The Guide to Long-Term Care Insurance

by Tobe Gerard, CLTC, MBA, MLS, LIA

We believe that the best all around consumer guide for long-term care insurance that is not state specific is A Shopper’s Guide to Long-Term Care Insurance. Unfortunately, it is not updated every year so we are extremely excited that it has just been updated for 2019 and is now available. This consumer-friendly guide was written and published by the National Association of Insurance Commissioners. We hope that you will find it valuable. Use it as a starting point for the conversation about long-term care and long-term care insurance with your financial planner or insurance agent.

For context, a study of 200,000 claims by PricewaterhouseCoopers found the current average cost of long-term care services is $172,000 for a person who needs assistance with at least two activities of daily living or has some cognitive impairment.

Since 2000, Tobe has committed her professional life to helping people manage the risk of needing long-term care.

Reprinted with permission.

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.

Listen to Bipartisan Policy Center discuss Long-Term Care

Lonely adult child and parentby Jan Simpson Benvenuti

On Monday, April 7th at 1pm EST, the Bipartisan Policy Center in Washington, D.C. will host an event to discuss sustainable ways to finance and deliver long-term care services. The numbers are staggering. Today, there are 12 million seniors, veterans and disabled adults who need long-term care support and services; that number will jump to 27 million by 2050. As anyone who has cared for a loved one can attest, the time, energy and expense involved in supporting an ill family member can easily deplete a family’s resources, compromise the health of the family caregivers, and disrupt careers and relationships. Listen to the broadcast here.


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


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™

Long-Term Care Insurance

by Joan DiGiovanni.

When did it happen that I became middle aged? I am startled to think of this, so much so that I took a moment to look up the definition of ‘middle age’ (perhaps I should have just looked in the mirror). According to the Oxford English Dictionary, it is the “period between youth and old age, about 45-60 years old.” Unfortunately, that confirms it.

Issues that were once only my parents’ concern are now my very own. Long Term Care (LTC) insurance is one such topic that I knew nothing about but wondered if it is something I need now or ever will. I was referred to Tobe Gerard a long term care insurance specialist in the Boston area; Tobe sells insurance but only long term care and has been in the business for 30 years. She was kind enough to spend some time with me recently to help me understand it.

According to Tobe, one way to look at LTC insurance is that it is a way to protect your retirement savings from being depleted and gives you peace of mind should you find yourself with a long term illness. This insurance transfers the risk from you to the insurance company in exchange for a premium. The average age today of someone buying LTC insurance is somewhere between 55-64. Keep in mind, the premiums are less expensive the younger you are and if there is a change in health and you do not have coverage, the insurance may not be available.

Generally LTC insurance covers care that your private health insurance company, Medicare or Medicaid do not. LTC is typically needed when an individual is unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating and walking. With many chronic illnesses, long term care is necessary and no one wants to either burden a family member or deplete their life’s saving. LTC insurance coverage includes costs associated with assisted living, adult daycare, home care, nursing homes and hospice.

When considering LTC insurance, first consider your assets. If you have over $70,000 in assets and you are over 50 years old, it might be time to look into this insurance. If your assets are limited, then Medicaid and community-based programs may be more appropriate.

Once you decide LTC insurance makes sense for you, Tobe recommends a 4-pronged approach to determine your coverage:

1. Determine what the per-day cost for care would be adequate in the area you plan to live. Checking with nursing homes and assisted living facilities in that area would provide a good baseline for cost.
2. Factor inflation into the calculation; this is determined by your age when purchasing the policy.
3. Consider the elimination period—it is the period of time where you are paying out-of-pocket expenses before the policy takes effect.
4. Determine the period of time that the policy will pay benefits to you; you can choose any time between 2 years and Lifetime. Sometimes this is decided based on your budget and what is affordable, while other times it is based on your genetic predisposition to certain chronic illnesses such as Parkinson’s or Alzheimer’s.

Ironically, we do not give a second thought to purchasing insurance for our homes and cars but when it comes to protecting our quality of life most often in our final years, the issue is often overlooked. Working with a knowledgeable long term care insurance specialist like Tobe will make these decisions a lot easier. And although I am still on the younger side of that ‘middle age’ spectrum, now is the time to weigh my alternatives.

Have you or your parents purchased long term care insurance? If so, consider sharing your experience.

©Circle of Life Partners™