Good advice from Kaiser Health News: Hold off on genetic testing until AFTER you buy LTC insurance (or life or disability). You must disclose the existence of the testing and any known results on an application and results can be used to deny or limit coverage.
Looking forward, LTC insurance is more secure and reliable than ever.
CLICK HERE to read my new article on why LTC insurance remains a valuable insurance product with a future that should be much more stable than in the past.
Here is a link to an excellent article from Forbes.com that provides valuable, even critical, context to any discussion of long-term care planning and funding your plan with LTC insurance.
In many ways a recent Wall Street Journal article simply re-packages old news in a new emotional wrapper since LTC insurance rate increases have been under way across the industry for more than 10 years. It also gets a couple of very important things wrong - including the fact that there are many options for dealing with a rate increase other than just walking away from the coverage.
"The WSJ piece essentially falls into the 'bad news sells' category of reporting ... Its “Woe is me!” theme actually pushes people away from doing quality long-term care planning. Instead of lamenting past missteps, the article could have emphasized some of the new techniques for building effective and sustainable solutions to the budding long-term care crisis."
“Long-term care, for most people, is a home care problem,” said Bill Comfort, who owns Comfort Long Term Care, a brokerage based in St. Louis and Durham, N.C."
Check out this excellent article on using Partnership LTC insurance to design meaningful and affordable LTC insurance coverage - especially for care at home. CLICK HERE to read the full article.
Penn Treaty Network America LTC insurance company will now go into liquidation. A Pennsylvania court gave the PA Department of Insurance final approval to liquidate the LTCI company on March 1st. Benefits will still be payable if premiums continue to be paid on-time, but according to the PA DOI about 50% of policyholders may have their benefits limited.
Liquidation means that the claims liabilities now fall to individual states' insurance "guarantee funds" which most commonly limit total benefits to $300,000. A few states are slightly higher and a couple - including Missouri - have a cap of only $100,000 for LTC insurance. Note that in most cases you would be covered by your state of residence at the time of liquidation (March 1, 2017), NOT the state where you bought the policy.
While this insurance company failure is being reported as the largest financially in US history, it's important to note that Penn Treaty's policyholders account for only one-percent (1%) of all LTC insurance policyholders in-force, and that along with grossly under-pricing its overly-liberal policy benefits, Penn Treaty accepted people with health risks that no other insurance company would consider.
My general advice to Penn Treaty policyholders: Keep your coverage, especially if you are older or uninsurable and cannot replace your coverage. Even if you could qualify for a replacement, you may be better off keeping Penn Treaty on a limited basis.
Contact us for a policy/coverage review.
According to the PA DOI, Policyholders with questions about policies, claims, or related to liquidation should call Policyholder Services at: 1-800-362-0700.
If an insurance agent tells you to replace your long-term care (LTC) insurance, be careful! Take your time. Get a second opinion. It's probably a mistake, and the agent pushing a replacement may be breaking the law.
It is almost NEVER a good idea to replace an in-force LTC insurance policy.
We are hearing stories almost daily of unscrupulous agents urgently telling their clients to immediately replace their in-force long-term care (LTC) insurance for a variety of reasons, all bad:
A huge mistake that many people make when considering LTC insurance is "over-quoting".
Most people do not need to buy coverage for 100% of the cost of the highest-possible cost of care (skilled nursing home), and even shorter benefit periods (3-4 years) will cover the vast majority of care needs. It's kind of like thinking, "If I can't afford a Mercedes, then I'll just wait for the bus." It shouldn't be a zero-sum, all-or-nothing decision - that's a HUGE mistake. A Malibu with cloth seats and a 4-cylinder is great transportation ...
$3000 a month of LTC insurance benefits will pay for five hours of home care seven days a week, or 10 hours every-other day. It will cover more than 1/2 of a good Assisted Living Facility in most of the country, and provides a 33% "discount" to a $9000/month bill in a nursing home.
LTC insurance claims data show that 60%+ of claims start at home. Guess what, about 60% of claims also END at home. Only about 20% of LTC insurance claims end in a nursing home.
The average LTC insurance claim is less than four years, even less than three years for men. Cover that first before you worry about Alzheimer's care for 6+ years. If you only buy a 3-year policy (couples can "share" up to a total of 6 years for the price of 3 each), and if you do get Alzheimer's, you will still have much more private-pay flexibility than having nothing.
We need to stop worrying about the cost of care in a facility where most of us are NOT likely to end up (especially with reasonable - and affordable - planning). We do need to worry about where we will get an extra $3000-$4000 a month to pay for part-time home care so our spouse can have a life, get a good night's sleep, stay healthy, etc., and so our adult kids can be care managers not caregivers. Home care comes first. Always. And this is also where families are personally and financially most at risk when someone they love needs care.
Solve the part-time home care problem first.
China Oceanwide will buy Genworth in a $2.7-billion deal which includes a $1.1-billion capital commitment to pay off debt and invest in the US life insurance business.
“China Oceanwide is also aligned with Genworth’s long-term goals of serving the aging population in the U.S., and providing financial capabilities to those seeking home ownership.”
I believe this is good news for Genworth policyholders and the LTC insurance marketplace overall. Readers should note that two other active LTC insurers are also now foreign-owned. John Hancock is owned by the Canadian insurance company Manulife, and Transamerica is owned by Dutch insurer AEGON.
The US life & LTC biz must and will remain a US-based subsidiary of China Oceanwide, subject to US federal and state regulators. In-force policies must all be honored by law.
Click here for a link to the company's full press release:
As an insurance broker who has sold LTC insurance since 1992, and who has focused exclusively on LTC insurance since 2000, I have been following the FLTCIP rate increase news since it is such a large player in the marketplace. The "average" increase for current policyholders is over 80%, with some as high as 125%!
Here's my take: Welcome to LTC insurance.
The FLTCIP is basically having to realize the same increases, for the same reasons as the rest of the private LTC insurance marketplace. 125% is NOT an outlier. Several other companies including some of John Hancock's individual policies, and Genworth’s have had 80%-100%+ increases. Others have had those amounts as well cumulatively over 2 or 3 increases in the past 10 years ..........
Another article on the high cost of health care in retirement, and again, these numbers all exclude the cost of long-term care.
The Motley Fool does a good job of examining a couple of different studies on what we should expect to pay out of pocket for health care in retirement, and how even with estimates exceeding $240,000 over a 20-year retirement we may still be UNDER-estimating the cost.
MOST of the costs are monthly premiums for Medicare Part B and Medicare Supplement insurance, plus an average of Medicare deductibles and co-payments.
None of the studies cited include the cost of long-term care services.
The Fool's advice:
This is a well-done article that lays out facts and ways to approach the planning issues without relying on scare tactics.
Read the full article on-line by clicking HERE.
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