“The new tax will cost Washington workers starting next year and many are looking into long-term care insurance as a way to avoid the tax,” explains Jesse Slome, director of the long-term care insurance organization.  ”Insurers realized that many individuals were likely buying low amounts of coverage and others intend to drop coverage once they achieve their goal of tax exemption.”

As a result, insurers have just issued new minimum levels of required protection and new procedures.  “It generally costs an insurer between $600 and $800 to health underwrite and issue a policy,” Slome explains.  “In addition, insurers pay commissions to the selling agent all of which are only recouped when a policy remains on the books for several years.”

According to Slome, Mutual of Omaha will automatically decline applications from individuals who have not been seen by a physician in the last 24 months.  In addition, the company will do a chargeback on commissions paid on policies issued through November 1, 2021 that are lapsed within the first policy year.

“Increasingly agents are telling us they do not want to spend time with consumers looking for a policy explicitly to avoid the tax,” Slome notes.  “While the State regulations do not currently require coverage be in place next year, I fully expect subsequent State-amendments will address this after legislators realize they left a loophole.”

A second carrier, National Guardian Life (NGL), has set the policy minimum Daily Benefit Amount at $100 for Washington residents.  Applications with a $50-to-$90 benefit amount selected will not be accepted by the company.  In addition, applicants must choose an inflation option and those opting for facility only benefits will not be accepted.

“NGL is also requiring that applicants have been seen by a physician within the past 24 month,” Slome notes.  “That will limit younger applicants in their 30s and 40s who often do not get regular physical examinations.”  The company will also chargeback paid commissions if premiums are not paid for the second year of coverage.

According to Slome, a 45-year old Washington male selecting a $100 daily benefit with no inflation growth would pay around $361 annually.  “Adding the 3% inflation option raises the cost to $794 and selecting the 5% option takes it to $1,751,” he says.  “For a 45-year old female selecting the 3% inflation option the annual premium cost will be $1,304.”

The new Washington tax adds an uncapped payroll tax of .58% on all wages beginning January 1, 2022.   “Someone earning $150,000 yearly will pay $870 in added taxes,” Slome shares.  “The new insurer rules have changed what we share with consumers.  I would say that $125,000-to $150,000 in annual income is the minimum threshold where considering private long-term care insurance makes sense.”

Changes imposed by Thrivent include increasing the minimum issue age to 40 for Washington residents as well as increasing the minimum monthly benefit to $3,000.  “In this case, a 45-year old male picking a $3,000 monthly benefit with 2 years of coverage will pay $351 yearly,” Slome explains.  “Many agents are going to advocate for at least a 1% inflation growth option which raises the cost to $460 yearly.”

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of planning and supports insurance professionals who market both traditional and hybrid LTC solutions.   To obtain long-term care insurance costs from a Washington specialist call the organization at 818-597-3227 or visit their website.

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“It’s a 50-50 probability that someone getting long-term care insurance at age 65 will use their coverage and that’s a significant piece of information few consumers understand,” explains Jesse Slome, director of the long-term care insurance organization.

The organization worked with leading industry actuaries to review policy usage data.  “We specifically looked at risks based on coverage that had a zero-day elimination period,” Slome adds.  “Today, many policies have provisions or options that include access to immediate benefits for home care needs.  And, since the vast majority of long-term care insurance benefits today pay for care at home, this made the most sense.”

The Association director acknowledged the likelihood of usage was less when a 90-day Elimination Period (EP) was used to factor risk.  “Many people choose a 90-day EP specific to when benefits for skilled nursing home care would apply and that makes sense because Medicare covers some of that risk,” Slome notes.

Policy Usage for Long-Term Care Insurance (can be 50-50)

“Does having some long-term care insurance make financial sense?” Slome queries.  “We insure our homes even though we know the risk of a house fire is far less than 50-50.  The risk of needing care as we age is significantly high, and thus the answer is yes, having some protection in place makes prudent financial sense.”

The 50-50 usage projection assumes the individual purchases long-term care insurance at age 65 and maintains the policy until either they need benefits or die.   The Association recently posted their 2021 long-term care insurance price index and other statistics and data on it’s website.

Headquartered in Los Angeles, the American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of planning and supports insurance professionals who market both traditional and hybrid LTC solutions.   Request long-term care insurance costs by calling the organization at 818-597-3227 or visit their website at www.aaltci.org.

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“The tax advantages and long-term care planning options for businesses can be significant,” says Jesse Slome, director of the American Association for Long-Term Care Insurance.  “Tax deductibility is now possible with some of the hybrid long-term care policies people are increasingly purchasing.”

A hybrid long-term care policy combines the benefits of life insurance or an annuity with long-term care benefits.  “If it turns out that long-term care (LTC) is not needed, the life portion pays a death benefit to the designated beneficiary when the insured passes away,” Slome explains.

All traditional long-term care insurance policies and a limited number of hybrid policies attached to life insurance with separately identifiable LTC premium components will offer tax deductibility.  “Businesses formed as C-Corporations enjoy the most significant tax benefits,” Slome notes. Some 90 percent of C-Corps have fewer than 100 employees according to Census data.  “Every small and mid-sized business owner looking for tax and planning advantages would benefit by learning more,” he adds.

According to the Association, an increasing number of insurance companies are offering hybrid long-term care options.  The plans can vary however in terms of meeting the criteria for tax deductibility, policy costs as well benefit provisions.  ”It makes comparing the available options most worthwhile,” Slome advises.

Among hybrid long-term care policies, potentially significant differences include how the insurer will eventually pay claims.  “The differences can vary most in terms of how home care benefits are paid,” Slome points out.  “Some policies utilize a reimbursement formula with specific contractual limitations regarding who can provide care.  Alternatively, a cash benefit method provides payments without such limitations including the ability to pay family members who are providing care.”

“Cash payments provide the greatest flexibility and possibilities when care is needed,” explains Tony Massenelli, Director, Long-Term Care Sales for Nationwide, a leading provider of hybrid long-term care solutions. “One of our plans provides a retroactive lump-sum cash payment for home care back to day-one after the 90-day elimination or deductible period is met.”

Other differences include options that can increase the future value of available benefits. “An inflation growth option can address the risk of rising care costs,” adds Slome who notes that most insurers offer a fixed rate formula.  “Nationwide’s CareMatters II policy also offers an inflation option tied to the increase to U.S. medical care costs, an option that a number of long-term care insurance specialists find is more relevant for their clientele.”

To learn more about both traditional or hybrid long-term care insurance visit the American Association for Long-Term Care Insurance website.  To receive no-obligation comparisons and long-term care insurance quotes from an independent specialist, call the organization at 818-597-3227.

About the American Association for Long-Term Care Insurance.   Founded in 1998, AALTCI advocates for the importance of protecting against the real risk of needing long-term care and supports insurance professionals who market traditional and linked-benefit LTC insurance solutions.   Visit https://www.aaltci.org for more information.

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“The information comes from one of the very few relevant studies of long-term care insurance so the insights are of enormous value,” explains Jesse Slome, director of the group.  Slome, who is the author of numerous consumer guides that focus on long-term care and retirement planning, was conducting a conference call with leading long-term care insurance specialists.

According to the Association director, the data comes from the October 2019 quarterly report issued by the Connecticut Partnership for Long-Term Care.  “Connecticut was one of the four original Partnership states and to the best of my knowledge is still the only one that regularly gathers and publishes relevant data.”  The other four original Partnership States were New York, California and Indiana.

“Perhaps the most interesting piece of information was the finding that the average time between the purchase of a long-term care insurance policy and the eligibility for claim is 161 months (13.4 years),” Slome noted.  The Connecticut report was based on a total of 4,351 aggregate claimants.  “While Connecticut is a small state, I suspect this data will be almost identical for the entire industry because it represents an aged block of business,” Slome commented.

The average age at the time of claim was 79, Slome shared with the professionals.  The mean age at the time of claim ranged from 31 to 99.

To access this and other long-term care insurance information, visit the Association website or go to www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2019.php

The Association estimates that some 60,000 Americans will purchase a new traditional long-term care insurance policy in 2019 and several hundred thousand will purchase a linked-benefit policy that offers long-term care benefits.  “Both are excellent ways to plan for the very real risk of one day needing care,” Slome shared with the group.

Headquartered in California, the American Association for Long-Term Care Insurance advocates for the importance of long-term care planning.   Established in 1998, the organization connects consumers with knowledgeable professionals who are independent advisors for no-cost, no-obligation long-term care insurance quotes and policy comparisons.

The post 2019 Long-Term Care Insurance Claims Data Shared appeared first on American Association for Long Term Care Insurance.

“Nearly half of the 333 agents responding to the survey expect sales of traditional long-term care insurance policies will be higher,” explains Jesse Slome, director of AALTCI.  The organization surveyed over 1,000 insurance professionals who have prior experience selling both traditional and linked-benefit LTC insurance policies.

Only 20.8 percent of the survey participants expected lower sales this year according to the study’s findings.   “There was even greater optimism for the sale of linked-benefit policies,” Slome shared.

The survey found that 92.8 percent expected sales of linked-benefit LTC policies would be equal to or higher than their prior year’s sales.   “In terms of expecting their personal sales to increase, some 65.8 percent expected they would sell more linked-benefit LTC policies in 2019 than they did in 2018,” Slome shared.

Optimism Extends Into The Future Survey Finds

The survey queried participants about their outlook five years into the future.  “Overall, there was great optimism for the future of the industry and their own personal sales,” Slome notes.  Some 43.1 percent of the survey’s respondents expect that in 2023, their sales of both traditional and linked-benefit policies will be higher than today.  Only 6.6 percent expected their sales of both will be lower.

A minority of respondents (7.5 percent) expressed that by 2024 they expected that traditional long-term care insurance products would no longer be available and that all sales would be linked-benefit long-term care offerings.

The American Association for Long-Term Care Insurance advocates for the importance of long-term care planning.   The organization connects consumers with knowledgeable professionals who are independent advisors for no-cost, no-obligation long-term care insurance quotes and policy comparisons.

Jesse Slome is founder of the organization and currently serves as the director for AALTCI as well as the American Association for Medicare Supplement Insurance as well as the American Association for Critical Illness Insurance.

See Survey Participant Data – How Many Years / How Many Policies Sold

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“There are undoubtedly millions of Californians who have annuities or life insurance policies that really no longer fully serve their original intent or could be put to better use via a 1035 exchange,” shared Jesse Slome, director of the American Association for Long-Term Care Insurance.   ”The 1035 exchange is one of the best kept secrets in retirement planning strategies and our goal is to see more insurance agents and brokers made aware of how they can benefit consumers.”

Slome authored a feature article appearing in the current issue of California Broker magazine, the leading insurance publication for life and health insurance agents in California.   ”Congress approved 1035 exchanges that enable consumers to convert a current annuity for one that meets the provisions specified.  Annuity funds continue to grow but here’s the real benefit; if you need dollars to pay for long-term care, they can be paid out 100 percent tax free.”

Read The California Broker Magazine Feature

Insurance agents who wish to read the full feature in California Broker magazine can click the following link.

California Broker 1035 Exchanges

The national long-term care insurance trade group just published an informative Guide To 1035 Exchanges that can be accessed online.  “We want to make insurance agents and financial planners who work with seniors aware of this powerful retirement planning technique and to share the information with consumers,” Slome added.  The guide can be accessed at www.aaltci.org/1035-exchanges.

According to AALTCI, there is nearly $3 Trillion held by Americans in annuities  “We know that far too few Californians have undertaken any real plan for the risk of needing long-term care,” Slome mentioned.    ”A 1035 exchange from and existing annuity or life insurance policy to another that also provides LTC benefits could be most beneficial at this time.”

Consumers and insurance agents who want to learn more about long-term care insurance costs and planning options can call the American Association for Long-Term Care Insurance at 818-597-3227 or visit the organization’s website at www.aaltci.org to find and connect with local LTC insurance professionals.

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“If you live a long life, the likelihood of needing long-term care services increases exponentially,” declares Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI).   “Wealthier Americans have lower rates of heart disease, diabetes, stroke and other chronic conditions which is good news but also means they are destined to live long lives and face a real risk of needing care sometimes for months and sometimes for years.”

According to Slome, Americans in the higher income groups can expect to live six years longer than their poorer counterparts.  Social Security Administration reports reveal that at age 65, retirees are living longer.  “Those with earnings in the top half of the U.S. population have seen their life expectancy increase by more than six years ,” Slome acknowledged.  “Those in the bottom half have only seen an increase of just over one year.”
The study points out an important message Slome urges insurance and financial professionals to share with their clients.  Speaking to leading agents endorsed by the organization, the national long term care insurance export shared, “having wealth means you are more likely to live a long life but most have absolutely no plan in place to deal with the consequences and the financial costs,” Slome shared.

“Unfortunately, far too many retirees wait to long to even think about a plan,,” Slome added.  “At that point their options are limited.”  He noted that most long-term care insurance policies stop accepting applicants at age 75 and that meeting health qualification requirements after age 70 can be difficult.  “There are options available for short term care insurance where policies are available into your 80s and health requirements can be easier to meet,” he adds.

The American Association for Long-Term Care Insurance advocates for the importance of planning and supports insurance and financial professionals who market long term care insurance solutions.  Slome is also head of the National Advisory Center for Short-Term Care Information, established in 2015 to create awareness for the benefits offered by short-term care insurance products.

The post Affluent Live Longer; Good News Means Greater Need For Long Term Care Insurance appeared first on American Association for Long Term Care Insurance.

Los Angeles, CA – February 5, 2016;  A couple in their 60s purchasing new long term care insurance coverage can expect to pay almost 10 percent less in 2016  compared to a year ago according to the annual industry analysis of prices.

“A couple where both spouses are age 60 can now pay $100 a month each for a good plan of protection that pays benefits for care at home or in a skilled nursing home,” reports Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI).    The national trade group released their 2016 Long-Term Care Insurance Price Index.

The latest Price Index reflects the ‘Good-Better-Best’ approach to long-term care planning advocated by the organization’s director.  “This has never been a one-size-fits-all product and many consumers are regrettably presented with just one option, often the most costly,” explains Slome.

Good coverage he shares provides benefits for up to 360 days with a benefit pool that increases each year as the policyholder ages.   ”For many, this is going to be sufficient coverage, and it’s certainly going to be far more affordable,” Slome adds.  About half (49%) of current long-term care insurance claims end before one year according to AALTCI data.

According to the 2016 LTC Price Index, rates for a 60-year-old couple declined between seven and nine percent compared to the prior year.   “You had some high-cost providers exit the market and you had some that readjusted policy pricing,” Slome explains to account for the year-to-year change.

2016 Costs For Virtually Identical Coverage Vary By 20-To-94 Percent

What has not changed, according to AALTCI’s 2016 Price Index, is the finding that costs for virtually identical policy coverage vary significantly from one insurer to the next.    “Each insurer sets their own rates and available discounts and the price for virtually identical coverage can vary,” Slome states.    The AALTCI analysis found rates varied by as much as 94 percent.  “You generally only buy long term care insurance once, so it’s important to do it correctly the first time,” he adds.

Free access to read informational guides is available on the Association’s website.  To obtain long term care insurance costs from a professional with expertise specifically in long term care insurance products offered by multiple leading companies call the national organization at (818) 597-3227 or visit the Association’s website at www.aaltci.org.

To learn more about short term care insurance options, visit the National Advisory Center for Short Term Care Information, at www.shorttermcareinsurance.org

2016 Price Index Long Term Care Insurance

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“The nation’s long term care insurance companies pay $20.5 million a day in claim benefits,” declares Jesse Slome, AALTCI director. “We believe it is important for consumers to understand that claims are paid and consumers definitely get the benefit they sought when purchasing the protection.”

A national news story distributed by the Association reports that long term care insurers paid $7.5 billion in claims last year (2013) and highlights a Florida couple whose parents benefited from having long-term care insurance policies.  “They are just one example of the many people who are benefiting and that number will only grow as more policyholders age and start to need extended care,” Slome adds.

According to AALTCI, the news story has already appeared in MarketWatch, the online national resource for The Wall Street Journal, Reuters and some 300 additional media outlets.  “The Association works hard to educate consumers to the importance of long term care planning,” Slome notes.  “How to buy this coverage and showing that the policies actually deliver is an important component of that story.”

Slome, the creator of Long-Term Care Awareness Month, noted that November is a time when many agents will urge their clients to initiate planning for the eventual risk of needing extended care.

Headquartered in Los Angeles, the American Association for Long-Term Care Insurance was established in 1998 to create heightened awareness for the importance of long term care solutions.

Links To News Stories

MarketWatch (The Wall Street Journal)

http://www.marketwatch.com/story/long-term-care-insurance-industry-pays-205-million-in-daily-claim-benefits-2014-10-09

Miami Herald

http://markets.financialcontent.com/mi.miamiherald/news/read/28422286/Long_Term_Care_Insurance_Industry_Pays_$20.5_Million_In_Daily_Claim_Benefits

Reuters

http://www.reuters.com/article/2014/10/09/aaltci-daily-claim-idUSnPn1pgZ7s+84+PRN20141009

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“We are offering free access to watch the special 30-minute filmed presentation,” explains Jesse Slome, director of the American Association for Long Term Care Insurance.   The organization recently held it’s annual conference attended by over 500 insurance professionals.  Free access will be available through September 30, 2014.

For the first time, most of our conference workshops were filmed.  “A number of select sessions were streamed live online and viewed by several thousand agents,” Slome notes.  “All the recorded sessions became part of an On Demand library accessible for a nominal fee.  We are now making the first of those sessions available for viewing at no charge.”

The 30-minute session focuses on strategies for dealing with prospects and clients who are unable to health qualify for traditional long-term care insurance.  “As many as half of the market can’t health qualify, so alternative options are valuable to the prospect and also a great way to earn extra income,” Slome adds.

Free access will be available through September 30th.  In addition, the Association is offering a special 50-percent discount to those who order access to the full package of conference recorded sessions.    Details are available on the website.

To access the free video, go to http://www.fleetwoodonsite.com/aaltci/promo/

The American Association for Long Term Care Insurance was established in 1998 to create heightened awareness for the importance of planning and to support insurance professionals who market LTC solutions.

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