Thinking about Buying Long-Term Care Insurance? Read this first.

confusion-005by Tobe Gerard, CLTC, MBA, MLS, LIA

There are many questions posed by prospective clients when they are first considering long-term care insurance (LTCi), but most begin with the disciplined questioning of the Socratic method: Who? What? When? Where? Why? How?

Who is buying? Couples and single women.

What are they buying? 50% of our clients buy traditional LTCi and 50% buy a hybrid policy that combines LTCi with life insurance. That is a huge shift from just five years ago when traditional LTCi made up 90% of our sales.
>Traditional LTCi Policies Current policies are less robust than years ago, typically they provide $4,500/month or $6,000/month, 3 or 4 year benefit period, 3% compound inflation. Couples almost always purchase the “shared” rider.
> Hybrid LTCi Policies Clients most often re-position $100,000 to fund a policy. The benefits range from $4,500 to over $6,000/month depending upon age, gender, and dollars contributed to fund the policy. The sweet spot appears to be policies that have a six year benefit period and 3% compound inflation.

When are they buying? Most people purchase LTCi in their fifties, but our clients range from 46 to 71.

Where are they buying? The states that have the most “insured lives” are CA, TX, NY, FL, IL, PA, OH, VA, NJ, WA, and MN.

Why are they buying? These are the top six reasons people purchase a LTCi policy.
#1 A desire to protect assets.
#2 A desire not to be a burden to family and other loved ones.
#3 A desire to have choices on where to receive care.
#4 A desire not to rely upon the government for their care.
#5 They have experienced using LTCi for a relative (parent, grandparent, spouse) and saw what a gift LTCi was to the family.
#6 They have experienced caring for a relative without LTCi and they saw how it drained the family’s resources financially and emotionally.

How are they buying? Many clients have been referred to us by their financial advisor, their attorney, or their accountant, although some people purchase policies through their employer; some buy through affinity groups such as college alumni associations or professional associations that offer members a discount; and others search online and buy a policy remotely from an insurance agent who sells by phone in multiple states.

Editor’s Note: For decades, the author has provided families with guidance about selecting long-term care insurance policies as well as how and when to trigger a claim. To help you become a more savvy consumer, we’ve asked Tobe to become an ongoing contributor to our blog.

Reprinted with permission from Tobe Gerard.

c 2016 Circle of Life Partners, LLC. All rights reserved.

Are You One of the Village People?

by Janet Simpson Benvenuti

Next Thursday, June 30th, I’m heading to Cape Cod to join the Village People. I won’t be donning my cowboy boots or singing “Y-M-C-A” but I will be leading a fun, community-wide conversation about aging and aging in place with Neighborhood Falmouth, one of the first virtual retirement villages in the United States. Joining our conversation will be experts in law, financial planning, home care and senior housing along with working daughters juggling aging parents and teenage children, Baby Boomers planning for their own longevity, and a random cowboy or two. If you’re heading to Cape Cod for the fourth of July, especially if you’ll be spending time with your older relatives, stop by and join the conversation. Learn why fewer Baby Boomers will be using senior housing. No singing skills required.

Here’s where we’ll be on Thursday, June 30, 2016, 7pm-8:30pm: Unitarian Universalist Fellowship of Falmouth, Sandwich Road, Falmouth.

c2016 Circle of Life Partners, LLC. All rights reserved.

Know Your Money: The True Cost of Long Term Care

Calculating the Cost of Care

Calculating the Cost of Care

by Janet Simpson Benvenuti

Recently I asked our financial advisor to do some retirement planning and estimate expenditures through the end of my life. To my surprise, my husband and I both are going to die at age 87 (for the record, I will predecease him), spending $100k/year in today’s dollars for each of the last three years of life. Amused, I wondered where I would find care for $100k in Massachusetts. The last assisted living facility with a memory unit I visited cost $8700/month without hairdressing or a personal care attendant. I’m sure to need both. And only three years of care? Prudently, one would plan for at least six, and with any history of longevity or cognitive impairment, I would plan for 12.

That same day, I spoke with a different financial advisor whose 91 year old client has Alzheimer’s disease. He and his spouse reside in Connecticut and spend a more typical $15,000 a month for assisted living with an aide for additional support, $180,000/year. When I reminded that advisor that home care for someone with Alzheimer’s disease is tax deductible as a medical expense, she expressed surprise, unaware of IRS Publication 502.

What’s going on here? Why are financial advisors so ill-informed about the true cost of care?

Quite simply, few people, including financial professionals, understand the extraordinary cost of long-term care and the options available to manage expenditures wisely in the last decade of life.  Effective financial planning requires more than just the skills to create an investment portfolio or project future expenses, but integrated knowledge about finance, elder law, insurance, health care and inexpensive community resources for aging in place. It’s why I founded Circle of Life Partners.

I’ve been guiding families through the aging journey for years, yet I still find the numbers shocking. Recently, I received a call from a family of three adult children who were growing concerned about their mother’s ability to care for their father safely at home. He was three years past his initial diagnosis of Alzheimer’s disease and the family felt he might be best served by moving into an assisted living facility with a memory unit although he did not have long-term care insurance. I calculated the price tag for nine years in a highly-regarded memory unit and subsequent skilled nursing care, $835,000- $1.25 million. Using an adult day health program or a part-time companion suddenly seemed a much more reasonable option.

Last week, I wrote about the Bipartisan Policy Center (BPC) launch of a new initiative on long-term care led by former Senate Majority Leaders Tom Daschle (D-SD) and Bill Frist (R-TN), former Congressional Budget Office Director Alice Rivlin, and former Wisconsin Governor and Secretary of Health and Human Services Tommy Thompson.  BPC’s Long-Term Care Initiative will propose a series of bipartisan policy options in late 2014 to improve the quality and efficacy of publicly and privately financed long-term support services. Read the white paper here to learn more and follow their work @BPC_Bipartisan.

Let’s hope they can get their arms around this issue. Until they do, I’ll continue guiding families to the resources they need, until I need the same support, at age 84.

©2014 Circle of Life Partners, LLC. All rights reserved.

More Boston Seminars on Aging Parents: Navigating the Journey

by Jan Simpson Benvenuti

The fall has been busy as our Aging Parents seminars that bring the experts and families together continue to grow in popularity. My last two public programs offered in Boston for 2012 are noted below. I hope that you or your colleagues can join me.

Two weeks ago, I spoke to an overflow crowd of Harvard-educated executives as they shared their stories about navigating the aging journey with their parents and reflected on how to improve programs for employees within the organizations they lead. Last week, I moderated a panel in Wellesley, MA to help families better understand how to care for their older loved ones and themselves as they juggle work, family, and other responsibilities. This week, I’ll be moderating a program hosted by the Women’s Bar Association in downtown Boston on Thursday evening that is open to the public. And, on Saturday November 3rd, I’ll be speaking in another public event in Boston at the National Association of Healthcare Advocates’ Conference. If you have a personal interest in attending one of these programs on Aging Parents or if you know others who would benefit from expert advice for the price of a latte and a snack, please plan to attend if your schedule permits. Both events require registration, but last-minute registrants are welcome.

  • Thursday, October 25th at Baystate Financial, 200 Clarendon Street, Boston @ 5:30 p.m. Click here to register.

The Women’s Bar Association of Massachusetts is hosting this informative evening on Aging Parents: Navigating the Journey ™. As moderator, I will be joined by Martha Payne, Financial Advisor, Baystate Financial Services; Dianne Savastano, Principal, Healthassist; and Kristin Shirahama, Esq., Partner, Rosenberg, Freedman & Goldstein LLP. Proceeds from the sale of my book Don’t Give Up on Me! will be donated to the WBA’s Elder Law Project.

  • Saturday, November 3rd at the Hyatt Regency in Boston @ 11:30 a.m.  Click here to register.

The National Association of Healthcare Advocacy Consultants will hold its fourth annual conference in Boston. This three-day conference includes medical professionals and experts convening to discuss The Leading Edge of Reform: Roles and Goals for Healthcare Advocates. The Saturday program is open to the public for $25. My session will include a mix of families and the healthcare professionals who advise them. All workshop participants will receive a free copy of Don’t Give Up on Me!

I’m grateful that so many professionals donate their time and expertise to our educational programs. We are planning the 2013 calendar now, so stay tuned as we host programs in cities across the country.

 

© Circle of Life Partners LLC

 

Aging Parents: Navigating the Journey Seminars

Our mission at Circle of Life Partners is to provide the knowledge families need to navigate the aging journey with elders successfully. This month, I’m taking our program to executives at the Harvard Business School reunion, families in the town of Wellesley, MA and attorneys at the Women’s Bar Association. See below for the incredible people who will join me to share their experience and expertise with others.

On the Road Again…

Harvard Business School (not a public event)

Saturday, October 13th, 2:30-3:45 p.m. Aldrich 107

Executives attending their 25th through 45th reunions will participate in a discussion about the key decisions and resources available to navigate the aging journey with older loved ones. The panelists will include Rich Redelfs, General Partner, Foundation Capital LLC,; Jane Beule, Owner of Griffin Black, Inc., a financial advisory practice; and Ken Bacon, retired EVP of Fannie Mae’s $193 billion Multifamily Mortgage Business and Advisor to Stanford’s Center on Longevity. Follow me on twitter at @colpartners as I moderate the panel.

The following week, I’ll be moderating a public forum in Wellesley, MA sponsored by Princeton Alumni of New England (PANE), the Wellesley Free Library and the Wellesley Council on Aging. This program continues my series of public events that bring together local resources and families. The profits from any copies of Don’t Give Up on Me! sold during that event will be donated to the Wellesley Council on Aging .

Wellesley Free Library – A Free Public Event – Click here for more information.

Wakelin Room, 530 Washington Street, Wellesley, MA.

Wednesday, October 17th 7:00p.m. to 9:00 p.m.

The theme for this free public event is “Caring for Our Parents and Ourselves.” The panel will include four speakers: Dianne Savastano, RN, MBA and founder of Healthassist who will share tips for navigating the health care system; Jim Reynolds, CEO of Caring Companion Home Care, who will help families understand how to select a home care agency; Dr. Anne McCaffrey, Chief Medical Officer of the Marino Center for Integrative Health and Debra Brothers-Klezmer, BSN, who will share strategies for reducing the stress that often accompanies family caregiving.

If you’re in the area, stop by for what’s sure to be an informative and engaging conversation. No registration is required.

Dianne Savastano will join me on the road again the following week as we provide another program for the Women’s Bar Association of Massachusetts. Appropriately, this event includes panelists who will share cases that demonstrate how legal advice and financial planning can smooth the aging journey.

Women’s Bar Association – Click here to register for the event.

200 Clarendon Street, 19th floor, Boston, MA

Thursday, October 25, 2012  5:30 p.m. to 7:30 p.m.

Joining Dianne and me on the podium will be Kristin Shirahama, Esq., Partner at Rosenberg, Freedman, and Goldstein, who will describe a complex case involving disability and how she helped that family get the financial resources needed to care for that older loved one well through their later years. Martha Payne, a financial planner for Baystate Financial Services will provide guidance for how to prepare financially for the aging journey with one’s parents.

At Circle of Life, we are committed to your health and well-being. Construction of our new website is underway and until it is ready, we will continue to keep you informed about upcoming events through this blog. If you want to be on our  mailing list for a personal invitation, just post a reply.

© Circle of Life Partners

 

 

 

 

 

 

How Much Money Should You Spend on Long-Term Care Insurance?

Two weeks ago Tobe Gerard shared her expertise on long-term care insurance. You may read her post by clicking here. One reader, Beth, posed an interesting follow-up question, reprinted below with Tobe’s response.

Beth: Tobe, thank you for a very informative article. Regarding your rule of thumb “that you should be able to comfortably fit this item into your budget,” can you elaborate why? I know several people who are making budgetary sacrifices to pay for a robust long-term care insurance policy that will enable them to receive high quality care that they can select when the time comes.

Tobe: The main concern for anyone who purchases a policy that takes up an inappropriate portion of his/her budget is that if financial challenges are encountered down the road, he/she might be forced to let the policy lapse; as a result, the advantage of having purchased the coverage in the first place would be lost.

Insurance companies suggest that you don’t spend more than 6-7% of your net income on long-term care insurance. Additionally, I believe that not only should you not spend more than 6-7% of your income on long-term care insurance while you are working, but, more importantly, long-term care insurance shouldn’t be projected to be more than 6-7% of your overall expenses in retirement. Obviously, because of unique situations, this rule of thumb may not apply. In most of these unique situations, a policyholder’s long-term care insurance policy is being paid for by someone else (e.g., a trust fund, employer, etc.).

As far as the purchase of a “robust policy,” it’s important to say that all of us have very different financial profiles when it comes to our assets and income. Some people prefer to self-insure more of the cost of long-term care because they have significant assets and income, and they wouldn’t mind using some of these if/when the time comes. These are the people who usually have high deductibles on their other insurance policies (e.g., automobile and homeowner). Because some people don’t have significant assets and income, they may feel that even a rudimentary policy will provide a buffer before they would need to tap into their retirement portfolio. Additionally, some people are quite affluent and just want the best policy that money can buy, and they don’t worry about the cost whatsoever.

Oftentimes, we find that people who put other things aside to purchase a “robust policy” have particular reasons for doing so. Perhaps they have witnessed firsthand a long-term care claim where there was no long-term care insurance in place and they have seen how it has devastated their family, both emotionally and financially. Furthermore, some may choose to put other things aside to purchase a “robust policy” if they fear they may potentially have some kind of cognitive impairment in the future.

I hope this answers the question. If you have any additional questions about long-term care insurance, please post them here.

©2011 Circle of Life Partners™

Do You Need Long-Term Care Insurance?

by Tobe Gerard

I work with people to help them decide if long-term care insurance is right for them. I do this by focusing our conversation in three distinct areas, which then allows me to suggest a course of action.

People have different reasons for considering long-term care insurance. For some, it’s the recommendation of their financial adviser or attorney. For others, it’s because they have been the caregiver for an aging parent or a terminally ill spouse.

Every person has a different financial profile. For those on a tight budget, a bare-bones policy may be suitable. For others who are affluent, a generous policy with lots of bells and whistles may be appropriate.

In addition, it is important to take health status into consideration. People in good health will have no trouble securing long-term care insurance while those with health problems may find their options to be limited.

What is long-term care?

Long-term care is the daily care a person requires because of chronic illness or disability. It is an ever-changing array of services aimed at helping people to compensate for limitations in their ability to live independently. It can range from needing assistance with household chores to requiring highly skilled nursing care. It can be delivered in one’s home, in an assisted living facility, in an adult day care center, or in a nursing home.

What is long-term care insurance?

Long-term care insurance is a form of insurance that transfers the risk from you to the insurance company. As with other forms of insurance, a premium is paid. Many levels of care are funded should you become unable to care for yourself.

Is long-term care insurance necessary? Why is it so important?

Consider the following facts:

• Currently, the cost of nursing home care in New England can be upwards of $300/day.
• Medicare does not pay for long-term care.
• People are living longer today than at any other time in our history. The fastest growing segment of our population is over age 65.
• Many women, once the primary caregivers to family members, are now in the work force because families depend upon two incomes.
• Seventy-six million baby boomers are aging fast.

Is long-term care insurance right for everyone?

Not everyone is a good candidate for long-term care insurance. If you have limited assets, Medicaid and community-based programs may be better suited to meet your needs. On the other hand, if you have assets to protect, long-term care insurance is probably the best option for you to pursue. My rule of thumb is that you should be able to comfortably fit this item into your budget. However, if purchasing long-term care insurance is going to impact your lifestyle (e.g., take away your only vacation for the year), this purchase may not be right for you.

Long-term care insurance can keep many families from being financially devastated if confronted by a long-term illness that requires assistance with daily care. Long-term care insurance allows you freedom of choice so that you will not have to rely upon the government for help with long-term care. Long-term care insurance is a sensible and cost-effective way for many people to protect themselves so that they can remain independent and not feel like a burden to their family members. Long-term care insurance is one of the most nurturing gifts that parents can give to each other while also sharing a loving gift with their children.

At what age should I purchase long-term care insurance?

The majority of people who purchase long-term care insurance are between the ages of 55 and 64, although the premiums are less expensive for younger people in good health status. Oftentimes, people in their 40’s are motivated to purchase long-term care insurance if they have a parent who has had a diagnosis of cognitive impairment.

Do you have questions about long-term care insurance? If so, post them here, and I will provide you with answers.

©Circle of Life Partners™

In the Sandwich? Seven Favorite Sources of Information

by Jan Simpson

To keep informed, I read, tweet, meet experts, attend conferences, and talk with people who provide medical, legal, financial, housing, and home care services to families. I also spend time with entrepreneurs who are launching businesses to help seniors age in place safely.  Along the way, I’ve accumulated a list of favorite information sources.  Here are seven.

#1 Favorite Blog: The New Old Age: Caring and Coping (The York Times) provides timely stories and electronic links to resources. If your family is actively caring for an older loved one, this site is worth bookmarking. Click here.

#2 Favorite Physician Leader #1: Dr. Atul Gawande whom I call the Justin Bieber of medicine, is a surgeon, writer, and an advocate for change in the way hospitals deliver care. He is considered a thought-leader, someone to follow if you have an interest in peeking behind the quality problems in hospitals. Caution: you may never leave a loved one alone to navigate hospital care again. Read his latest article here.

#3 Favorite Physician Leader #2: Dr. Servan-Schreiber turned his own experience with brain cancer into a campaign to help others prevent cancer or a relapse. If you have an hour, listen to his story here. Dr. Servan-Schreiber has teamed up with the MD Anderson Cancer Center in Houston, Texas to finance scientific studies that will evaluate the benefits of specific foods and activities such as yoga on cancer care. Neither the government nor the pharmaceutical companies will fund this research, so he is asking for donations from individuals and foundations. Watch this short video to learn more.

#4 Favorite Foods/Spices for Healthy Aging: Blueberries, Celery, Parsley, Turmeric and more. Click here for a full list.

#5 Favorite Book about Health Care: Overtreated by Shannon Brownlee explains how Americans are being subjected to unnecessary medicine in many parts of the country.  After you read Overtreated, reflect on the advice of gerontologist Dr. McCullough (author of My Mother Your Mother)—embrace “slow medicine”— and you’ll know how to support older loved ones.

#6 Favorite Radio Network: I have found podcasts on the Aging Smart Radio Network helpful. Here is one about long-term care insurance. Click here.

#7 Favorite Way to Find Information: Twitter

If you’re not on twitter, check it out. It’s simple to use and easy to find tips, resources, news, and people on a myriad of topics. Or, just follow me at @colpartners and I’ll do the research for you.

Do you have any favorite information sources?

©Circle of Life Partners™

Confused about Long-Term Care Insurance? Ask an Expert

by Jan Simpson and Tobe Gerard

Jan:  Since publishing Don’t Give Up on Me!, I have had dozens of conversations with adult children about their aging parents and the financial challenges of paying for elder care. The “sandwich” stage of life can quickly overwhelm families and deplete resources.  One way your parents and you can plan for the expenses associated with long-term care is to purchase long-term care insurance. As you know, I have no financial relationship with insurance brokers but I do have an interest in providing you with unbiased information from trustworthy experts. I’ve invited Tobe Gerard to be a guest writer and to share with us periodically her expertise about long-term care insurance.  Tobe has 30 years of experience in the insurance business and is highly regarded by her clients. Among her many commitments, she serves on the faculty of the National Alliance and educates insurance agents nationally. You may learn more about Tobe here.

I asked Tobe how she became such an advocate for long-term care insurance.

Tobe: I am a Baby Boomer and I’m living the life of so many Baby Boomers who are dealing with their aging parents. I believe that there is no other insurance protection available that can do more for families than adequate long-term care insurance. Why?

  • I have seen estates depleted. Very few people can fully self-insure the costs associated with an extended long-term care situation.
  • I have seen healthy spouses become so exhausted from taking care of their impaired spouses that they appear to be on death’s door themselves. One third of the “healthy” spouses actually die before the spouse for whom they have been the caregiver.
  • I have seen siblings argue mercilessly. Painful things can be said when one is exhausted physically and emotionally.

I’ve experience this personally and I’ve witnessed this professionally. That’s why I am passionate about educating people about the importance of long-term care insurance.

Jan: How would I know which long-term care insurance company is best for me?

Tobe: Here is what I tell my clients to consider.

1.  How long has the company been selling long-term care insurance? If the answer is less than 15 years, I’d want to be sure that they have other strong points in their favor. Longevity is important. The longer a company has been writing insurance long-term insurance policies, the more they’ve paid claims, have a sense of their lapse ratio, and have sound medical underwriting practices.

2. How important are the financial ratings of the company? Several rating services such as A.M. Best, Standard and Poors, Moody’s, Fitch, and Weiss, review insurance companies. I tend to use the Comdex which combines the ratings of all five services on a scale of 1 to 100. I try to work with companies that have a Comdex rating of 80 or above. You always want to use a company that has at least an “A” rating; an A+ or A++ is better. A “B+” or “B” may have been a good grade in high school, but it is not a good grade for an insurance company. Click here to see a list of insurance companies and their ratings.

3. How do prices compare among long-term insurance companies? If you get quotes from 4 or 5 companies, you may see some difference in premiums.  Avoid any company that charges half of what others are charging.  Many firms enter the long-term care insurance market with low pricing to “buy” business and then exit the market within a few years because their pricing wasn’t based upon sound principles.

4. Does the company have a reputation for aggressive rate increases? This is a difficult area to comment on because it seems that many of our tried-and-true long-term care insurance companies are filing for rate increases. I would suggest considering companies that have had reasonable rate increases rather than aggressive rate increases. Ask your agent what has been the rate increase history of the company or companies you are considering.

According to Tobe, the best time for adults to purchase long-term care insurance is between the ages of 55 and 64, when premiums are low and before a change in health may make one ineligible for insurance.

Do you have questions about long-term care insurance? Post them on our blog, Facebook or Twitter.

©Circle of Life Partners™

Summer Reading for A Cause

Dear Friends,

The Fourth of July weekend is a wonderful time to relax with family and friends by the shore, near the lake, or around the barbecue at home. To thank you for your support this year, I am offering a 20 percent discount for Don’t Give Up on Me! during the month of July. This discount is available only on purchases made through my blog, Don’t Give Up on Them.

 

As you may know, we donate all profits from book sales to innovative non-profit organizations that support elders or their adult care partners. Thus far, we have made donations to the Alzheimer’s Association, the Marino Center for Integrative Health, the Women’s Health Initiative at Brigham and Women’s Hospital, and the Memoir Project at Grub Street.  We have a long list of organizations that do outstanding work with elders and their families; it is our hope to support them as well.

My best wishes for a weekend filled with joy and laughter.

©Circle of Life Partners™