Comments on: Long Term Care Insurance – You Don’t Need It As Badly As The Insurance Companies Say You Do

By: dwight

dwight — Fri, 20 Nov 2009 03:20:13 +0000

Craig,

Regardless of age, an agent must always pay attention to the needs and goals of the individual. That alone will result in a win-win. One bad apple…
It seems your mom is in good hands, which is why it’s so important for family to be involved with such decisions as it truly impacts everyone. Good for you!

By: craig

craig — Thu, 19 Nov 2009 21:42:15 +0000

Dwight Thank you for your response, I do not mean to be combative in any way towards Bankers Life, however there were several red flags that came up after their cold call on my mother. In regards to the LTC policy, first she already had a policy with them that they were replacing with one that was “Better for her” I reviewed both policies the new and the old and there didn’t seem to be any difference in them except for the new premium that was over 2.5 times greater. No inflation coverage on either policy. The max daily benefit is only $100/day and about $94.00/day for home care. That hardly seems like it would be enough in California.
The second red flag was the portion of the underwriting application that you mentioned I believe that this includes the 4 page needs assessment, It asks a lot of personal questions including her annual income. The salesperson filled this all out without asking my mom anything. My mom has a very limited income maybe $20,000 annual at most including social security. The salesperson filled out the application for her and stated her income at $50,000. Also that it is not going to change over the next 10 years and that her assets other than her home would not change either. These were false statements. The questions on that portion asking how you were going to pay for the not covered stuff were answered by the salesperson as “from my income”.
I contacted HICAP re all the concerns I have and they have advised me to file a complaint with the state and or feds about the tactics of Bankers Life. I like the fact that the insurance industry is very regulated, especially when it comes to seniors. I think that seniors usually need some protection, because they don’t always make the best decisions on their own.
As for the anunity portion of my original post, my CPA advised against it for my moms situation, however the tactics by the same salesperson from Bankers Life caused her to start the rollover process from her original 401k with BofA. I was able to direct it into a better fit for her needs.

By: Dwight

Dwight — Wed, 18 Nov 2009 17:58:56 +0000

I came across this page in my quest to find out how people feel about LTCi. I would like to respond to several of the posted commentary, and by the way not in a combative way but more informational. Specifically though I will comment on bruhozer.

In most cases, the agent is caring and will put their family in the same policy’s they provide. Like anything ofcourse, you have the very few rotten apples…
The insurance industry is very regulated, especially when it comes to seniors. They(seniors) are highly protected with regards to contact, pressure tactics, etc. As a “field undrewriter” (the agent) has the responsibility to make certain the solution(s) being recommended are needed, suitable and affordable. They cannot recommend anything, much less continue a conversation with someone that seems to not have their wits about them.
In the case of Bankers Life, there is a 4 page needs assessment that is mandatory before any recommendation that be offered. This not only protects the agent but the applicant. You mentioned your mom is 78 and has some health concerns. If she shared those concerns with the agent and her worry box contained the idea that she may be of burden to her family when or if the need arose for LTC, it is the agents responsibility to make sure those concerns are carefully met. Like any other insurance, you can’t get LTCi at the time you have alzheimers and now need to use it. Preparation is key. Not knowing what more was offered, that annuity(depending on the annuity)could have served several purposes depending on the amount. (1) Helped to protect your mother’s assets for her family(which may have been a concern in that worry box), (2) a percentage of that monies can be utilized for LTC and (3) allowed her to enjoy the benefits of the market(profits) with the knowledge that her principal and profits are secure from loss. Certain annuities are contracts with the insurance company and comes with certain guarantees.

Regarding daily cost, it obviously just matters the city and state. I don’t know the current numbers at this time, however last year for example, New Orleans, Louisiana was the lowest at $137 per day while White Plains, NY was $351 per day. One option may be to obtain a stand-alone Home Health Care(HHC). Again, it boils down to need, affordability and suitability.

Hope this helps somehow when making or helping someone make a decision regarding insurance.

By: bruhozer

bruhozer — Thu, 24 Sep 2009 23:59:58 +0000

OK
I’ve kind been thrown into this discussion because my mom went around my family’s back and jumped on a LTHC policy from Bankers Life that does not look so good to me. First of all the parent company Conseco, Inc has gone bankrupt and is on the verge of it again. Yea I’m not wild about that. The sales person had her put her B Of A IRA with her company in an IRA probably an anuity that will cover her long term care and get her a dividend check each month. When I called the sales person today they tried to sell me on the company and told me how they would put their Mom into the same thing. Yea I’m not buying that either. My Mom is 78 and has some health concerns but is in pretty good shape and until recently been working and driving ect. I’m always skeptical of a company that make cold sales calls and prey on the elderly who can just make a snap decision without any research into the company. Now I guess I will be back pedaling to get her out of it or re-evaluate it
C

By: Richard Varney, Jr.

Richard Varney, Jr. — Wed, 23 Sep 2009 11:37:07 +0000

“My view on this is a simple one– you need disability insurance until you are 65 or retired and then you should replace it with long term care insurance from then on . . .”

Most disability insurance (through your employer) pays only 2/3rds of your salary. However, you CAN get a supplemental disability insurance policy from Aflac that will make you 100% whole with regards to income should you suffer that type of a loss.

But disability only covers your income which satifies your daily living expenses. Remember: it does NOT cover costs associated with Long Term Care (LTC). This means LTC can, (and will), wipe out your income whether or not you are disabled. Does your mortgage payment or car payment go away when you become disabled?

Bottom line: LTCi is there for those that wish to protect their assets no matter what age the covered person is. If you want financial protection from this type of loss at 40, take it when you are 40. If you want the protection when you are at age 65, you can take it now (with an inflation rider) or at at 65 (for a higher premium).

The choice is yours. It really comes down to how important your assets are to you.

By: Jason

Jason — Mon, 03 Aug 2009 04:29:27 +0000

Ok I’m new to this stuff, i see now i can reply directly to your post…. My question is how are you able to lock in those savings for life? are you saying your premium is locked in at your rate for being 49?

By: Jason

Jason — Mon, 03 Aug 2009 04:26:02 +0000

Question for Lonnie,

how were you able to lock in those savings for the rest of your life? Are you saying you were able to lock in at you rate at age 49, and it will never go up? if so how and what company?

By: Jason

Jason — Mon, 03 Aug 2009 04:22:18 +0000

Good facts and points, a good reference for information. Thanks for posting this. however some of them contradict each other. For example you state that “There seems to be some discrepancy between Eldercare.com and the Department of Health but I think it’s safe to conclude that you have a 50% to 80% of needing long term care for less than a year – if you need it at all.” and then you state in #5. “5. A four-year benefit should be enough. Nearly 90 percent of all people over age 65 who enter a nursing home stay fewer than five years. The average is 2 1/2 years.” Average is 2 1/2 years, that’s over twice as long as what you stated previous, saying that you have a 50% to 80% of needing it for less then a year. So which one is it? Ive always read the average to be true, 2 1/2 years, but what are you wanting your readers to believe to be true? Again, very good article and very educational for the most part. Just need some clarification. Thanks

By: Lonnie

Lonnie — Tue, 30 Jun 2009 01:30:06 +0000

Thank you for a most interesting and thought provoking post. I would like to add a few comments if I may.

I have always thought of Long Term Care Insurance as a love letter to your family. You know that they want to help you,and they will if they can. But, you will find that due to the emotional and financial strains on family and friends, caregivers tend to get as sick or sicker as the afflicted.

In regards to the age as to when one should purchase Long Term Care Insurance, it should be noted that over 40% of people receiving Long Term Care are UNDER the age of 65. Think of people in accidents. Car accidents; motorcycle accidents; Accidents happen.

When determining the “sweet spot” for the “right” time to purchase Long Term Care Insurance, I believe that you will find that premiums most Insurance companies charge markedly increase when one turns 50. I purchased my policy when I was 49 and locked in those savings for the rest of my life. I have an inflation rider on my policy which will keep my benefits in line with increased cost over time of Long Term Care.

As you mentioned, I cannot stress enough the importance of the financial strength and stability of the Insuring company in making your Long Term Care Insurance decisions. A lot of “weaker” companies are either no longer in the Long Term Care Insurance market, or have raised their premiums to existing policies (sometimes as high an increase as 45%) as is their wont after three years.

By: Wealth Pilgrim

Wealth Pilgrim — Thu, 04 Jun 2009 16:45:46 +0000

DDFD, I’m with you.

Rita, I’m sorry for the medical struggles your parents had and I am of course happy they had the coverage.

I hope I don’t give the impression that this is a bad thing to buy……I just think we should be informed consumers. Most people probably don’t need it but for those who do, it really is a blessing.