For those of us lucky enough to make it into our 60s and 70s, applying to a long-term care insurnace plan can be a nerve-wracking experience.  Many applicants worry that their health histories, and what is in our medical records may be looked upon with scorn by potential underwriters.  Our experience has shown that many of these fears are unfounded.  Even a client with high blood pressure, controlled under medications, can apply for and be approved at Preferred Plus rates with some carriers if they have otherwise good health and live an active lifestyle.MY advice to new applicants to long-term care plans is to give it a shot, and if in doubt “double-app” to multiple carriers at the same time.  Because you have a free-look period after policy issue, there is no risk with qualified plans.  Ask us and we’ll be happy to assist you. 

It is a question that deserves an honest answer, and dialogue.  When should you look seriously at long-term care insurance?  And should you even look?  What got me thinking about this was an article on the US News and Report blog about the topic here.

Should You Buy Long Term Care Insurance At All?

It depends on your net worth.  Consumer Reports suggests that folks with $200,000 to $2 million in net worth are a good fit for long term care.  The wisdom on the street, where I spend my days, suggests it is more like folks with $50,000 and up considering long-term care insurance.  The peace of mind one gets from having an LTC policy cannot be ignored, nor can the costs of premiums.  At CoverageNet, we tailor long term care policies to fit a variety of budgets.  Another Long-Term care brokerage, LTCtree, has served thousands of clients in making long term care insurance decisions and advises some good ways to save on long term care insurance premiums.  The bottom line is, don’t put yourself in a box when considering long-term care insurance.

Back To Age: When’s The Best Age To Apply?

The year before you need the policy is the best time to apply, assuming you can qualify.  I jest, but the fact is, long-term care insurance is something that should be considered when you are at the peak of good health.  The difference between being insurable and not is only a doctor’s visit away.  The general rule is that the 50’s are a good time to look, though more and more people are buying as early as their late 30’s.

Indeed, Health is Key.

If you look at the numbers, you’ll find that waiting five years, premiums may increase only 20%.  However, the differences in health will raise your rates anywhere from 10% to 70%.  In fact, the highest rate classes are cost prohibitive to the point where very few applicants take a policy once placed in the lower rate classes.

You Know Your Family History Best

The best place to make decisions about long-term care insurance is at the family reunion.  Look at your relatives.  Do they play golf into their 90s, or is the family reunion actually held at the assisted living facility?

Many times a day, we hear the confusion of consumers who are expecting “universal health care” to be passed into law in the United States and who wrongly believe that UHC will pay for long-term care.  While some of these assumptions are true, I think it is fair to look at our neighbor to the north, Canada, to see how a single-payer health care system would play out in the US.

Provincial health care programs and employee benefits may not cover the full costs of a long term illness. That means your choice of care could be limited. LTCI can supplement government-sponsored programs and reduce the worry of protecting your assets and your choices. It can provide the funds to pay for the care you may need, give you options, and keep a long term illness from becoming a financial and physical burden on your family.

- Ang Perodilo Newspaper

So to those considering not getting a long-term care insurance plan, we would urge you to look again, for even under the most liberal of governments, long-term care is still an individual matter in many ways.

Today on Beaconcast, a news site serving Roswell, GA, there was an opinion piece that revolves around the premise that the long term care crisis is no longer pending; it is upon us.  Now.  With recent front page stories in the Wall Street Journal and many other papers around the country starting to hone in on the crisis, the hope is that consumers will begin to pay closer attention to long-term care and their future needs.

With recent Medicaid cutbacks, some nursing homes are no longer making a profit.  One example raised in the article was a home in Troy, Michigan, where the home was losing about $25 per day per resident.  Those numbers cannot go on, but things are being pinched from all directions.  And even worse in this case: the state required an extra nurse be added per shift, at a cost of over $100,000.  So the states, those lovely darlings, are simultaneously cutting funding and raising the cost of care.  Fantastic.

Long term care insurance is the only way out of this crisis.  Legislators and insurance companies need to come together now more than ever in order to come up with viable solutions for a long-term project that will both encourage consumers and protect them at the same time, fostering the sale of long-term care insurance.

Today I was reading the Wall Street Geeks site and noticed they have an upcoming show on long-term care insurance.  I’d suggest you listen in if you have access to the Wall Street Geeks radio show or conference call, as they will be covering the topic of long-term care insurance in-depth.

Long-term care insurance is an important investment for people of all ages, but according to Consumer Reports, it is more important as people approach retirement age.  They also have some other important feedback for potential buyers, so take a closer look at their long-term care insurance research and feel free to ask us if you have any questions about long-term care or any of the associated insurance products.

The health care system that deals with long term care is already stressed by current requirements.  A report released today by the Washington Post predicts that 10 million baby boomers will develop Alzheimer’s, requiring a serious look at long term care, long term care insurance, and the nation’s health care system in general.  The report, released Tuesday by the Alzheimer’s Association, showed that the disease is now the seventh deadliest in the nation and that women are at greater risk than men.

With one in eight boomers developing Alzheimer’s as they age, there is a serious need now, more than ever, to look into long-term care insurance to pay for the long stay often required when the mind-wasting disease strikes.  We wrote about how you can stretch a policy and now may be a good time to revisit that article.  Alzheimer’s patients can have long-term care stays of as long as many years, going way beyond the 3-5 years typically associated with other ailments that activate long-term care benefits.

I recently read that two ways to pay for long term care are becoming front and center for many baby boomers, who are seeing or have already seen their parents struggle with long term care situations.  The options of a reverse mortgage and long-term care insurance are both very popular ways to finance the expense of long term care.

Figures range from $100 to $400 per day for long term care, depending on what is being provided.  Many Americans will use their policies for home health care, which is the least costly option usually, but is also the least intensive.  Next comes assisted living, which is of course a more intensive plan of care and is for folks with more serious conditions.

A reverse mortgage is just what you’d expect it to be… rather than pay the bank, the bank pays you!  Reverse mortgages are generally available to those 62 or older in the U.S.  The money can be paid in a lump sum, but is usually paid in small monthly increments.  Of course, as time goes on, the bank will have more and more of the equity in your home.  For seniors, this may be okay.  However, it does leave one less asset that  folks can leave for their children.

With half of those over the age of 65 expected to need long term care in the future, the numbers are staggering.  Many boomers don’t want to saddle their children with the worry and expense of caring for them as they age.  Reverse mortgages may indeed be one effective way to accomplish paying the heavy toll of long term care.

In addition to reverse mortgages, you’ll probably want to consider a long-term care insurance policy.  With this coverage, which costs a few thousand dollars a year, depending on your current age and health, you begin to make the investment necessary to protect your children in the future.

According to a new story in the Eerie Times-News of Indiana, many types of life and health insurance premiums can be deductible for taxpayers.  It is true that some insurance products come with tax advantages that can save you money when Uncle Sam starts dipping in your pocket.

We’ve written extensively about this here.  In a nutshell, you can deduct your premiums in many small business setting and also if your health care expenses are 7.5% or more of your gross income.  The bottom line with this and all other issues is to ALWAYS consult a CPA/tax advisor prior to making any decisions that have tax implications.

Today in article in The Gazette of Colorado Springs talks of new home health care businesses coming in to Colorado Springs.  This growing sector of the economy is a hot bed for entreprenuers and is expected to continue to grow as baby-boomers begin to age and need the services of home health aides.  Long-term care insurance can pay for such care, which can be costly.

Home health care agencies send workers to homes, nursing homes and retirement facilities to deliver nursing and medical care for people with chronic diseases, infants, the disabled, patients recovering from surgery or injury, and the aging. Agencies might also supply employees to assist with daily living skills such as bathing, dressing and transportation.

Today, home health care is a $54 billion business.  What’s astounding is that the home health care industry is expected to double in the next five years!  The reason: all 76 million of the aging baby boomers are beginning to retire and more and more will begin to need assistance at home.

In Colorado, costs are running about $125 per day on average.  As the patient ages, it may be necessary to move from the home to an assisted living facility.  The idea of home health care is to stay in the comfortable environ of your home as long as possible.

Cornerstone Advantage is the newest long-term care insurance offering by Genworth Financial and AARP. The biggest drawback about Cornerstone Advantage is that it has limited benefits compared to, say, Privileged Choice or Classic Select (both Genworth products as well). Let me elaborate.
With Cornerstone Advantage, you do have the positive features such as coverage for long-term care at home, in an assisted living facility or even in a nursing home. As our statistics show, only 12% of claims are paid for nursing homes, and we think this is important for consumers to know. Long-term care insurance is not “nursing home insurance” anymore!

Specifics on Cornerstone Advantage

So I decided to look into some specifics on Policy Form Series 7048, I.E. Cornerstone Advantage. One key disclaimer that pops out immediately is the fact that Assisted Living Facility rent, room and board is available only as a rider for Cornerstone Advantage. Make sure you keep this in mind if you are considering this coverage! The plan has many advantages and disadvantages, depending on your needs. If you are considering the coverage, continue reading for further analysis on CA.

Continue reading “AARP’s Cornerstone Advantage : Analysis”