You Are Not Alone

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Here’s an interview with celebrity Amy Grant, that’s part of Ms. Grant states the need to discuss long-term care with parents is the “elephant in the room”. She also mentions that her parents own long-term care insurance, something that I am certain is helping to make her family’s difficult journey a whole lot easier.

The thing I like most about is the fact it lets caregivers know they are not as isolated as they think they are.

One Article Says It All

Baby Boomer With CaregiverThis February 16, 2015 Chicago Tribune article succinctly hits all the reasons why it is in every insurable, non-poverty stricken Americans best interest to plan for possibly needing long-term care.

Here are some quotes from the article that I especially like.

“While baby boomers had the opportunity to plan for aging, many also had that generation’s impulse for immediate gratification and haven’t saved,” says Lucia West Jones, executive director for the nonprofit Northeastern Illinois Area Agency on Aging.

The numbers back up her concerns.

According to an AARP survey of people 50 or older, 62 percent of workers say they are saving for health-care costs, but 55 percent are worried they may not be able to afford those expenses.

Information from the AARP also states the average 65-year-old couple will need $220,000 for 20 years of post-retirement health-care costs, with Medicare possibly covering little more than half those years.

The U.S. Department of Health and Human Services’ Administration on Aging claims at least 70 percent of people who live to 65 or older will need long-term care services and support at some point when they are elderly.

In the Chicago area, according to a 2014 study from insurance holding company, Genworth Financial, annual costs for full-time home care aides or services are more than $49,000; for adult day care, almost $20,000 per year; almost $60,000 per year for an assisted living facility; and a semi-private room in a nursing home averages more than $80,000; with a private room more than $92,000.”

(For accurate long-term care costs in your locale, click here for Genworth’s Cost of Care Survey.)

Last but not least, I like the article’s acknowledgement that long-term care insurance (LTCi) kept Ms. Fleming’s mother off of Medicaid. She had higher quality care and her family had a less stressful experience because she owned LTCi:

“LTCi kept them off Medicaid.  Even with the long-term care policy, Fleming said she spent months sifting through her mother’s health insurance and Medicare paperwork, providing documentation to the insurer to secure benefits covering her mother’s expenses. No Medicaid was needed to pay for her mother’s care.”

As I’ve said so many times, it is very unfortunate that acknowledgement of long-term care insurance (LTCi) ownership is usually done grudgingly, as an “oh, by the way” mention, hidden deep within the content of stories like this.

Why did this story emphasize that Ms. Fleming needed months to provide adequate documentation in order to collect from Mom’s LTCi? Of course, all claims require proof of need.  But the story doesn’t give us any idea of what took so long to provide. Claims on LTCi are straightforward and not complicated and certainly do not require a great deal of time to complete.

If anyone has questions about how straightforward LTCi claims are, please contact me. LTCi claims are black and white. They are unambiguous.

Why did the author of this article not choose to emphasize the truth? The main point is that substantial amounts of money were collected from Mom’s LTCi: enough money to keep Mom off Medicaid and out of a nursing home.

LTCi…Who Cares?

Ron HagelmanI’ve re-published below my friend and colleague Ron Hagelman’s October 2014 Broker World Magazine column. Ron writes eloquently and from his heart. Plus, he is fun to read. He explains why buying long-term care insurance (LTCi) will always be less about wealth preservation and more about love. The primary reasons my clients buy LTCi are to show kindness, consideration and love to themselves and their families.

Ron has a knack for describing the frustration and concern I experience on a daily basis. Most people refuse to think about what might happen to them in the last years of their lives, so far in the future.

I love you, Ron!

Here is Ron’s column, titled, “LTCi…Who Cares?”:

The frustration inherent in the title is not the point. Surveys continue to point out the obvious: As far as the future of the LTCI industry is concerned, familiarity with the pain and stress of caregiving in America remains the most reliable motivation to buy. The most recent U.S. census information confirms the inexorable progression of an aging population with 13 percent of our population currently over 65, rising to 20 percent by the year 2030. Institutional care has never been the answer. Nursing home populations have decreased by 20 percent since the year 2000. Although the growth of assisted living alternatives has been noticeable, seniors would of course rather receive care at home if at all possible. A report just released by the U.S. Census Bureau, “65+ in the U.S. 2010,” confirms what we already suspected: “90 percent of people older than 50 express the preference to be cared for in their own home.” The problem of course is who will provide that care. In another recent poll, 75 percent of seniors reported they could only identify two people who might help them when the time came that they needed care.

Finding care may be the single largest problem we all will face when the need for care arises. The fact is that roughly 70 percent of all informal care comes from relatives. This is, however, a vanishing resource. According to the new AARP study, “The Aging of the Baby Boom and the Growing Care Gap,” the ratio of potential family caregivers to high risk people in their eighties is falling rapidly. Although seven to one in 2010, it is expected to drop to four to one by 2023, and three to one in 2050. There is no alternative but to shift to more paid caregivers, which will dramatically increase the cost of future long term care. I think we can all agree that perhaps the hardest part of the sales conversation is explaining the real risk and convincing your prospect that, “Yes, this can happen to you!” Improper, misguided and inadequate planning remains our curse. (Amen, Ron!)

Although most buyers claim that protecting assets is their primary motivation for acquiring coverage, the purchase of LTCI is never just about the money. Just as a long term care event is never just about the person needing care—it is about all those family members willing to respond to the problem, which can severely impact their own finances and their careers (including their own health issues aggravated by the stress of caregiving). The bottom line is that attempting to plan for long term care is not simply a financial decision. There are more important questions concerning who will provide your care, in what setting will it take place, to what extent do you plan to involve family members, and from exactly where will the money arrive? Please recognize that it is immediate family, those for whom the insured cares the most, who will bear the burden of care. Eighty percent of the time, informal caregivers are the most immediate family, including spouses, daughters, daughters-in-law, and sons-in-law. Caregiving, especially from spouses, may represent a substantial threat to the caregiver’s health, accelerating their own need for long term care. Usually there is a progression of care from part time assistance to full time maintenance, and as we know, as the need for care increases, the importance of freedom of choice and the quality of that care also increases.

A strong recommendation is to include your anticipated plan for care and available funding dedicated to that purpose in a separate “Care Agreement.” Too often families find themselves thrust into a care event for which no one was prepared. It is estimated that one-quarter of all Americans are currently receiving care. For 10 years this column has attempted to explore why what may represent America’s largest underinsured, under-planned and under-prepared risk remains at the end of the planning conversation instead of at its heart. Too many on both sides of the sale continue to ignore the obvious at their own peril. By not making the risk a required universal recognition and featuring its resolution as a centerpiece of everyone’s planning practice, we unnecessarily jeopardize consumer confidence, agent ethics and company relevance.

Other than that I have no opinion on the subject.

Author’s Bio
Ronald R. Hagelman Jr., CLTC, CSA, LTCP
CLTC, CSA, LTCP, has been a teacher, cattle rancher, agent, brokerage general agent, corporate consultant and home office executive. As a consultant he has created numerous individual and group insurance products. A nationally recognized motivational speaker, Hagelman has served on the LIMRA, Society of Actuaries, and ILTCI committees. He is past president of the American Association for Long Term Care Insurance and continues to work with LTCI company advisory boards. He remains a contributing “friend” of the SOA LTCI Section Council and the SOA Future of LTCI committee. Hagelman is president of Broadtower Insurance Solutions, a national IMO helping BGAs enhance LTCI production. Hagelman can be reached at Broadtower Insurance Solutions, Inc., 156 N. Solms Rd., New Braunfels, TX 78132. Telephone: 830-620-4066. Email: Website:

How Long-Term Care Insurance Can Transform Lives

Edna MartinEdna Martin, Long-Term Care Insurance Specialist

What follows is the true story my colleague, Edna Martin, of Seattle, was kind enough to share. In so doing, we hope we will help others understand the transformative difference long-term care insurance ownership can make in peoples lives.

“My parents were beginning to have trouble living independently, primarily because my mother was in the beginning stages of dementia.   She had a second aneurism when she was 70. From that point forward, although she recovered she was never quite the same.  Slowly over time, she became more and more dependent on my father.  She had trouble remembering things and her ability to walk was becoming affected.

As time went on, my father was becoming overwhelmed with caring for my mom, and my husband and I often had to run over to their house to help them.   At that time, my parents were in their early 80’s.  We decided it would be easier for everyone if we combined households and had them live with us so we could be instantly available to help.  My husband remodeled our house into two separate living units – each had its own kitchen, living room and bedroom.  Plus, we installed a chairlift so that my mother, if she became completely wheelchair bound, would have a way to get out of their unit.  A couple of years later, we were grateful for the lift since she completely lost her ability to walk.

Having them move in with us meant I was going to have to change how I earned a living. I knew I would have to take time off to assist my folks. I chose an insurance career because it provided me with the flexibility to control my schedule. At first I sold life, disability and long-term care insurance (LTCi). I didn’t know anything about LTCi; it was just something that was part of my portfolio. However, it didn’t take me long to realize that LTCi could be a life changer for families like ours. The more I read about it, and the more emergencies that befell our household, the more I realized the importance of owning it.

Early one beautiful Sunday morning, my dad was lifting my mom out of the car into her wheelchair.  He got her right up to the front door of their church only to drop dead from a heart attack. Suddenly, I became my mom’s primary caregiver. I couldn’t work at all because I had to assume all of my mother’s care. It was the toughest job I’ve ever had. We were scrambling every week to make ends meet while caring for someone who couldn’t perform 5 out of 6 Activities of Daily Living (ADL’s) and had dementia. We were forced to make decisions during a time of crisis.

To replace my father we hired help 8 hours a day, 7 days a week and were spending close to $5,000 a month this way. That left us 16 hours a day with no help! My mother didn’t have enough funds to cover that cost herself so we supplemented it with our own funds which completely halted (and reversed) our retirement savings. Plus, I had to stay home to help with her care, further compounding the cost in lost income. I never knew if a caregiver was going to show up or not—and if they didn’t, it was up to me. If I’d known about LTCi when my parents were younger I would have insisted they purchase it.

Having a policy would have provided the funds to get care in much sooner, thus alleviating the strain off my dad.  As a caregiver, I realized how much my dad had taken on.  I experienced a tremendous amount of physical strain lifting my mom, dressing her, cleaning and feeding her.  We couldn’t go anywhere and were virtually housebound, which meant we could never get a break.   I was lucky that my husband was so supportive and that I adored my mother who was sweet and loving throughout that time.  The year that followed caring for my mother was one of the most profoundly moving years of my life.  However, physically I was hurting and eventually was forced to relinquish her care to a nearby facility where they had the manpower to care for her 24 hours a day.  We visited her nearly every day of the 3 ½ years she was there until her eventual death at 91.

My husband and I consider LTCi ownership to be an essential part of our well-being.  It is also a gift to our daughter so she never has to be faced with what we went through.”

The Distilled LTCi Facts

DistilledBig thanks to Margie Barrie, long-time colleague and friend, for the following insights that “sum it up” for long-term care insurance (LTCi). The information below came from an article Margie recently wrote for LifeHealthPRO.

1. 73 percent of claimants are receiving benefits outside of a nursing home:

  • 49 percent: Home health care.
  • 24 percent: Assisted living.
  • 27 percent: Nursing home.

2. 21 percent of claims are expected to last five years or longer.

3. What are the odds of needing long term care?

  • 58 percent of men ages 65 and over will need care, for an average of 2.2 years.
  • 79 percent of women ages 65 and over will need care, for an average of 3.7 years.

4. Assisted living facility, average length of stay: 21 months. 

5. The average premium for a stand-alone LTCI policy is $2,400. That’s 3 percent higher than it was a year ago.

6. 92.3 percent of buyers are buying policies with elimination period of 90 to 100 days. 

For clients who want to dive deeper

6. Medicaid: $117,240 is the maximum amount of assets that the federal government will let a healthy spouse keep before the other spouse can be eligible for Medicaid long-term care benefits. (Many states set the cap at a lower level.)

7. Lapse rate for LTCI policies:

  • 1 percent is the estimated lapse rate for stand-alone LTCI policies.
  • 0.5 percent is the estimated lapse rate now being used by Genworth in its projections.

8. 4.5 years is the average length of time someone lives after being diagnosed with dementia.

9. Claims length:

  • 42 percent of claims last less than one year.
  • Claims lasting less than year are usually for home health care and caused by falls.
  • The average length of claim that lasts more than a year is four years.

10. Claims: How much?

  • $7.5 billion of LTCI claims were paid in 2013.
  • Over $5.2 million was paid each business day.
  • 273,000 people received benefits.

11. Claims: Who’s getting the benefits?

  • 71 percent of the benefits dollars are paid to female claimants
  • 51 percent of the benefits are paid to claimants with mental disorders, including dementia.

12. Claim records (from Genworth):

  • 27 is the age of the youngest person to go on claim.
  • 103 is the age of the oldest person to go on claim.
  • About 20 years is the length of the longest claim.
  • $1.3 million is the amount of benefits paid in connection with the biggest single claim.

13. Age of buyers:

  • 24.7 percent are between the ages of 45 and 54.
  • 54 percent are between the ages of 55 and 64.
  • 57 is the average age of applicants.

14. In 2011 and 2012, 67 percent of nursing home residents were female.

15. The number of people using long-term care services:

  • 15 million: The number of people in the United States using nursing homes, alternative residential care or home-care services for LTC needs in 2000.
  • 27 million: The number of people in the United States who are projected to be using nursing homes, alternative residential care or home-care services for LTC needs by 2050.

16. Demographics:

  • 40.2 million: The number of Americans ages 65 or older in 2010.
  • 88.5 million: The projected number of Americans ages 65 or older in 2050.

17. Burden on unpaid caregivers:

  • 80 percent of long-term care is provided by unpaid caregivers at home.
  • 67 percent is the approximate percentage of unpaid caregivers who are female.
  • 67 percent of the people who plan to have a loved one provide care, haven’t asked the loved one.