Linked Long Term Care Insurance Attracting Younger Buyers

Posted on April 24, 2012 by jslome

To protect against the risk of needing costly long-term care an increasing number of national insurance companies are offering protection that combines life insurance with potential long term care insurance benefits. According to the 2012 Buyer Study conducted by the American Association for Long-Term Care Insurance, these linked benefit (also called “combination”) products are gaining favor with individuals in their 40s and 50s.

The Association’s annual study of leading insurers found that 53 percent of buyers of these hybrid policies were under age 65 in 2011 compared to only 48 percent in 2010. Some 42.5 percent of male and 38.5 percent of female buyers were between ages 55 and 64 explains Jesse Slome, director of the national trade group. Nearly one in 10 buyers was between 45 and 54.

“A linked benefit policy has advantages that many pre-retirement consumers find attractive,” Slome notes. Policies can fund expenses when qualifying long-term care is needed at home or in a skilled care facility. Some linked, or hybrid products, allow unused benefits to pass to named beneficiaries income tax-free. “At a time when long-term care is increasingly top of mind, these life insurance-based solutions avoid the ‘use it or lose it’ risk associated with traditional long term care insurance,” says Chris Coudret, CLU, ChFC, Vice President, OneAmerica one of the nation’s leading insurers offering linked benefit solutions. “In most cases, people make a single payment, effectively removing the risk of future premium increases.”

The AALTCI study reported sales for the participating linked benefit insurers increased 14 percent in 2011 and the premium increased almost 20 percent. To learn more or obtain long term care insurance costs from an Association member call (818) 597-3227 or visit the organization’s website www.aaltci.org.

Established in 1998, AALTCI is the national trade organization established to create heightened awareness regarding the importance of planning for long term care. To access or read three free consumer guides outlining ways to reduce costs for long-term care insurance visit the Association website http://www.aaltci.org/long-term-care-insurance-costs/

Long Term Care Insurance Guide Published

Posted on March 10, 2012 by jslome

The third in a series of long term care insurance informational guides is being made available free of charge to consumers.

According to Jesse Slome, author of the series of consumer guides and executive director of the the American Association for Long-Term Care Insurance, the guides offer the latest and most relevant information in a balanced and easy to understand manner.

“This is the first generation of Americans who in very large numbers are living into their 80s, 90s and their 100s,” Slome one of the nation’s leading LTC experts notes. “As a result, this is really the first generation that needs to prepare for the consequences of living a long life and that includes long term care.”

The latest guide, Fresh Perspectives On Long Term Care Planning explain various options and considerations. “We like to say that long-term care planning is something everyone age 50 or older needs to do, but we acknowledge that long-term care insurance is not the universal solution for all,” Slome adds. “But if you understand how to take advantage of discounts and newer options and features available, the coverage can be more affordable than many people think.”

The just-published guide explains some of the newer inflation growth options introduced recently by leading insurers. “Few people understand the many different discounts and ways to reduce the cost of coverage,” Slome explains.

The informational guides can be accessed via the Association’s website. To view the latest or prior long term care insurance guides go to www.aaltci.org/long-term-care-insurance-costs. No sign-in or personal information is required to access and read the guides.

Tax Deductible Long-Term Care Insurance Can Benefit People

Posted on February 25, 2012 by jslome

The vast majority of middle class American taxpayers over age 55 are still not aware that premiums for long term care insurance may be tax deductible, explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance.

Slome is the author of the 2012 edition of the Guide To Tax Qualified Long Term Care Insurance. The annual publication details the increased IRS tax-deductible limits and rules pertaining to individuals and business owners.

“There are over 6.6 million American tax filers over age 55 who itemized medical deductions in excess of the limitation and who would be able to deduct long-term care insurance premium costs,” Slome reports. “Tax deductibility isn’t the only reason to look into long-term care coverage but a tax deduction of several thousand dollars is not one to be overlooked.”

According to IRS analysis of 2009 tax filings (the latest year for which statistics are available), of the 20.4 million individual tax returns filed by Americans between ages 55 and 65, some 2.20 million itemized medical deductions in excess of the 7.5 percent limitation. Some 20.3 million individuals over age 65 filed returns and some 4.45 million of these itemized medical deductions in excess of the limits.

For individuals, long-term care insurance premiums up to IRS-established age-based limits are combined with other medical expenses. Only qualifying medical expenses above 7.5 percent of the filer’s Adjusted Gross Income (AGI) are deductible.

“Because of the need to be in relatively good health when applying for long-term care insurance coverage, most individuals probably won’t have significant medical expenses in the early years,” Slome admits. “But, clearly health changes can take place at any point and just a few large medical or dental expenses can place you over the limit making your LTC premiums a deductible expense.” The ratio (between AGI and the 7.5% threshold) becomes even more pronounced after age 65 when adjusted gross incomes are typically reduced.

Individual long-term care insurance tax deductible limits are based on your attained age for the tax year. For 2011 the maximum allowable limit for individuals who are more than age 50 but not more than 60 is $1,270. For individuals more than 60 but not more than 70 the limit is $3,390 and it’s $4,240 per-person after age 70. The 2012 limits are higher (see below).

Over half (57.0%) of new long-term care insurance policies are purchased by couples (AALTCI 2011 data). A couple where both husband and wife are age 65 would be entitled to include $6,780 of their LTC insurance costs as a medical expense. “If their AGI is $50,000, all medical expenses over $3,750 become itemized deductions,” Slome explains. According to the IRS, some 18.7 million tax filers report AGI of between $50,000 and $75,000 (2009 data).

The IRS analysis of data also revealed that after age 65 the number of tax filers deducting home mortgage interest declines significantly. “After 65 more people exceed the medical limits and deduct expenses than the number who deduct mortgage interest payments,” Slome says. “Having a paid up home after retirement frees income for other necessary costs and is a reason we recommend individuals start their LTC planning prior to age 65; changes in health is the other.”

Over half (56.0%) of individuals purchasing long-term care insurance are between ages 55 and 64 according to annual research conducted by the Association. Some 20.9 percent purchase protection between the ages of 45 and 54. “Insurers would have to charge significantly more if they offered coverage to individuals with health conditions,” Slome explains. “Some 24 percent of applicants between ages 60 and 69 are declined coverage because of health issues but that almost doubles (45%) for applicants between ages 70 and 79.”

Long Term Care Insurance And MS

Posted on February 20, 2012 by jslome

Over the weekend I helped a woman with MS begin the process of obtaining long term care insurance.

Multiple sclerosis or MS is an autoimmune disease that affects the brain and spinal cord (central nervous system). The disease affects women more than men and is most commonly diagnosed between ages 20 and 40 and you are slightly more likely to get this condition if you have a family history of MS or live in an part of the world where MS is more common.

Long term care insurance sold on an individual basis is not available to people with MS. To keep costs affordable for the greatest number of people, long term care insurers require that those applying for coverage be in relatively good health when they apply. Otherwise, those most likely to eventually need care would be the majority of applicants forcing all to pay more.

However, there are long term care insurance companies which offer policies to those who have MS. Generally they require that individuals not be using a walker or have other conditions. Long term care insurance costs for policies available to those with MS will be higher than traditional policies but for those with this condition and the ability to pay for insurance, it can be a very prudent purchase.

These policies are only available from select representatives and fort that reason, anyone interested in more information should call the American Association for Long-Term Care Insurance at (818) 597-3227 and we will do our best to connect you with a qualified expert who can assist.

Things You Don’t Know About Long-Term Care Insurance

Posted on February 8, 2012 by jslome

For the past two decades, part of my job as director of the American Association for Long Term Care Insurance involves reading news articles pertaining to long term care insurance planning. To be honest, most cover much of the same information leaving consumers with some misperceptions and certainly a lot of questions.

So I will dedicate several posts to the questions most frequently posed to Association staff. Hopefully you will find some of this information valuable and relevant.

Before I do, I would like to thank those visiting this website for their very nice and positive comments about the Association’s staff. Our role is to educate consumers and help you make better choices. Please feel free to call our offices at any time with questions. The phone number is 818-597-3227.

That The Best Age To Start Planning Is …

Long term care insurance costs or in the insurance industry lingo “premiums” are based on your age when you apply for coverage. So, it is true, that you’ll pay less if you apply in your early 50s than in your early 60s.

But the reason to start planning earlier has much more to do with your health than with costs. Insurers require that applicants health qualify. Each year, the American Association for Long-Term Care Insurance examines the percentage of individuals whose applications are declined because they do not meet health requirements.

Almost one in five (17%) of applicants between 50-and-59 years old were declined compared to 24 percent for ages 60-to-69 and a staggering 45 percent for ages 70-to-79.

We tell individuals the best age to investigate LTC insurance is between 52 and 64 or before one qualifies for the many covered medical exams covered by Medicare.

Most people believe money is the most important factor. It isn’t. Your health when you apply is far more important because … well quite frankly, many people wait too long. They call our offices ready to start the process of looking into long term care insurance only to find they can not health qualify for the coverage no matter how much they would be willing to pay. Those are the calls we hate to take.

Jesse Slome is executive director of the American Association for Long-Term Care Insurance, the national trade organization. To speak with a knowledgeable LTC insurance specialist call the Association at 818-597-3227 or visit their website at www.aaltci.org.

Long Term Care Insurance Group Carrier Unum Quits

Posted on February 7, 2012 by jslome

Another long term care insurance company selling to employer groups has exited the marketplace as Chattanooga-based Unum Group announced that it is ending sales of its group long-term care insurance in the midst of improved operating results in the fourth quarter.

According to Jesse Slome, executive director of the American Association for Long Term Care Insurance, Unum joins other insurers which have halted long-term care sales to employer groups. “This is a market where payouts have become more expensive.,” explains Jesse Slome, AALTCI director. “Unum previously discontinued sales of individual long-term care insurance in 2009.”

Offering long term care insurance to employer groups is different than offering coverage on an individual basis according to Slome. “Often the companies would have less rigorous health underwriting so they could eventually face greater claims risks. You have to have strong financial stamina and will to offer this product to groups.” Leading insurers like Prudential still offer long term care insurance to employer groups.

Financial reports acknowledged that the move produced a net loss for Unum in the fourth quarter, but the insurance giant reported higher operating earnings from its core businesses. Net income for the company fell into negative territory as the company took a $561.2 million charge due to discontinue selling new long-term care group insurance policies, according to a company-issued news release.

Stock analyst John Nadel of Sterne, Agee & Leach called Unum “a very interesting stock to watch” as the company jettisons its least profitable business.

Nadel said Unum’s decision to stop selling new long-term policies are due to the Federal Reserve System’s extremely low interest rates, which has lowered investment returns, as well as the number of Americans living longer, more expensive lives.

“It’s going to cost [Unum] more by a very significant amount to offer these long-term policies, a little over a $1 billion pre-tax,” Nadel said. “The underlying performance of their long-term businesses was better than expected, but they’re exiting this business at a massive cost.”

Slome’s organization recently added information on long term care insurance costs to the organization’s website. “Consumers want more information than ever and we are pleased to provide information and answers.”

What To Ask Your Agent Before Buying Long Term Care Insurance

Posted on January 23, 2012 by jslome

As we grow older, we each learn the value of asking many good questions before purchasing a new product or hiring someone to perform a service. But when it comes to buying long term care insurance, far too many people abandon this smart practice.

Part of that comes from fear of having so little knowledge about long term care insurance planning that one fears looking uneducated. Part of it comes from just wanting to get what can be an uneasy process over with as quickly as possible.

Because long term care insurance is still a relatively new product – only introduced in the late 1980s – we really are the first generation to be purchasing this protection en mass.

So, to help out here are two vital questions to ask your insurance agent when he or she asks have you looked into LTC protection. The questions have been developed by the American Association for Long-Term Care Insurance, the national trade organization helping to educate consumers since 1998.

How long have you been selling long-term care insurance?

Some insurance products are what we would refer to as commodity products. Term life insurance is such a product. The only real difference between one term life policy and another is the cost.

But long term care insurance is at the other end of the spectrum in terms of nuances and variations. Two policies that cost virtually the same could have definitions that come claim time could be the difference between having your claim paid or struggling to get it paid.

Only someone selling for a relatively long period of time – at least three or more years – will have gained the understanding of these nuances. The exception is if they are teamed up with a knowledgeable entity focused on long term care insurance and supporting newer agents in the business.

How many long term care insurance companies do you represent?

Generally, you’ll find one of two answers. Either the individual is an ‘agent’ which means they represent just one long term care insurance company. Or, they are a ‘broker’ which means they will have access to multiple companies. Both have pluses and minuses as we’ll discuss in a subsequent column.

Long Term Care Insurance Is It Health Insurance

Posted on November 1, 2011 by jslome

Jesse, I’ve got a Rabbi and his wife, interested in long term care insurance. He’s trying to get his Synagogue to pay for it, as they allot him a certain amount per month for Health Insurance.

He’s trying to include long term care insurance costs as Health Insurance, given he has several hundred dollars per month additional room in his Health insurance. allotment, which would pay for the LTC insurance.

He asked me, just a moment ago, if I could help him with any material or verbiage, in his negotiations with the board of directors of this 501c3 (non-profit) to sway them.

Thus far, they’ve said…this isn’t really health insurance.

I assured this producer that this was a great question and one worthy of a good Talmudic scholar because long term care insurance could be considered health insurance. many of the laws that regulate it are overseen by the same folks that manage health insurance within the State Departments of Insurance. That said, it could also be argued that it isn’t health insurance because it uses non-medical triggers to qualify for benefits.

However, I believe I came up with a solution that King Solo0mon would have been prod of. The synogogue could add dollars to a Health Savings Account (HSA). These dollars could be used to pay for long term care insurance premiums. The seas have parted and the rainbow appears.

If you’d like information on long term care insurance costs for yourself (or your rabbi) call the American Association for Long Term Care Insurance at 818-597-3227. We’ll be glad to help.

How Much Does Long Term Care Insurance Cost

Posted on October 31, 2011 by jslome

This morning’s question comes from a writer for Homewatch Caregivers, a leading provide of home care providers and longtime friend of the American Association for Long-Term Care Insurance. Here’s how I replied to their query:

The cost of long-term care insurance is determined by several factors you have no control over such as your age and health when you apply for coverage. Premiums, or the cost you pay, are designed to remain stable. They won’t change if your health changes and are intended to remain level for the life of the coverage.

Other factors that determine long term care insurance costs are entirely up to the purchaser. You’ll pay more for $500,000 of long-term care insurance coverage than for $250,000 worth of protection. There are also some significant discounts offered by insurers. For example, when a couple buys coverage, they can benefit from a couples discount that can amount to as much as 40 percent. Most people today add a deductible to their policy. Simply stated, they agree to pay costs for an initial period of time (typically 90 days) until their insurance policy starts to pay for covered care.

Finally, it is important to understand that each insurance company establishes their own rates and discounts. These can vary significantly and, as a result, it really pays to compare costs or to work with a long-term care insurance professional who will do the comparing for you.

Each year, the American Association for Long-Term Care Insurance produces a Price Index of costs. According to the 2011 index a couple both age 55 would pay $2,350 (combined) for $338,000 of immediate protection. The available benefit coverage would grow to $610,000 when the couple reaches 75 and to $821,500 when they reach ages 85. While the average cost was $2,350, the highest cost for virtually identical coverage was $3,970.

To obtain a free comparison quote for long-term care insurance from a member of the Association, click this link ( http://www.aaltci.org/long-term-care-insurance/free-quote/ ) or call the Association’s offices at 818-597-3227.

Long Term Care Insurance Reviews

Reviews, Costs, Options, and more….