“To sell newspapers and get people to watch television news, the media must focus on disasters and scary news,” declares Jesse Slome, executive director of the long term care insurance industry trade group.  “To be fair, The Journal has contained many positive stories extolling the virtues of long term care insurance, though never on the front-page.”

The national long term care insurance expert commented on the article appearing today by stating long-term care insurance premiums have risen because more people are claiming benefits than expected and interest rates settled and remain at historic lows.   “Investment returns on policyholder premiums account for between 40-and-60 percent of anticipated revenue,” Slome explained.  “That’s especially true today when consumers chose to increase policy benefits by five percent compounded annually, or the ‘gold standard’ as the Journal referred to it.  Gold is expensive.”

Slome notes that regrettably overlooked entirely by the story (Long-Term-Care Insurance Leaves Customers Groping) is the fact that in 2012, insurers paid out $6.6 billion in long-term care insurance claim benefits to 264,000 policyholders.  “The largest (still open) claim has reached $1.8 million paid over almost 16 years,” Slome reports.  “The policy was purchased for $881 annually with premiums paid for three years until the claim began.”

“Long-term care insurance is not a universal solution,” Slome admitted.  One must be able and willing to afford premiums.  More importantly, one must meet health requirements imposed by insurers to avoid healthy applicants subsidizing unhealthy ones.

“I like to paraphrase Winston Churchill,” Slome continued.   ”It has been said that long-term care insurance is the worst form of protection except all the others that have been tried.”

Consumers seeking long term care insurance costs who wish to connect with a designated specialist, a member of the American Association for Long-Term Care Insurance, can also visit the organization’s website or call 818-597-3227.

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“Identifying an age bracket will encourage more consumers start the process of thinking about ways to plan for their future risk of needing long term care,” declares Jesse Slome, director of the American Association for Long Term Care Insurance.  “And, there are many reasons why the decade between your mid-50s and mid-60s is the ideal time.”

The national long term care insurance expert was sharing the importance of planning.  “Let’s start with why we recommend starting prior to turning 65,” Slome shared.  “At age 65 people qualify for Medicare which qualifies them for a variety of health screens and tests.  These tests often identify conditions that will disqualify them for long term care insurance and could well be the conditions that heighten their need for future care.”

As a result, Slome admonished consumers to look into long term care insurance prior to applying for Medicare.  “Your health when you apply is far more important than many people know,” Slome advised.  “Some insurers today will not accept you if you have previously been declined by another insurer; so if you have some conditions or take more than basic prescription medications, it is vital to shop your health.”

Slome advises working with a knowledgeable long term care insurance specialist appointed with between four and six insurers.  “If I needed surgery, I’d want a surgeon who had performed the operation successfully a hundred times before and knew everything about the various techniques,” Slome shared.  “A specialist will know the acceptable health conditions required by each insurer as well as the all-important small print contained in their contracts”

A common mistaken belief held by consumers is the belief that going direct to an insurance company will save money.  “Insurers do not sell long term care insurance directly to consumers and visiting their website will only connect you with someone they know favors their particular policy,” Slome concluded.  “That may be the best option for you but it really pays to work with a specialist who has less of a bias and more of your interest in mind.”

Consumers seeking long term care insurance costs who wish to connect with a designated specialist, a member of the American Association for Long-Term Care Insurance, can also visit the organization’s website or call 818-597-3227.

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“We’ve had several recent calls from consumers after being told by a financial planner that rates for insurance would ‘increase significantly’ in 2013,” Slome explains.  “The new discount rate will have minimal impact on long term care insurance and in many cases has already been taken into account by insurers.”

According to Slome, the ‘valuation discount rate’ used for calculating statutory reserves or capital requirements for long term care insurance is dropping from 4 percent to 3.5 percent for new business starting in 2013.  “The rate is tied to Treasury yields based on a complicated formula,” Slome notes.  “It automatically updates when new money rates change over a period of time.”

Five-year Treasury rates are at historic lows (0.62%) and 10-year yields are at 1.59 percent as of September 4, 2012.  “By comparison, both five and 10-year rates were 4.68 percent on January 1, 2007 and 2.65 percent and 4.60 percent as recently as January 4, 2010.

“Low interest rates have been the primary cause of increasing rates for long term care insurance and have impacted other insurance lines including fixed annuities as well as life and disability insurance,” Slome states.  “To compensate for every one percent decline in interest rates which equates to lower investment income, an insurer needs a 10-to-15 percent increase in premiums.   The drop in just the past two years has had an enormous impact.”

The Association reports that the changing reserve requirements that take effect January 1^st are designed to provide added protection to policyholders.  “The half percent drop in reserve rates will have a nominal impact on premiums,” Slome.  “The impact depends on a policy’s duration but is in the two-to-five percent range.”

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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“Insurance is protection against risks and those who face greater risks of claims typically pay more for coverage,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, a national trade organization.  “We understand that car drivers with multiple accidents pay more for insurance than someone with an accident-free driving record.”

Speaking to a female insurance professionals yesterday, Slome urged the agents to speak to their female clients about the importance of long term care planning.  “Women today are living longer lives and may will live well into their 80s, 90s and even past 100,” Slome explains.  “When you live a long life, the likelihood of needing long term care is exponentially increased and yet so many women have no plan at all for dealing with this matter.”

Slome, who is author of the Women’s Guide to Long-Term Care Insurance, noted that women who own long term care insurance protection comprise about two thirds of newly opened claims in 2011.  “The largest percentage of long term care insurance claims paid to women is for care in a home setting,” Slome adds.  “People still associate long term care insurance with nursing home care and while it does cover that, the majority of benefits paid for home care or care in an assisted living community.”

The long term care insurance expert pointed out that women still enjoy a significant pricing advantage when purchasing long-term care insurance.  “Single women pay the same for equal coverage as single men do, despite the fact that their utilization is so much greater,” Slome shared with the female insurance professionals.  “But this is likely to change in the years ahead so now is the right time to urge planning.”

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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According to Jesse Slome, executive director of the American Association for Long Term Care Insurance, a just published book, Universal Coverage of Long-Term Care in the United States, provides a look at the overall issue facing the country.

“Of particular interest were chapters dealing with how the issue has been and is being dealt with around the world,” Slome commented to a group of industry professionals yesterday.  “There is a certain peace that comes from ignoring the world around you.  It’s natural and today’s parsimonious political environment, it’s just too easy to say “enough” — what we are doing is just fine.”

Slome notes, despite the failure of the CLASS Act, which he ascribes to uninspired leadership, the long term care insurance expert says that “CLASS was an important building block that helped to make long-term care more prominent on the national agenda.”

“While it is unlikely that the United States with a history of private sector health financing will adopt a program similar to those already in place in other countries, reading how long term care is dealt with elsewhere provides historical perspective, factual data and valuable insight for anyone who has an interest in what will, I believe, be used to frame the discussion in the years to come,” the long term care insurance expert adds.

The authors lay out an interesting look at how various models have been shaped as much by politics and demographics as by societal factors such as family culture.  “Of particular interest is the consideration of the changing demographic of working women in these countries,” Slome comments.

Demographics clearly drove the need to address the issue with Germany and Spain.  Their population of persons age 65+ will increase from around 16 percent today to around 30 percent in 2040.  In Japan more than 14 percent of the population will be 80+ in 2040 (double that of the US).

Germany’s universal LTC legislation passed in 1994 when 15.8 percent of its population was age 65 or older.  Japan passed legislation in 1997, when its 65+ population was 15.7 percent.  The proportion of US citizens 65+ was 13.0 percent in 2010 and is expected to be 19.8 percent in 2030.

“Germany and Japan adopted many LTC reform goals and policies consonant with their existing structures, funding arrangements, and cultures, and the US is likely to ultimately do the same at some point,” Slome predicts.  “Americans are aging every day and few have a plan for dealing with the enormous risk of needing long term care that results from living a long life,” Slome explains.  “Long term care insurance is a viable option for those who can health qualify and can afford a private option leaving everyone else to depend on family or whatever government programs exist.”

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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“There is only one insurance company still offering true group long term care insurance to large employers looking to commence a new benefit offering and only one insurer who ceased selling new plans that will allow newly eligible employees to sign up,” explains Jesse Slome, director of the American Association for Long Term Care Insurance.  “Larger employers who have previously offered a long term care insurance benefit to their employees have been forced to adopt a new and different approach to this important benefit.”

True group long term care insurance generally is available to larger employers, those with 500 or more employees.  Policies typically offer some form of guaranteed health insurability or modified health underwriting standards.  “In the current low interest rate environment the insurers like MetLife, CNA, Unum and Prudential who once offered true group coverage have ceased offering this option,” Slome notes.  “The industry has shifted to ‘multilife’ policies which are individual policies offering a group discount and some underwriting concessions.”

“For this year’s open enrollment season, employers who have previously offered long term care insurance to their employees really have three options,” Slome says.  “Don’t offer any coverage, offer coverage using multilife long term care insurance policies or recommend employees seek coverage on an individual basis.”

According to the Association, several long term care insurance companies offer coverage on a multilife basis.  Slome notes that Genworth, Transamerica, MedAmerica and LifeSecure (a Blue Cross Blue Shield of Michigan subsidiary) currently offer multilife long term care insurance policies.   “The discounts typically range from five to 15 percent off the regular pricing, depending on the size of the group and the health underwriting concessions offered to attract participation,” Slome states.

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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According to Jesse Slome, director of the American Association for Long Term Care Insurance <meta name=”news_keywords” content=”long term care”>

affected are annuity companies, life and long-term care insurance companies.  “For some reason long term care insurance was the first to catch the media’s attention but clearly many types of insurance are affected,” Slome explains.

Addressing a group of insurance agents this week, the Association director noted that, “interest rates have not been this low in decades and the Federal Reserve has given every indication that things will not change for the foreseeable future.  Low interest rates are great for those seeking a mortgage but they also have negative implications in other areas like CD rates as well as some insurance products.”

Among the insurance products impacted are fixed annuity products.  “Fixed annuities often pay a declared interest rate, generally defined by two provisions with the word “guaranteed” associated with them,” Slome notes.

One provision common on older policies issued when interest rates were higher provided a guaranteed minimum interest rate that will be credited to the annuity balance.  “For many contracts the guaranteed minimum interest rate was set at three percent, a figure that certainly seemed attainable in what were considered normal economic times,” Slome explains.

The second feature offers a guaranteed set payment for life.  “This feature was deemed highly attractive by many and according to a report released recently by the Insured Retirement Institute indicated that ‘guaranteed income’ was a top reason people purchased annuities,” according to Slome a leading insurance expert.

Experts point to the low interest rate environment as a reason leading insurers are withdrawing from the marketplace or instituting changes.   Prudential Annuities has suspended the ability of policyholders with certain types of benefits to make further contributions.

This week analysts at Moody’s Investors Services predicted that tight consumer budgets will constrain life insurance sales as low rates and volatile stock process hold down insurer profits.  They cited that low interest rates are impacting long-term disability insurance products, old blocks of fixed annuities with high guaranteed rates and universal life products with embedded interest rate guarantees.

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more about long term care insurance costs <meta name=”news_keywords” content=”long term care insurance, costs”> call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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“Americans are living long lives but few are prepared for the consequences that will significantly impact their spouses, family and loved ones,” declares Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the industry trade group.   “Today there are almost two million Americans ages 90 and over and the number is projected to quadruple over the next few decades.”

Much of the growth will come from aging baby boomers.  “Between 2020- and 2030, the growth of the population between ages 65 and 89 is projected to increase by 32 percent,” Slome explains.  “America’s oldest old will place a great strain on the nation’s families and resources because many of them will require lengthy and very costly care.”

Three states already have over 100,000 residents age 90 or older according to the nation’s long term care insurance expert.  “California has nearly 190,000, followed by Florida with 142,000 and New York with over 130,000,” Slome reports.  Women age 90-plus outnumber men by nearly three to one.

“Older women can expect to live longer than men and have experienced more rapid improvements in life expectancy,” Slome notes.  Over 80 percent of the 90-plus women are widowed, while more than 40 percent of the 90-plus men are still married.

Government data shows that the annual median personal income for people age 980 and over was $14,760 (in 2008 inflation-adjusted dollars).  “The poverty rate for the 90-plus population is higher than that for those age 65 to 80,” Slome adds.  “When older people need long term care which is common simply as a result of aging or age-related health conditions like Alzheimer’s disease, they are either going to turn to family members for support or to whatever government programs exist at the time.”

“For baby boomers who are in their 50s and 60s today, it is important to understand the likelihood and risks associated with living a long life,” Slome notes.  “If you don’t want to depend on family or be forced to depend on Medicaid, one had better start thinking about this prior to retirement age when you have the most planning options available.  Long term care insurance is going to be vital for America’s oldest old.”

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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