When a loved one needs Elder or Long Term Care it can be frustrating to find answers.  Because of this www.LifeInsuranceThinkTank.com has put together a short list of expert resources for you to build your knowledge and understanding of the assistance that is available to you.  By all means, this list of 7 web sites is not a complete list.  Each site links to other resources and agencies it will help you begin to find the information you need to answer the questions you will have.

To See the full list CLICK HERE

www.benefitCheckUp.org

A free online site maintained by the National Council on Aging.  Here you can enroll in federal, state, local, and private programs to receive aid to help pay for some health care, some living expenses, and several other needs. It lists over 1500 public and private benefit programs from all 50 states.

www.eldercare.gov

A service provided by the National Association of Area Agencies on Aging that will help you find information on state and community resources for older persons and caregivers.  800-677-1116.

www.caregiver.org

A well maintained site with information for caregivers. This site offers information, resources, and support for family caregivers of older or disabled adults. It is searchable by state to identify programs, legal resources, and specific disability organizations.

www.nahc.org

The National Association for Home Care trade site for home health care agencies, hospices, home health care aides, and medical equipment suppliers. There is a complete section that will help a consumer search and choose a local home care provider.

www.nhpco.org

This is run by the largest non-profit hospice and palliative care organization, The National Hospices & Palliative Care Organization. Tons of information and links to additional resources that will help find a local hospice provider.

www.aoa.gov

This is the U.S. Department of Health and Human Services web site for the Administration of Aging. Here you can find numerous publications, news, and information for older adults.

www.alz.org

This is the National Alzheimer’s Association web site providing information and support services to families and individuals dealing with Alzheimer’s disease.

Please continue to educate yourself in any way you can to find the best care for your loved ones as they need elder or long-term care.  Life Insurance Think Tank does not endorse this list as the only web sites available to assist you in finding help and education for your specific needs.

According to the Internal Revenue Service, tax-qualified LTCi premiums are considered a medical expense. For individuals who itemize tax deductions, medical expenses are deductible to the extent that they exceed current amount required to meet the individual’s Adjusted Gross Income (AGI). 

The amount of the LTCi premium treated as a medical expense is limited to the eligible premiums, as defined by the Internal Revenue Code 213(d), which is based upon the age of the individual. You are able to take up to the limit defined by your age as the medical expense.

Individual taxpayers can treat premiums paid as tax-qualified LTCi for themselves, their spouse, or any tax dependents as a personal medical expense.  See the table below for the yearly maximum deductible limit per individual policy owned.

2013 Long Term Care Insurance Federal Tax Deductible Limits

Source: IRS Revenue Procedure 2012-41

Many people who do their own taxes may be unaware of this deduction.  It’s also common for many people to wait to discuss long-term care insurance until they have health risks preventing them from qualifying for coverage.

The best time to buy Long-Term Care Insurance is when you are healthy and young.  The younger you are the less expensive it will be.  With the newer insurance products available, there are numerous other types of products that provide long-term care protection.  No matter what your age, any licensed Retirement Life Solutions Specialist can discuss your options and provide the best solution for your specific situation.

What is Life Insurance?

Cost of Life Insurance?

The information presented in this article is not offered as tax advice. Examples of tax benefits shown are based upon the United States IRS Code listed. You should consult with a professional tax advisor regarding your specific situation.

Because of the true cost of long-term care to someone that needs it; insurers have increased LTC polices substantially over the last few years.  Several companies have pulled back and just as many have left the market completely.

Even though fewer companies are selling LTC insurance, the need for long-term-care planning remains greater than ever.  Today, there is a great deal of attention that is being focused on the aging of the population. As the Baby Boomer generation begins to reach retirement age, people are starting to realize that there may come a time when they could need assistance due to declining health or ability.

Because of increased life expectancy, many people will live 20-30 or more years beyond their normal retirement age. Yet, while they may be living longer, this does not necessarily mean that they will be living healthier. Therefore, from a financial standpoint, it is imperative that people plan ahead not only for basic living expenses in retirement, but also for the high cost of long-term care. From a retirement standpoint, a long-term care event is one of the few things that can really put a dent in someone’s retirement plan.

For those people who are looking to buy some sort of long-term care coverage, there is now more choices available then traditional long term-care insurance.  There are hybrid products that combine life insurance and long-term care coverage.  Several of these hybrid policies have a complete Return of Premium to the owner should they decide to cancel the policy before they use the long-term care benefit or have died.  There are single premium life insurance products that allow the owner to tap the death benefit while alive, as a living benefit, to pay for long-term care.  With both of these policies, if the LTC benefit is not used, the death benefit is paid to the beneficiary.

Finally, with the cost of long-term care increasing it may not be affordable to buy a policy that covers 100% of the expected daily expense.  That is the beauty of a long-term care insurance policy; it can be created for just about any amount of daily benefit that is affordable.  This allows the owner to share in the cost of future long-term care events if they occur and at the same time pay a lower premium for the reduced benefit.  Remember, having some long-term care insurance is always better than having none.

Speak with a Retirement Solutions Specialist to learn more about what are the best options for you.

What is Life Insurance?

Cost of Life Insurance?

As a policy holder you have several choices. Currently, 70% of the people over 65 years of age here in the USA need some type of LTC care.  According to the U.S. Census Bureau, in 2010, 66% of nursing home residents were women, and only 16% of all residents were under the age of 65. The median age of residents was 82.7 years.  You purchased this protection so that you didn’t place a financial and emotional burden on your family.  So you are left with several choices which you may not know you had. 

1. Accept the price increase and just pay the new premium.

A price increase means that the company has to keep up with the increasing cost of long-term care coverage.  While this may sound discouraging to you, it may help to look at it from another view point.  If you were to buy your current policy at your current age, it would cost you significantly more than the new premium with the current increase. 

Additionally, you may not be able to purchase the same features and benefits that are in your current policy.  So, while the new price is higher than it was last year, it is still is a significant savings over what you would have to pay if you were to buy it today.  If the coverage is still affordable to you and you still want these features, this may be your choice.

2. Keep the current premium and reduce the policy’s daily benefit amount to the extent necessary to bring benefits in line with cost (e.g., from $250/day down to $200/day)
3. Keep the current premium and reduce the policy’s benefit period to the extent necessary to bring benefits in line with cost (e.g., from a 5-year benefit period down to 4 years)
4. Keep the current premium and reduce the policy’s benefits inflation rate (if the policy included an inflation rider) to the extent necessary to bring benefits in line with cost (e.g., from a 5% inflation rider down to a 3.5% inflation rider)
5. Cancel the policy

If you decide that the premiums are not affordable, or you do not need the original level of coverage, then you could choose options 2-4 above. These options will maintain your long-term care and at the same time reduce your annual premium.

Most people choose to decrease their benefit period especially if it is longer than 5 years.  Many policies sold 10 or more years ago may have been sold with lifetime benefits.  According to the Genworth 2012 Cost of Care Survey, the average length of stay in a long-term care or assisted living facility was 2.8 years.  In fact, most claims are even shorter than this. So if you believe that you will not need coverage for more than 3- years you may choose to reduce your benefit length to 3- years and reduce your premium this way.

Your current policy may have an inflation rate rider on it.  If you have had the policy for 10 or more years, you may have already received the most leverage on the rider.  You also want to consider your age, the older you are it may be more appropriate to reduce the inflation rider than if you were younger.  If you are younger than 50 years old, you would still want to gain the inflation protection from several more decades of inflation that your rider provides.

The final option would be to reduce the daily benefit amount.  Most clients initially purchase the amount of daily benefit that they can afford at that the time they buy. The daily benefit is typically barely enough to cover the actual amount that LTC will actually cost.  For these reasons, it should be the last area to attempt to reduce the cost of long-term care.

This really is the choice of last resort. As I mentioned earlier, if it is simply unaffordable and none of the above choices reduce the premiums to affordability, then the last resort is to cancel.  The only other reason to cancel the policy would be if your financial means had increased so substantially that you were able to pay all the costs of any long-term care form your own assets (self-insuring).

No one likes to get a notice of increased cost for something they own, especially a long-term care insurance policy. If you do receive an increase in your long-term care policy make sure you contact a Retirement Solutions Specialist to discuss your options.  Besides helping you with the decisions above, there are several newer products on the market today that they can educate you on.  Because of these newer products design, you may benefit from them in the long run.

What is Life Insurance?

Cost of Life Insurance?

Because of increased life expectancy, many people will live 20 or more years beyond their normal retirement age. Yet, while they may be living longer, this does not necessarily mean that they will be living healthier. Therefore, from a financial standpoint, it is imperative that people plan ahead not only for basic living expenses in retirement, but also for the high cost of long-term care.

There are three primary methods of insurance yourself for long-term care costs

Self-Insurance as an Option

To do this you must have sufficient income to pay the rising costs of long-term care. Keep in mind that even if you have sufficient resources to afford long-term care now, you may not be able to handle rising future costs without drastically altering your lifestyle.

The Medicaid Option

Medicaid is a joint federal and state program that covers medical bills for the needy. If you qualify, it may help pay for your long-term-care costs. Unfortunately, Medicaid is basically welfare. In order to qualify, you generally have to have few assets or will need to spend down your assets.

Your resident State law determines the allowable income and resource limits. If you have even one dollar of income or assets in excess of these limits, you may not be eligible for Medicaid.

It is critical that you meet with a tax planner and a retirement life solutions specialist to ensure that you follow the specific laws of your state in advance of expecting to file for Medicaid.  Most states will look back 5-7 years on the assets you held and if you sold or transferred them during that time period, then they may elect to include them in your current asset valuation.

Long-Term-Care Insurance

A long-term-care insurance policy may enable you to transfer a portion of your liability of future long-term care costs to a long-term care policy issued by an insurance company in exchange for the regular premiums.

Most long-term-care insurance policies benefits may be used to help pay for skilled nursing home care, assisted care living facilities, continuing care retirement communities, in-home care, and adult day care. The main requirement is that you cannot perform 2 of the 6 Adult Daily Living skills (ADLs). These ADLS are bathing, mobility, dressing, transferring, toileting, eating, and the need for supervision.  Insurance can help protect your family financially from the potentially devastating cost of a long-term disabling medical condition, chronic illness, or cognitive impairment.

A Recent Alternative

Long-Term-Care Riders on Life Insurance

Something new that most universal life insurance policies may now include is a long-term-care rider.  These riders will provide a living benefit — usually a percentage of the face value — to help cover the cost of long-term care. By speaking with a Retirement Life Solutions Specialist, they can provide you with the full coverage of any of the policies you are investigating.

Source:

Life Insurance Think Tank. (2012) The Truth About Long-Term Care [White Paper] Retrieved from eSeries Here

What is Life Insurance?

Cost of Life Insurance?

The original long term care policies that were sold prior to 2005 were not Partnership Certified. This means that for the government Medicaid program to pay for someone’s long-term care expenses, the person would have to be impoverished, i.e. poor.  If they had assets then they would have to spend those assets first and become impoverished before Medicaid would cover them.  But what happens to the spouse of the person with the long-term care expenses?  They are now poor and have to drastically downgrade their previous level of living just because their spouse needs state assistance.

Since the passage of the Deficit Reduction Act in 2005, most states are allowing their residents to keep more of their assets if they own a government approved long-term care policy.  These policies are sold by insurance companies and are called Partnership Certified in the contract. 

These policies are almost identical to the pre-2005 long-term care policies, except they must include consumer protection for inflation.  In these policies, for every dollar that you have of maximum overage in your policy, you are entitled to keep a dollar of your own assets should you ever need to apply for state Medicaid to help pay for your long-term care expenses. This helps prevent you from becoming poor and lowering your standard of living for your family and loved ones.

For example:

Mary’s long-term care partnership certified policy would pay her a maximum of $300,000 of benefits in her lifetime.  Mary enters a long-term care facility and her long-term care policy runs out after paying $300,000 in benefits to the facility.  She and her husband Robert have $400,000 in savings.  Now they are required to spend $100,000 to provide care for her before she can apply for state Medicaid aid to help with her long-term care expenses.  The state disregards the first $300,000 of their assets when determining her eligibility. Because her policy was partnership certified, Robert does not have to become poor and change is level of living to obtain help from the state.  Even when Mary passes away, Robert’s remaining assets are protected from “estate recovery” from the state’s Medicaid program.

Currently only 6 states have no partnership documentation available for insurance companies to provide these LTC policies.  Four more have pending state applications and the rest of the states in the nation have partnership certified policies for sale by carriers licensed in each state.  Your Retirement Solutions Specialist can educate you on how these plans can benefit your specific situation.

What is Life Insurance?

Cost of Life Insurance?

What are the chances in your lifetime that you will need some form of long-term care medical assistance either in at an in-patient facility, part-time during the day, or even at home? If you were to need long-term care, would you be covered? Most people would not. 

The great majority of Americans today have the false perception that they will never need long-term care.  However, according to current statistics, 70% of those of you over 65 years of age will need some form of long-term care at least once in your lifetime.  An additional 43% of you will spend some time in a long-term care facility with 21% of you staying in that facility 3-years or longer.¹  Finally, 43% of those in the U.S. needing long term care today are under age 65².

So while your expected perception may be that you won’t ever need long-term care, the facts suggest otherwise.  To make matters worse, today it costs about $78,000 annually for a private room in a long-term care facility.  What will it cost 20, 30, or 50 years from now?

Once someone enters a long-term care facility, the average married couple exhausts their savings after just 13 weeks. Within two years, 90% of those married couples will be bankrupt.

But what about Medicare and Medicaid, won’t they help?  Medicare only pays for long-term care if you are admitted to the facility within 30-days after a hospital stay of at least 3-days.  Then only the first 20 days are covered at 100%.  During days 21-100 you pay $144.50/day ($11,415).  After 100 days, Medicare will not pay anything towards your long-term care needs.

Medicaid on the other hand is even more difficult to get coverage. To get Medicaid coverage you must be impoverished by your state’s definition.  Commonly you can’t own any assets except for your car and your home.  Even then the home is “seconded” to the state Medicaid program to pay back the money that is “loaned” to you to pay for your long-term care assistance.  This money is not a gift and must be repaid out of your estate.   Obtaining Medicaid coverage for long-term care should be discussed with a tax advisor because of the numerous laws and rules that are could cause Medicaid coverage to be prohibited.

What are your options?

The best option is to buy Long-Term Care Insurance to protect your assets when you are healthy and young.  The younger you are the less expensive it will be.  Besides traditional long-term care insurance, there are numerous other types of products available to you to help protect your assets.  No matter what your age, any licensed Retirement Life Solutions Specialist can discuss your options and provide the best solution for your specific situation.

Your long-term care costs can present a significant challenge to your family.  By planning in advance you can protect your assets and more importantly, you can protect your family from serious financial and emotional burdens.

1. 2012 Field Guide, National Underwriter

2. National Care Planning Council, retrieved here, Accessed 1-20-13

What is Life Insurance?

Cost of Life Insurance?

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