Planning for Long-Term Care in America

LTCI Partners December newsletter - timely advice for advisors

Hot off the press, our monthly e-mail newsletter geared for advisors:

LTCI Partners December Newsletter

John Hancock recommits to long-term care Insurance

Recently, there has speculation about LTC insurers leaving the marketplace, including John Hancock.  Although John Hancock has suspended group sales, they are firmly committed to the individual marketplace.  Here is a communication from John Hancock to their distribution partners discussing their committment...

Download Marianne Harrison Letter to Distribution Nov 30 2011

Sure, LTC carriers are in a challenging market, but this isn't unlike other businesses.  However, the need for LTC wil continue to grow and private insurance is going to continue to be a big part of that.   Comments?

November is LTC awareness month - advisors are educating clients about LTC needs

November is the start of long-term care awareness month.  For many financial advisors, this means kicking off an awareness campaign to let their clients know about the importance of planning.

Organizations like LTCI Partners have put together resource pages that can be used by advisors, filled with consumer friendly marketing material.  Click here to access the LTC awareness month marketing page.

Which is best, calendar day or service day elimination period?

This post, by Lauren Jiles-Johnson, LTCI Partners director of marketing, describes how elimination periods work in LTCi policies and notes facts advisors should consider when recommending the best EP for a client's needs.

The elimination period can be a confusing aspect of long-term care insurance.  First, the name is awkward – most people understand the concept of a deductible in insurance, but an elimination period?  A better term is probably waiting period, because this indicates that there is a period of time before benefits can be paid.

Remember, all tax-qualified LTC policies use basically the same benefit triggers -- failing to perform two of six activities of daily living or having a cognitive impairment that requires someone keeping an eye on you. In addition, a health care professional must certify the disability is expected to last at least 90 days.

However, before a client or their care provider receives benefits, the elimination period (EP) needs to be satisfied.

LTCi policies come with EPs ranging from zero to 365 days.  But the vast majority of buyers -- 76.3 percent—choose a 90 or 100-day EP, according to the 2011 Individual LTC Survey published in Broker World.  Why 90 days?  Well, for one thing, the LTC disability is expected to last 90 days – remember, it’s called long-term care insurance for a reason! Also, in many cases Medicare will cover some care for a period of days. 

When purchasing a long-term care insurance policy, your clients might want advice regarding whether to purchase a calendar-day or service-day EP.  The way those days are counted can make a huge difference in how long a client has to wait for coverage. 

A client with a 90-day EP who purchases $200 per day in coverage would have to pay for the first $18,000 ($200 x 90 days) of his or her care before the policy began to pay. And that is in today’s dollars.  If your client goes on claim 25 years from now, the cost will be much higher.

With a service-day elimination period, only the days when he actually receives care are counted toward the 90 days.  So if he is at home and has a homemaker come in three times a week, the client is only using three days a week toward the EP.  At that rate, it would take 30 weeks, or over seven months, to exhaust the elimination period.  A very ill client could potentially die before accessing his benefits.

In contrast, if that same client has a calendar-day elimination period, the count starts the day the client goes on claim and 91 days later, regardless of whether service was received, the insurance begins to pay.

Clearly, a calendar-day EP means your client receives benefits sooner, so does that make it better?  Usually, although a policy with a calendar-day EP could be slightly more expensive.   Many of the newer products have only calendar-day EPs.  Other newer products have both options, but the price differential is negligible.

Generally speaking, clients will appreciate a shorter elimination period when they go on claim.  Most policies offer a rider that allows for a zero-day elimination period for care received at home.  The client receives coverage from the first day and the count begins toward the EP if he or she needs to move to a facility.  This feature might add an additional 10% or more to the cost. Some policies offer a built-in zero-day EP for homecare.

Your LTCI Partners sales consultant will be happy to help you design the best policy for your client’s needs.  Contact us at sales@LTCIPartners.com.

Long-term care insurance- focus on planning, not the product

Good Article from Steve Cain, head of sales for LTCI Partners.  This article talks about how financial advisors can better serve their clients by focusing on Long-term care planning instead of trying to push a particular insurance product.

http://www.asjonline.com/Exclusives/2011/9/Pages/LTC-Focus-on-Planning-Not-Product.aspx

 

 

New LTCi product changes due to new assumptions, claims history

By: Tom Riekse Jr.

Three carriers -- Genworth, Transamerica, and John Hancock -- have introduced new products in recent months. The newer products reflect the latest in actuarial assumptions and claim trends, which are designed to meet the needs of policyholders in the future.

 There are multiple ways to learn about the new products.  First, for a general overview of the product changes in the market, view the August LTCI Partners teleconference. The monthly call includes some background on the assumptions that went into the product, plus highlights of the new plans.

 Next, you can view carrier- specific training from the carriers – here are some links to that:

 Genworth Privileged Choice Flex Product Training  

TransCare II Product Training

 

Here are the highlights of the products:

 Genworth Privileged Choice Flex:

• Live+Well benefit – Mayo Clinic online tool and support
• Enhanced shared coverage – if entire pool of money is exhausted by one spouse, the healthy spouse is  guaranteed to have 50% of the original pool
• Caregiver support services – access to CareScout to help identify care resources.

Transamerica TransCare II

• 5-year rate guarantee
• Monthly cash alternative option – 1/3 of monthly benefit
• Single pay available

John Hancock Custom Care III

• CPI Compound Inflation Option continues, with new to age 75 option
• Built in return of premium
• Updated actuarial assumptions

 

In addition to the new products, there are new sales tools and web-based quoting tools.  Transamerica even has smart phone (iphone) and tablet (ipad) software!

 Finally, all these products are on Vital LTC, including the new Blueprint tool.  Take a look at these new prdoucts today or call us for more details.

Are you an insurance advisor who has seen long-term care insurance help a client?

If so, you can submit your story to the Life and Health Foundation and have it be made into a realLIFEstory about long-term care.

The Life and Health Foundation, www.lifehappens.org, is now taking entries from advisors.  The stories are due by September 12th and can be submitted online to www.lifehappens.org/ltci-entry. Selected stories will be used during long-term care awarenness month and will be showcased with a flyer and video.

For a look at past videos of realLIFEstories related to long-term care, visit http://www.lifehappens.org/videos/real-life-stories-videos/long-term-care-videos/ .  

Anyone have a story they want to share?

Protect and Serve: What Advisors Should Know about Women and Long-Term Care - Long Term Care Insurance - Agent's Sales Journal

Olympic Gold Medalist Wendy Boglioli is a passionate advocate for LTC - here she addresses advisors on how to look at current trends in LTC and how they specifically affect women.

Protect and Serve: What Advisors Should Know about Women and Long-Term Care - Long Term Care Insurance - Agent's Sales Journal.

Selling long-term care insurance to high-net worth clients

Often wealthy clients argue that they don't need long-term care insurance because they can afford to self-insure.  Kevin Slusarz, LTCI Partners sales consultant, explains what motivates high-net worth clients to purchase LTCi.

Why should my high-net worth clients buy long-term care insurance? I get this question almost every day. If you are thinking about selling long-term care to high-net worth clients, there are ways to prepare yourself for the long-term care conversation.

While your clients may be able to provide for themselves financially in the event of a long-term care incident, they may not have someone to manage, monitor and adjust a plan of care with their physicians and caregivers. In the event of a long-term care need, the insurance contract provides access to a team of advocates who can assist in designing, developing, and managing the plan of care. This can be one of the most valuable selling points for high-net worth clients because they want to ensure they receive the best care while not laying the burden on their family.

Keep in mind that long-term care is not an asset protection tool for high-net worth clients but rather a means to the best care that is available.  Long-term care insurance provides access to independent health care professionals who will come to your home, assess the patient, negotiate provider discounts and coordinate the best plan of care for your client.

A popular LTC funding option for high-net worth clients is self-insuring the risk.  While they may have the ability to self-insure, they may lack liquidity. That lack of liquidity may force your clients to sell assets at a highly discounted rate as well as face a substantial tax liability. It is impossible to predict a long-term care event and having long-term care insurance will give them peace of mind by keeping their estate intact while receiving the best care possible.

The bottom line is that many high-net worth individuals understand the concept of risk management. In addition, many are in the position they are in because of a fiscally conservative lifestyle. The purchase of a long-term care insurance policy allows them to practice what they have been taught to do throughout their lives: minimize risk, work with experts and avoid selling assets below their value.

Boomers Can't Afford Another Market Downturn: Transamerica's Paulsen - Financial Planning

This article, geared for financial advisors, discusses the fact that boomers can't count on traditional long-term investing rules of thumb for retirement - or for paying for long-term care.  There is too much at stake to not have some protection.

Boomers Can't Afford Another Market Downturn: Transamerica's Paulsen - Financial Planning.