In writing this week's long-term care insurance review, I found a few interesting stories to share with you, the loyal readers of this blog on LTC and all of the issues surrounding it.

In Connecticut, Mob-Rule on Rate Increases

I'm normally more of a "republic" style guy than a true democracy, but I like one idea put fourth in Connecticut this week.  The idea from Hartford, CT is to regulate long-term care insurance rate increases with public hearings.  I think in order for companies to raise rates, they need to really come under the microscope and be transparent with everyone.  Plus, they need to bask in the bad-PR glow of their rate increases.  Coming on the heels of a recent 9% Genworth rate increases, which as the story points out is much lower than many other long-term care insurancerate increases lately, some as much as 50%, on top of past increases of that much as well.

About 1,861 Connecticut long-term care insurance poliyholders were affected by the recent Genworth increase, leading to just over thirty complaints.  Expect John Hancock to increase some rates soon, as previously posted here on the blog.  Here's the reasoning behind Genworth's increase:

Genworth had anticipated that about 5 percent of policyholders a year would voluntarily stop paying their premiums on the long-term care policies. As it turns out, only about 1 percent of policyholders have stopped paying, Topinka said, and more people keeping their policies translates to more claims.

Hancock is claiming the same thing.  I expect more carriers to follow suit on some older policies.  The good news for newcomers to long-term care is that this is just one more kink that has been worked out of the system by early adopters.  Always keep in mind that the carriers all do leave themselves with room for future rate increases, so plan for the possibility when considering long-term care insurance, whether from Genworth, John Hancock, or otherwise.  (Request a quote at the bottom of this page!)

NAIC finds work needed to clarify what vote means

This is a re-post from the NAIC NewsWire | 06/04/2008

Insurance regulators meeting Monday in San Francisco discovered they disagreed on what their vote means when asked to approve a model law that revised NAIC's Long Term Care Insurance Model Act provisions for claim denials. In the discussion, one commissioner called for one vote on the model and another to designate who would lobby for its passage, while others abstained or opposed the measure because their states had higher standards.

Another article I found, How to Identify a Partnership-Qualified Long-Term Care Insurance Policy is good reading for those living in the ever-growing number of  states that have Partnership programs.

     Options when planning for Long Term Care

     In my decade of helping people plan for long term care (LTC), I've met or spoken with over 10,000 people on the subject and unlike investments which I help people with as well, long term care is often viewed as a depressing subject to talk about.  You will get that person who is grumpy and when the subject is broached, he'll (or she'll sometimes) say, "well if I ever need long term care, I'll just shoot myself."  Now, increasingly, I'm finding that as people have become more educated on planning for long term care over the years because of more media coverage or maybe seeing how devastating a long term care stay can be with one of their parents, more and more are becoming realistic about the subject and planning before it's too late. 

     If you simply stop, and logically think about the long term care problem and your options, there are only 4 LTC choices you have when planning for your retirement.

Option 1: Public Programs
     You simply cannot rely on Medicare because on a nationwide basis, Medicare covers only 11% of nursing home care costs and 24% percent of home health costs.  Medicare pays only for post-hospital, short-term rehabilitative care and short nursing visits (typically 20 days max).  Medicare Supplement Plans do not offer much help either, these plans cover co-payments, deductibles of the limited benefits, and services covered by Medicare.  You don't want to rely on Medicaid because in order to qualify for this Welfare program you have to spend-down your assets to the state’s poverty level--that's means your now broke. 

Option 2: Private/Family Support
     Of course, your kids, family and friends might care for you if you were to need long term care.  On the surface, this may sound like a good solution to your problem.  However, think about it and ask yourself realistically: Will they have time to drop what they are doing to help me?  Can they provide, and do they have the proper training needed to give the type of care I may need?  Do I really want to ask this of them and have my son or daughter give me a sponge bath?  There are numerous over-looked emotional, physical, financial, and geographical requirements that can make relying upon your kids and or family/friends an uncomfortable and most importantly unrealistic option.

Option 3: Self-Insure
     You may not realize it, but right now you are self-insured against the long term care risk, unless you already have a long term care insurance policy.  Without coverage, your 401K, Cd's, IRA, etc. are your insurance company and you are solely taking on the financial risk for the costs of long term care.

Option 4: Protect you and your family with a Long Term Care Insurance policy

     Asset protection is essential to financial stability, especially during retirement.  With out a doubt you have already taken steps to ensure your family's financial future is protected in the event of accidents.  You probably have life and health insurance, as well as coverage for your home and car.  These are realistic-practical approaches to transferring the risk of unforeseen expenses away from you and your family to an insurance company because it makes sense.  Think about this for a second...imagine you are going on vacation to Disney World and you pack your bags in the car, turn off all the lights, turn down the thermostat, and leave the front door wide open.  By not having long term care insurance when you have a nest-egg to lose, you are leaving your front door wide open to your greatest risk you will face.  Do yourself and family a favor and at least look into long term care insurance and see if its right for you.

At LTCtree we work with most all the top long term care insurance so take a few minutes and complete the form below and we'll get your quotes out to you in today's mail.

 Prudential to market Long Term Care Insurance to LGBT Community

Prudential Financial, announced today a groundbreaking marketing program to market Prudential’s Long-Term Care Insurance product to Lesbian, Gay, Bi-Sexual, and Transgender (LGBT) Community individuals.  This move makes complete sense and is about time that companies wise up and begin to market to the roughly 10% of the population. There is a huge need there for long term care insurance in the LGBT Community simply because most LGTB people do not have children to look after them in their older age.  The article appeared in Bussinesswire.com and goes on to state:

“Having choices and protecting retirement assets and personal savings from long term care costs should be important to everyone, however, it may be especially significant for the LGBT community,” said Holtzman. “The reality is the LGBT community lacks the traditional support that married heterosexuals enjoy and as a result face a greater need for long-term care insurance. Our financial professional training program will allow us to deliver a planning experience sensitive to the specific needs of this community.”

At LTCtree we are focused on staying on top of the cutting edge trends in the long term care insurance market so that we can serve our clients better and provide the important financial planning tool in LTC to ALL people.  Take a quick minute to fill out the form below and we will mail you side by side long term care insurance quotes from the top 5 companies.