Category Archives: long term care insurance california

What are the Odds?

Long Term Care  is one of the most pressing issues and likely the greatest retirement expense facing Americans today– it will only get more urgent as the nation ages.

Consider this:

  • The number of persons aged 65 or older is expected to double in the next 20 years; there will be 110 percent more people 80 or older
  • At least 70% of people over age 65 will require some long term care services at some point; more than 40% will need care in a nursing home
  • The cost of long term care in the U.S. has steadily increased, and most of these increases are outpacing inflation
  • The national average median cost of one year in a private nursing home room is over $90,000.

what are the odds you'll need long term care?It’s important to consider care options while a person is healthy. That’s when the best rates and options are available and families are in much better emotional shape to discuss long term care-related planning. The simple truth is that during a crisis, situations can quickly escalate and cause tension or introduce issues that could have otherwise been avoided.

While there is much to gain by talking as soon as possible, there’s a staggering amount to lose if we miss the chance. The list is long, but here are just a few things you should know now, rather than discovering them the hard way later:

  • Health insurance and Medicare cover virtually none of the cost of nursing homes, assisted-living facilities or in-home care– the care many people require late in life. Many people pay out of pocket until they are practically destitute and then Medicaid kicks in. Many who thought they had saved adequately end up impoverished, getting substandard care.
  • Without a durable power of attorney (a simple document that is easy to obtain), you may have to go to court to gain guardianship over your parent so you can handle his or her affairs if he or she becomes incompetent. Guardianship is necessary so you can handle your parent’s affairs. Going to court is expensive, time-consuming and stressful.
  • A loved one’s health status can change overnight. It’s better to have long term care plans and insurance in place prior to their health taking a turn. At that point it may be cost-prohibitive or simply may no longer be an option due to the age or health of the person who will need care or coverage.
  • Many of the best care facilities have waiting lists, and some of them require that your parent be able to live independently in order to move in.
  • Sometimes it is not the big health problems that ruin the golden years, but the smaller annoyances– the inability to pursue a loved hobby, the difficulty hearing, or the fear of falling. When you talk, try to get at these less obvious issues too, as many of them can be resolved.

Being prepared will mean less work, less stress, less worry and fewer regrets. Talk. Talk now. Because we need to prepare for aging like we prepare for everything else in life

If you are ready to talk to a long-term care insurance expert call
us today at (800) 303-1527.

Governor Newsom and Aging

by Louis H. Brownstone 

In his State of the State address on February 11th, 2019, newly elected Governor Gavin Newsom spoke the following words regarding aging and long term care:

Now, let’s talk about something too often overlooked: The Golden State is getting grayer. We need to get ready for the major demographic challenge heading our way.

For the first time in our history, older Californians will outnumber young children. Over the next decade, our statewide senior population will increase by 4 million. In 25 years, it will double. And more than half will require some form of long term care.

Growing old knows no boundaries—aging doesn’t care what race you are, your economic status, or if you’re single with no other family support.

I’ve had some personal—and painful—experience with this recently. I lost my father over the holidays, after years of declining physical health and dementia. He was determined to live out his days with dignity. He also happened to be a retired public official with a pension and a support circle of family and friends. Even with all those advantages, it was a daily challenge to meet his needs so he could live in peace and maintain a good quality of life.

Millions of Californians share a similar story, and the numbers will only grow. It’s time for a new Master Plan on Aging. It must address…person-centered care.

Governor Newsom is really speaking about two related issues. The first is the financial impact of the aging baby boomers as they become sick and place huge burdens on Medi-Cal. He states that long term care expenses will double in 25 years, and that’s probably a low estimate.

The second issue regards caregiving. Most caregivers will be family members because there will be a shortage of professional caregivers and most families won’t be able to afford their cost. Many of you reading this are or have been caregivers. You know that caregiving is tough! It changes your life, let alone that of the person receiving the care.

It’s likely that Governor Newsom will bring a new sense of purpose to Sacramento and propose new solutions to aging and caregiving in California. Goodness knows we need new caregiving solutions right away. We now have a patchwork of many public and private agencies providing caregiving to various segments of our population, who often don’t know of or understand the programs that are available. There’s a possibility that the Governor will appoint one person to try to simplify and consolidate these programs.

The most comprehensive study on caregiving I know of is “Beyond Dollars” by Genworth Financial, which researched some 1,200 caregivers, care recipients, and family members in 2018. The big takeaway is that caregiving takes a significant toll on the financial, physical and emotional lives of the families and friends of every care recipient. No surprise here, but look at some of the statistical conclusions:

  • 60% of caregivers had to cut back on luxury expenditures
  • 41% of caregivers had depression and feelings or resentment
  • 53% had a high level of stress
  • 46% believe their health and well-being was negatively affected
  • 52% did not feel qualified to provide physical care
  • 48% had to reduce their quality of living
  • 70% missed time from work
  • 30% missed career opportunities
  • 50% have less time for their spouse, children and themselves
  • 63% had to pay for care with their own savings/investments
  • Family caregivers spent an average of 21 hours/week on caregiving
  • Family caregivers spent an average of $10,423/year in out-of-pocket expenses.

One can see from these numbers what a devasting impact a sick family member can have on the entire family. There are now a variety of products that provide long term care solutions. Are you sufficiently educated on these various options?

Who is California Long Term Care Insurance Services, Inc.?

Who is California Long Term Care Insurance Services, Inc?

We have become California’s largest independent long term care insurance brokerage. The organization is run by three professionals who, together, have 100 years of exclusive long term care insurance experience, and have sold $50,000,000 of long term care insurance premiums. We expect to continue to grow over many years.

The brokerage has appointed agents statewide. Most of these agents have had many years of long term care insurance experience, and as a group, they are among the most highly trained in the industry. They represent many of the top long term care insurance companies. The agents are given the ability and motivation to custom-tailor a plan to a client’s individual needs.

We specialize exclusively in long term care solutions. There has been a growth of different products intended to solve long-term care problems, and we understand how all of them work. Long term care insurance has become a very complicated product to understand. We believe you deserve expertise to guide your long term care decision, just as you would utilize the expertise of an attorney to guide your estate planning.

Our Mission

The mission of California Long Term Care Insurance Services is to enable Californians to retain their dignity, independence, and assets in the increasingly likely event that they will become sick or injured and need long term care.

Our Goal

Our goal is to give service to our clients the way we would want an agent to give service to us. We strive to have integrity in what we say and do, keep the promises we make, and respect the dignity of our clients. We believe that we are rendering a service that is a needed and essential one for many Californians.

Headquarters – Northern California

1601 Bayshore Highway, Suite 205

Burlingame, CA 94010

(800) 303-1527

Long Term Care Insurance in California

If we had a magic wand, we’d wave it over the beautiful state of California and endow each resident with good health and long term care insurance in California.  California residents would stop worrying and start sleeping better at night, knowing their future care was guaranteed and they would never have to impoverish themselves or be a burden on their families. 

Our magic wand is still in development.  So, in the meantime, if you want to rest, assured that your bases are covered for the future, you’ll need to take action.

Your first step is to read on.

The 5 Ways to Pay for Long Term Care in California

There are 5 ways to pay for long term care in California and we’ll provide highlights of each:

  1. Private pay
  2. Long Term Care Insurance
  3. Life insurance or annuities with long-term care or chronic illness riders
  4. Medi-Cal
  5. Veterans’ Benefits

(Medicare isn’t listed because it’s health insurance, not long term care insurance.  You can’t count on it to pay for long term care.)

Private Pay for Long Term Care in California

If you have gobs of money, you could self-insure and private pay for your long term care; however,  

  • In 2020, California nursing home costs average about $300 for a shared room and $350 for a private room.
  • If you’re in an urban area such as San Diego, Los Angeles, or San Francisco, rates are much higher, up to $497 per day.
  • Let’s figure that out.  Average nursing home stays are about 2.5 years to 3 years, so we’ll use the 3-year cost factor.  Here goes:  Even if we took the lowest rate of $300 × 2.5 years × 365 days, that’s $273,750.
  • If your spouse or partner needs the same care, we’d have to double that fee to $547,500.
  • And, surprisingly, this doesn’t cover everything such as an attendant, medical co-payments, clothes, haircuts, toiletry supplies, and the hairdresser.

Is private paying for long term care in California a good option for you?

Long Term Care Insurance in California

Long term care insurance in California pays for care at home or in an assisted living facility or nursing home.  Policies are customized so that you can:

  • Include a deductible to reduce premiums
  • Purchase policies of different lengths such as a 3-year policy or a 5-year policy.
  • Get your insurance premiums back if you never use the policy.
  • Buy a life insurance rider to leave an inheritance for loved ones or pay last bills.
  • Include an inflation rider so that your coverage increases as California long-term care fees increase.
  • Consider a myriad of other features that are a good fit for you.
  • Fees for Long term care insurance in California vary depending on your age, health, and the features you choose.  It’s essential that you consult with a highly qualified LTC insurance professional who knows his or her stuff!

Wouldn’t it make sense to find out more about long term care insurance in California?

Life insurance or annuities:

  • Life insurance or annuities with long-term care or chronic illness riders have become popular.
  • These pay a combination of a death benefit, a long-term care benefit, or a refund.
  • Qualifications to receive benefits are similar to traditional long-term care insurance policies.
  • The rates are normally guaranteed.
  • The cost is greater than the cost of traditional long-term care insurance because you get solutions to two problems instead of just one.

Medi-Cal instead of Long Term Care Insurance in California

Medi-Cal is an important and valuable program.  It pays for health care and nursing home care for those who are impoverished.  To qualify for the program, you must have next to no assets and little income. 

  • This means you must spend down nearly all of your assets to qualify.
  • In addition, all of your income, such as your social security check or pension, will go to the nursing home, not to you.

If you’re truly impoverished, living below the poverty line or close to it, Medi-Cal is a fantastic safety net and you should further explore its benefits.  You are why Medi-Cal exists. 

However, if your income and assets are not at the poverty level, it likely makes sense to explore other ways to pay for long-term care.

Veterans’ Benefits to Pay for Long Term Care in California

In great appreciation of service to our country, the government does provide limited veteran’s benefits to pay for long term care in California.

  • These benefits are limited to veterans and their spouses, who have few assets and very low income.
  • The veteran must have served a minimum of 90 days, with at least one day during wartime.
  • This program is called Aid and Attendance.

The bottom line is that there are 5 ways to pay for long term care in California. Be sure to analyze your California long term care payment choices, before you need them.  If you would like our help, contact us, we’ll be happy to assist in any way we can.  We look forward to hearing from you.

November is Long Term Care Awareness Month

How will you pay for Long Term Care services?

People work a lifetime to accumulate assets to see them through retirement. Unfortunately, relying on those assets to fund long-term care services may mean:
• Selling stocks or property, cashing in CDs or dipping into 401(k) or savings accounts
• Paying unexpected capital gains tax, income tax and potential surrender charges
• Foregoing returns the liquidated assets were expected to generate
• Abandoning plans to leave an inheritance to children and grandchildren

Planning now means having better choices later.

Life Insurance That Pays For Long Term Care? 2 Birds 1 Stone.

When people think of life insurance, in most cases, they think about end of life. However, did you know that some life insurance policies could also help while you are still alive?

In a recent news article on the spectrum.com they offered an example which, in certain life insurance policies you can opt for a rider that also pays long term care benefits. Should you access those benefits, your overall death benefit is reduced by that amount, up to the value of the insurance.

The long-term care riders are usually attached through an accelerated benefits rider, or extension of benefits rider. The accelerated benefits rider usually kicks in when it has been determined that your life expectancy is 12 months or less.

The extension of benefits rider is just like it sounds, not only do you get the life benefit, but the insurer may also offer long-term care, and for an extra premium, you can add that on to your life policy and have a more complete plan in place, and only pay one premium amount for the coverage.

If you are someone that has some assets to protect, has a concern about income in retirement, and has a concern about your health needs in retirement and like to plan, a life policy with a long-term care rider might be a good place to look.

Before taking any actions though, it is recommended that you speak with your qualified representatives to make sure the plan you are thinking about fits with your tax and other planning needs.

And considering that nearly 70% of people age 65 and older will require some form of long term care health assistance in their lifetime, it would be a wise decision to plan ahead before something happens that prevents you from qualifying for long term care insurance.

Long-term care insurance helps pay for medical needs that Medicare, disability, and normal health insurance does not cover. People that require long-term care often have trouble with performing ADLs (activities of daily living). These activities include eating, dressing, bathing, mobility, continence, or suffering from cognitive impairments.

To start learning about your available options, start your conversation with a California Long Term Care Insurance Services specialist today.

Fill out the form to the right and get started today!

Source: http://www.thespectrum.com/story/news/local/2015/10/08/life-insurance-riders-pay-long-term-care/73614456/

Long-Term Care Insurance Statistics That Affect Your Planning

In a recent Morningstar article on Long Term Care statistics, author Christie Benz, Morningstar’s director of personal finance and author of 30-Minute Money Solutions, outlined industry statistics you should know when planning your insurance needs in retirement.

According to Benz, “Ultimately, the decision about whether to purchase long-term-care insurance is a highly personal one, dependent on an individual’s or couple’s asset level and desire to leave a bequest, health history, and the peace of mind derived from having the coverage, among other factors.”

So what does some of the long-term care insurance and services look like by the numbers Benz researched?

  • 8 Million People experience problems with daily living activities, i.e., bathing, dressing, washing, eating, and other basic needs.
  • 13 Million Adults have difficulty living independently.
  • 44% of men will need long-term care services during their lifetime.
  • 58% of women will need those same services during their lifetime.
  • 4% is the 5 year annual inflation rate in nursing home costs for private and semi-private rooms. If you do not have an inflation rider on your policy, it is worth 4% less each year you own it.
  • $5,518 is the median total household wealth of people that have lived in a nursing home for 6 months or more. Do you think asset protection is important now?
  • $450 Billion is the estimate value of unpaid care provided by friends and family members caring for a loved one.
  • $7.8 Billion is the amount of claims paid for long-term care in 2014.
  • 45% is the number of applications denied to applicants’ age 70-79 who put off planning and now have health issues to manage.
  • 100% if you have not started planning, the time is now.

Contact your California Long Term Care Insurance Services specialist today for a no obligation conversation about your options. Start by filling out the form to the right and downloading your Free Guide.

Source: http://news.morningstar.com/articlenet/article.aspx?id=715947&part=1

Dealing with Long Term Care Insurance Rate Increases

by Louis H. Brownstone 

At first, many carriers saw long term care insurance as a terrific marketing opportunity and rushed into the market beginning in 1988 with competitive prices. For years, agents and brokers sold policies with the understanding that the carriers had appropriately priced their products, and that the chances for rate increases were small. However, the industry was a young one, and no one knew for sure whether or not the pricing would prove to be accurate.

The carriers then broadened the appeal of long term care insurance in the mid-1990s by including home health care as a major benefit, with little increase in premium. These benefits were very attractive to consumers, and they eventually led to a large number of home health care claims.

This, in turn, stressed the profitability of long term care insurance products. By the late 1990s, other problems arose, and carriers saw that their pricing assumptions were incorrect for four major reasons:

  1. Interest rates were well below expectations so that carriers made less gain investing the premiums they received;
  2. Unlike life insurance, lapse rates were extremely low, creating more future policyholder claim potential;
  3. Claims were more frequent, with higher costs and of longer duration than expected;
  4. These factors, in turn, led to higher governmental reserve requirements, tying up assets.

Until now, insurance commissioners have been very resistive of carrier requests for big rate increases because they would impose extreme hardship on senior Americans with limited income and assets. Their emphasis was to protect the consumer, which was the major part of their job. They believed that insurance carriers had created their own problems by underpricing their products in order to sell more. They “made their beds” and needed to sleep in them. Insurance is a gamble, and the carriers have lost, so they said.

But there has been a major change in thinking in the last five years. Insurance commissioners have realized that they need to provide carriers enough flexibility in pricing to enable them to pay future claims. Consumers in turn needed to be confident that their claims would be paid. They would be furious if their thousands of dollars of investment turned out to be wasted.

Insurance commissioners, therefore, needed to grant significant rate increases to protect consumers, and have done so. Because there was such a long period of time in which any rate increases which were granted were small, the rate increases needed now have only become greater as long term care insurance policies have matured.

This has led insurance commissioners to grant one-time rate increases as high as 80% to 95% on major blocs of policies. Carriers have to prove that their requests for rate increases are actually warranted.

In many instances, insurance commissioners are insisting that carriers offer benefit changes which can ameliorate or even prevent any increase in premium. These options can or cannot be acceptable alternatives, depending on the current benefits in a policy..

This discussion should not end without mentioning that the long term care insurance industry has learned a great deal in the last thirty-plus years and that current rates should be far more stable. Hybrid and linked policies often have guaranteed rates, but this may not be such a big point of difference if traditional long term care insurance prices remain stable. Because the hybrid and linked products contain two benefits and the traditional long term care product has only one benefit, the traditional long term care product will probably remain the less expensive alternative.

Have You Accepted The Default Long-Term Care plan?

In a recent article on Marketwatch.com by Retirement Reporter Elizabeth O’Brien, she discussed what the costs for long-term care insurance look like, and how people plan for their health care needs in the future when they are no longer able to care for themselves.

In O’Brien’s article, she references the average cost for a 55-year old couple on a common LTC plan to be around $5,000 per year in premium dollars. While that is a sizable amount for people to budget with insurance, O’Brien comments, “Consumers should think of long-term care insurance as one way to help defray the cost of home health aides or a care facility and to protect their hard-earned nest eggs in the process…”

The article continues on covering the common misconceptions about Medicare and custodial care. Unfortunately, many people believe Medicare covers long-term care expenses. The reality is, while Medicare may cover up to 100 days of skilled nursing, it is not going to cover long-term custodial care. There is a difference between skilled care and custodial care.

O’Brien offers from her research that the median annual cost for private rooms runs over $91,000, and a home health aide could run upwards of $45,000 or more. Without a solid nest egg in place, these costs could easily wipe out any savings available to most families.

An interesting point in the article is how people could end up with a “default long-term care plan”.

“Everybody has a long-term care plan, said Eileen Dunn, a geriatric care manager with Associates of Clifton Park, a Clifton Park, N.Y.-based company that sells long-term care and other insurance to clients of financial advisers. Those who do not consciously make a plan are on the “default plan,” Dunn said. “When something happens, you’re not going to have a choice.” That is, you’re not going to have a choice but to spend down your assets” (O’Brien, 2015, pp. 7)

If you have accepted the default plan as your option, then you should at least research “spend down” requirements for your State, so you know what will happen and how it will affect your family. You can usually get these requirements from the State welfare offices.

The choice is yours, make yours!

Choice 1: I am willing to lose the things I worked for in life.

Choice 2: I want to protect my assets and have a choice.

If you selected Choice 2 and would rather have options in your care, fill out the form to the right and contact a California Long Term Care specialist today to get the conversation started.

Reference:

O’Brien, E., (June 2015) Can you afford $5,000 a year for long-term care insurance? Retrieved 8/9/2015 at http://www.marketwatch.com/story/can-you-afford-5000-a-year-for-long-term-care-insurance-2015-06-25

Long Term Care Insurance Benefits Mean Better Choices

Affordable LTCI Premiums

Katie O’ Rourke
Managing Partner

Many people don’t start thinking about long term care insurance benefits until it’s too late. However, it is important to understand that illnesses and accidents often happen unexpectedly throughout life, and being prepared can help protect you from large out-of-pocket expenses.  

What is long term care insurance?

Long-term insurance, or LTC, is a type of health insurance that will cover long-term care, not having the standard time limitations.

In contrary to what many believe, long term care insurance is not only for elderly, since many people encounter costs for medical care earlier in their life. By signing up before any issues arise, you can protect your future more affordably.

Long Term Care Insurance Benefits Everyone

Many people who become sick, and do not use a long term care insurance plan, will have to rely on family members for help, or end up with debt due to high medical bills. However, if you use long term care insurance coverage, those medical bills won’t be a problem and you will only have to worry about getting better.

What does Long Term Care Insurance cover?

The coverage depends somewhat on the policy you have, but always covers more than your average health insurance plan. LTC usually covers nursing homes, assisted living, home care, respite care, adult daycare, hospice care and even Alzheimer facilities. It can pay for a companion, live-in caregiver, therapist, housekeeper or private duty nurse.

Why consider Long Term Care Insurance benefits on top of my health INSURANCE?

Contrary to what is believed, normal health insurance does not cover the majority of your long-term medical expenses. Even though you have health insurance, you might encounter an expensive surprise when you, or a family member, needs permanent care. Making sure you and your family are taken care of is therefore the number 1 priority.

Home care services

Home care services are essential to people with long-term illnesses. They are usually provided by healthcare professionals or caregivers that can help with everyday activities such as dressing, bathing and eating.

Live-in Caregiver

In some cases, you or a family member might become ill and need the help of a live-in caregiver. This is something that also falls under the Long Term Care Insurance. If you are covered, you won’t have to worry about unpaid medical or care bills, because this type of insurance will take care of everything for you.

These services are not necessarily always for those who are fully debilitated. One of my clients has a full time live-in care giver because she suffers from vertigo and has fallen several times. She needs assistance with bathing, dressing and housekeeping because of her balance problems. However, she still drives and we go out to lunch together regularly. That’s probably not what you expect to hear about someone that needs care.

Everyone can benefit!

Unforeseen circumstances can affect people at any age, including under 65, and to varying degrees. This is a reality that many people neglect to foresee, which unfortunately causes them to be unprepared. Brain tumors, cancer, injuries, accidents, strokes, aids and even mental conditions, can leave you with hefty medical costs if they are not covered by the proper insurance. Therefore, understanding the options and benefits of long term care insurance now can help protect your health, finances and future. Having a plan, means having better choices.

To speak to a representative or schedule an appointment, simply fill out the form to the right to contact us.