden to those they love, is incorrect. No one purchases any form of personal line insurance such as life or disability income to use it; if they did the carrier would never sell it to them.

As with these traditional products, people purchase long-term care insurance because they understand the consequences an unlikely event such as needing care would have on those they love. Simply put, reasonable people never assess the risk of needing care, only the consequences to those they care deeply about if they ever need care. If they believe they are severe enough, clients will then disregard risk and focus only on a way to mitigate consequences. It is therefore, essential for the professional to understand what these consequences are.

The majority of care is informal in nature, being provided by family and/or friends. This assistance, referred to as custodial care, is necessary because of chronic debilitating illness makes it difficult, if not impossible, for people to perform basic daily functions. The nature of custodial care can be all-consuming for the providers, leading to serious emotional and physical consequences. Put simply, if your client needs care over a period of years, his/her life is not going to end. The lives of those providing care, as they know it, are going to end.

NEXT Posting> LTCi Doesn't Protect Assets - It Protects Income

What if I purchase Long Term Care and never need to use it?

I’ve wasted my money, right? Of course not, you’ve benefited from having the peace of mind that your care is guaranteed if you ever need it. The purpose of insurance is to cover catastrophes and we all hope we never need to use it!

Let’s make a comparison. What if you could buy a policy to insure your $500,000 home and pay a single premium of $100,000? Then fifteen years later you sell your home never having used your home insurance. How would you feel if you could get your $100,000 premium back? You’d be ecstatic!

You can do that with Long Term Care! Instead of insuring your home you insure yourself. You can buy a Long Term Care Policy with a single premium and if you don’t need to use it the premium will be returned to you, guaranteed!

Call me for the details.