Colorado governor Bill Ritter is set to announce a new long-term care insurance partnership in two weeks, adding Colorado to a growing list of states that are offering citizens incentives to purchase "LTC" insurance. 

Long-term care insurance and specifically the long-term care partnership programs are designed to avert a future catastrophe when the baby boomers become dependent on daily assistance with activities of daily living.  One of the carrots being used by the state, if you will, is by relaxing the Medicaid requirements for those who purchase long-term care insurance.

In a news release this morning, KKTV of Colorado had some good pointers for Colorado citizens, including this link to the state Long-term care insurance Web site. 

For Colorado citizens, long-term care insurance will soon be a much easier decision to make.  Any time a partnership program is introduced, we see an increase in sales from that state, and it only makes sense.  When there are good incentives to make a decision that is already a necessary part of planning for retirement, it becomes the biggest no-brainer in the history of the earth. 

I was talking to our team of LTCtree agents today on a conference call and several of our agents are reporting to speaking to folks around the country who are telling them New York Life career long term care insurance agents pushing inappropriate LTC coverage to their clients.  NY Life is a great company with impeccable financial ratings, but somehow there is a trend with some of their agents selling a CPI inflation protection to people even in their 30's!  This type of inflation protection is ONLY appropriate for people 70 years +. 

Basically how the NY Life CPI inflation works is every year the company will give you the option to buy more insurance based on the CPI basket of goods set by US economists.  If you are in your 70's and 80's and decide to buy CPI inflation probably wont be a huge problem, but if you are 35-69 yrs old and buy CPI inflation it will be a problem because your rates go up and your benefits will not increase quickly enough.  With the CPI option some NY Life agents are selling, your premium might start off at $50 bucks a month but will over triple when you need it in the future.  Another problem is the average CPI is about 3% per year and by buying that inflation option you are forfeiting the LTC industry standard of 5% Compound annual increase.  With this type of inflation you pay a bit more up front, but will end up paying less in the long run and most importantly have 40% more benefits when you need it by having your benefits increasing 5% with compound versus the 3% with the CPI.  Medical costs increase much faster than items used to gauge the CPI index such as a gallon of milk. 

After discussing the rational reasoning through the facts our conversation turned to why are these NY Life agents doing this?  The reason is NY Life's LTC product is typically more expensive than the other major carriers by a big margin.  NY Life does offer the 5% Compound rider but when compared to say MetLife, John Hancock, and Genworth they are not competitive in almost all cases.  Thus, if you are working with a career NY Life agent that can just sell NY Life it looks like several agents around the country will sacrifice the clients best interest for their own pockets.  Look out and shop around.  At LTCtree we are independent brokers and work solely for our clients not 1 company.  We will literally run your rates with the top 10 carriers and show you all the rates for all the companies and let you judge for yourself what company you want.  Fill out the form below and we'll mail you out the rates.

What's your Long Term Care Insurance IQ ?

The Wall Street Journal last weekend in their "Weekend Journal" edition did a nice piece on basic retirement info and the topic of long term care insurance was a big part of it.  The article revealed that in 2007 that 50% of all long term care insurance buyers we in the age range of 55-64 according to the statistics they used from the American Association for Long Term Care Insurance.  The economist in me can't help but to ask why and connect the stats to a logical reason.  People of that age have aging parents in their 80's and 90's and many have seen there own parents need long term care.  When long term care happens to someone that close it is a real eye opener and those Baby-Boomers are being proactive and planning ahead. 

The average age that people are buying long term care insurance in 2007 breaks down like this:

Ages 55-64: 50%

Ages 45-54: 26%

Ages 65-74: 15%

Ages 35-44: 6%

Ages 75+: 2%

Ages Under 35: 1%

When I began in the industry in the 90's the average age was 65+, someone buying this in their 50's was unheard of but things have changed dramatically in the past 10 years.  I strongly feel as more and more people see a long term care stay in their family that those younger people will continue to buy this coverage to ensure their retirement is protected.

At LTCtree we can help you begin the process of "sticking your big toe in the water" and learn what LTC is and how it work.  We work with all the major long term care insurance carriers and will mail you out a side by side comparison so take a minute to fill out the form below.

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