Long Term Care Insurance – Get Covered

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Categories: Industry Insights

November is Long Term Care Awareness month, which makes it a great time to prepare for the future, and for the possibility that one day care might be needed for ourselves or our loved ones. Long Term Care is the care provided to an individual who can no longer perform the activities of daily living by themselves. While it is common for people to think that they’re healthy and won’t need long term care in the future, the reality is that many of us will need some type of care.

Who pays for Long Term Care?

The common misunderstanding is that when you need long term care assistance, the costs will be covered by your health insurance, Medicare, or Medicaid. Health Insurance and Medicare both only cover a very limited portion of a nursing home stay, and with many conditions you’ll have to meet. Less than 5% of nursing home income is derived from Medicare. These two policies also don’t cover any costs for a nursing aide, unless they are providing rehabilitation services. Medicaid will pay for a larger portion of long term care services, but you must meet minimum income eligibility requirements first.

About 70% of people over age 65 can expect to need some form of long term care. Only a long term care insurance policy will pay for services needed for day to day assistance that you’ll need when you are not able to take care of yourself. The benefits can be used for care in your home or care in a facility.

Greenberg, Wexler and Eig, LLC offers several solutions to long term care insurance. Policy types include traditional long term care insurance, hybrid long term care/life insurance policies, and Universal Life insurance policies that include a LTC rider. Please contact us if you would like to further discuss which type of policy would be the best fit for you.

By: Sarah Quinn
#1867-2016

Long Term Care Insurance – The Devil is in the Details

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Categories: Industry Insights

November is Long Term Care Awareness Month and it is a great time to consider solutions for one of the most pressing needs of baby boomers. This group (born between 1946 and 1964) is beginning to retire and are challenged with planning for future health care costs. While Medicare provides most retirees with health insurance, it pays only a fraction (if any) on long term care costs.

Long term care insurance policies are available to address this concern. Over the last 20 years, we have seen much volatility in products and carriers in this market. The “dust has settled” and the three basic product types are: Stand alone, Hybrid and Life Insurance with LTC riders.

Stand-alone products are like term life insurance. You pay your premium each year and if you have a claim, the benefits begin. The main advantage of this approach is the flexibility in design. Disadvantages include premium increases and there is no value if the benefit is never used.

Hybrids products (combination of life insurance and long term care) have become popular as they provide a life insurance benefit and a long term care benefit. They also provide a premium refund feature so there will always be a benefit to the insured or their family.

Life insurance with long-term care riders have also become increasingly popular. For those who have a life insurance need, it is an inexpensive way of providing LTC benefits. And like the Hybrid products, a benefit (either life insurance, LTC or a combination of both) will be paid.

The way LTC riders work in a life insurance policy is that if the insured needs home or nursing home care, the policy allows for an “advance” of the death benefit to be used for the care. These riders do not significantly increase the cost of the policy as the insurance company has to pay the benefit either way.

However, there is a big difference in the riders. Not all long term care riders are created equally. Some are called long term care (LTC) riders and some are called critical illness (CI) riders. What is the difference?

LTC riders are very similar to LTC insurance when it comes to triggering the benefit. If the insured needs assistance with 2 out of 6 activities of daily living (ADL’s) or suffers from cognitive impairment, the benefits begin. If the client gets better, the benefits stop and the unused benefit can be used later. With CI riders, benefits are only payable if the condition is expected to be terminal. This could severely impact the insured and their understanding of their policy. Recently, some companies have removed the “terminal” requirement in order to trigger benefits, so it is very important for the insured to understand what he/she is buying. Another concern with CI riders is the waiver of premium provisions and how they affect the policy after a claim.

Long term care insurance is very complicated, especially when dealing with combination products. At Greenberg, Wexler and Eig, we can educate you on options and assist you through the entire process. This material is provided for informational purposes and should not be construed as a recommendation, legal or tax advice. You should consult with a financial professional before making and decisions.

1795-2016

Rob Lowe and Maria Shriver Talk About LTC

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Categories: Media Commentary

In the newest “Conversations Matter” video, Rob Lowe and Maria Shriver sit down and discuss long-term care. Maria Shriver talks about her personal experiences with her aging parents and how her generation is the one igniting this important conversation. Rob Lowe sides with Maria Shriver by promoting the need to take ownership instead of waiting to react to an event.

In the video, Maria Shriver asks, “What is the answer to the talk that we all need to have?” and she answers herself, “Information, inspriation, ignite, action. And that’s how you make an impact.”

They echo reasons why we believe long-term care is so important.

To discuss whether or not long-term care is right for you, contact Keith Eig.

Do You Know Long-Term Care? (Part 3/3)

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Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs). Long-term care insurance helps cover the costs of home and nursing care when you are not able to perform ADLs on your own.

As we continue celebrating LTC Awareness month in the final week of November, we want to see how much you know about long-term care. The goal of LTC Awareness month is to create heightened awareness of the need for long-term care and the importance of planning options available to Americans and their families.

Now we want to ask: are the following four statements[1] true or false?

1. Nursing home expenses for Alzheimer’s Disease patients are covered by Medicare.

  Medicare provides few benefits for the LTC services required by most people with Alzheimer’s Disease. Full reimbursement for skilled nursing home care is limited to 100 days per benefit period, after which time the patient must contribute to the costs. Also, Medicare pays nothing if the patient requires only custodial care.[2]

2. The average length of stay in a nursing home is more than four years.

  The average length of stay in a nursing home is 2.4 years.[3]

 

3. Nearly 40% of the long-term care population is under the age of 65.

  41% of people receiving LTC are between the ages of 18 and 64.[4]

 

4. On average, a one-year stay in a nursing home costs about $30,000.

  On a national average, a one-year stay in a nursing home costs about $86,000.[5]

 

To learn more information about LTC and your LTC needs, please contact Keith Eig.

 

 

 

[1] Statements given by John Hancock’s Long-Term Care Quiz.
[2] Medicare and You, 2006. CMS Pub. No. 10050, p. 15, 2006.
[3] The Lewin Group, “Nursing Home Use by ‘Oldest Old’ Sharply Declines” November 2006.
[4] Georgetown University Long-Term Care Financing Project, Long-Term Care Financing Policy Options for the Future” June 2007.
[5] John Hancock 2011 Cost of Care Survey, conducted by LifePlans, Inc.

Do You Know Long-Term Care? (Part 2/3)

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Categories: Industry Insights

Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs). Long-term care insurance helps cover the costs of home and nursing care when you are not able to perform ADLs on your own.

As we continue celebrating LTC Awareness month, we want to see how much you know about long-term care. The goal of LTC Awareness month is to create heightened awareness of the need for long-term care and the importance of planning options available to Americans and their families.

Now we want to ask: are the following three statements.[1] true or false?

1. Medicare is not the primary funding sources for most seniors’ long-term care costs.

  Medicare appending accounted for 20% of total long-term care expenditures in 2007. While it primarily covers acute care, it pays for limited stays in post-acute skilled nursing care facilities and home health care.[2]

2. Most long-term care is provided in a nursing home.

  Most LTC is not provided in nursing homes. 80% of older adults who receive LTC do so in their own homes or community settings.[3]

3. Medicaid covers long-term care services received at home.

  Medicaid primarily covers long-term care services in nursing homes. In states where Medicaid does cover home-based long-term care services, it is done so on a limited basis.[4]

 

To learn more information about LTC and your LTC needs, please contact Keith Eig.

 

 

 

[1] Statements given by John Hancock’s Long-Term Care Quiz.
[2] H. Komisar and L. Thompson, National Spending for Long-Term Care (Washington, DC: Georgetown University Long-Term Care Financing Project, February 2007, Fact Sheet).
[3] US Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, September 2008.
[4] The Official US Government Sit for People with Medicare, www.medicare.gov; Medicaid and Long-term Care, “What is Long-term Care?” August 2006.

Fun Fact: Life Expectancy vs. Health Expectancy

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We want to share this fun fact with you as we continue to celebrate Long-Term Care Awareness Month.

It should come as no surprise that life expectancies have increased.  In 1900, the life expectancy was 50 years. In 2014, life expectancy is now 80 years.  That’s a 60% increase!

It should also come as no surprise that health expectancy has risen. Health expectancy is the number of years that you are expected to require health assistance and will accumulate medical expenses.

From 1900 to 2014, health expectancy has increased from 2 years to 15 years.  That is a 750% increase!

An important part of any financial/retirement plan is being prepared to handle a long-term illness.  At GWE, we can show you options to address this concern.

Do You Know Long-Term Care? (Part 1/3)

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Categories: Industry Insights

Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs). Long-term care insurance helps cover the costs of home and nursing care when you are not able to perform ADLs on your own.

As we continue celebrating LTC Awareness month, we want to see how much you know about long-term care. The goal of LTC Awareness month is to create heightened awareness of the need for long-term care and the importance of planning options available to Americans and their families.

Now we want to ask: are the following three statements[1] true or false?

1. Disability insurance and long-term care insurance cover the same things.

  Disability insurance provides you with income if you become sick or injured and are unable to work. It is not designed to cover LTC expenses.[2]

2. The average lifetime chance of needing long-term care for an individual 65 years or older is more than 40%.

  It is estimated that approximately 70% of people over age 65 will require long-term care services at some point in their lives.[3]

3. People have to spend all or almost all of their assets to get Medicaid benefits.

  While the maximum level of assets you’re allowed to keep caries from state to state, people are required to spend down assets to a significaltly low level before they can qualify for Medicaid benefits.[4] In some states, policyholders may receive additional asset protection if they have a Partnership-qualified policy.

To learn more information about LTC and your LTC needs, please contact Keith Eig.

 

 

[1] Statements given by John Hancock’s Long-Term Care Quiz.
[2] H. Komisar and L. Thompson, National Spending for Long-Term Care (Washington, DC: Georgetown University Long-Term Care Financing Project, February 2007, Fact Sheet).
[3] US Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, September 2008.
[4] The Official US Government Sit for People with Medicare, www.medicare.gov; Medicaid and Long-term Care, “What is Long-term Care?” August 2006.

The Best LTC Insurance Plan: Memory Boosting Foods

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Categories: Industry Insights

We want to kick off long-term care awareness month with some food for thought!

There are three types of long-term care insurance policies:

  • stand-alone
  • hybrid
  • life insurance with LTC riders

We want to tell you a fourth policy…possibly the best policy there is: memory-boosting foods.

One of the leading causes for long-term care insurance claims is a decline of cognitive ability. Keep your mind strong and enhance brain function with these foods that have been scientifically proven to stop and possibly reverse age-related memory loss.

 


Blueberries

Blueberries are loaded with anthocyanins, which are powerful phytochemicals that give them their blue hue. They are a natural chemical compound that has been proven to give people a substantial delay in mental decline.

 


Kale

Consuming high amounts of vegetables lead to less age-related memory decline and kale is one of the most impressive. Brush with olive oil for an added brain boost.

 

Salmon

This fatty fish is rich in Omega-3 fatty acids, a structural component of the brain that enables neurons to conduct signals to the brain.

 

 


Nuts and Seeds

All varieties of nuts and seeds help promote steady blood flow and ease inflammation, which is critical for keeping your memory sharp. Bonus: they are also a heart-healthy food.

 

 


Beets

This secret weapon has been proven to increase blood flow to the area of the brain associated with dementia. Be brave and drink beet juice, or just add a few slices to a salad.

 

 

To discuss any of these four policies, contact Keith Eig, CLU, CLTC.

Estate Planning with Long-Term Care for Wealthy Families

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Categories: Industry Awareness

The long-term care market has significantly changed over the past several years. As the market evolved, many high net worth individuals have either purchased or expressed an interest in a new long-term care policy form called “Hybrid Long-Term Care” coverage.

Advisors frequently ask us if it is prudent for their high new worth clients to acquire long-term care insurance when their net worth is sufficient to withstand the additional expenses attributed to long term care. Every family’s goals, objectives and circumstances are different. Yet many of the issues remain the same when considering the pros and cons of a Hybrid Long-Term Care policy.

Hybrid Long-Term Care is a combination of cash value life insurance and long-term care coverage. The program is funded with a single lump sum deposit with the insurance company. The lump sum deposit guarantees the benefits in the contract and no further premiums will ever be required (this is not the case with traditional long term care policies where insurance companies have the right to raise the premiums). In the event that the insured qualifies for long term care benefits, the policy pays the monthly benefit amount over the time period purchased. However, unlike traditional long term care policy, if the insured dies, a death benefit is payable to the insured’s beneficiary. Also, many Hybrid contracts have a return of premium provision or rider. This rider will return the single premium to the insured at any time before a long-term care claim if the insured determines that the coverage is no longer needed. In a low interest rate environment where cash earns very little, this makes a Hybrid Long-Term care contract a good cash alternative for the high net worth that maintain substantial cash reserves.

Long-Term Care benefits paid from a qualified long-term care policy are income tax free. If self-insuring and resources are needed to fund the expenses of long term care, selling assets may result in capital gains or ordinary income taxes. Also, markets fluctuate and timing issues should be part of the consideration. Lastly, assets with substantial built in gains my best be held until death because the step up in basis could be very valuable for the family.

Lastly, long-term care events are an emotion time for families. Whether it is a healthy spouse or children that helping sort through finances and coordinate care, tension can run high. Some companies, in addition to providing the funds at the time of claim, also provide “Concierge Care Coordination” services to provide much needed support at the time it is needed most.

In conclusion, there are several compelling reasons why long term care insurance, if structured properly, can play a role in the planning for high net worth individuals.

Contact Matthew Friedson to talk more about Hybrid Long-Term Care.

Long-Term Care Insurance… Does It Pay?

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YES.

Last year, long-term care insurance companies paid nearly $7.5 billion in claims to 273,000 individuals. Total payments increase by 13% over the prior year and the number of claims increased by 3.4%. Over 7,000,000 Americans own a long-term care policy. Approximately 70% of claims begin in the insured’s home or an assisted living facility. “Today a long-term care policy is really a nursing home avoidance policy.”

Contact Keith Eig for more information on long-term care insurance and if it’s right for you.