Category Archives: long term care insurance prices california

Welcome to our new long-term care insurance blog for California!

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 four 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 insurance. 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

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.

Long Term Care Insurance Cost

You can likely guess that long term care insurance costs might be a valid concern while planning for the future.  After all, in California, the average cost of a shared room in a nursing home is about $300 and for a private room, the cost is about $350 per day.  So, how much is the insurance that pays for nursing home care?

We’ll talk about the cost of long term care insurance, but first we need to be on the same page about what it costs if you or a loved one needs long term care. 

Long Term Care Costs

If you haven’t looked at the numbers yet, this is going to be a shocker.  These numbers are for the state of California.

  • Pulling in the $300/$350 per day, that’s $109,500 to $127,750 a year, on average. 
  • High cost of living areas like San Francisco, San Diego, and Los Angeles demand much higher payments – even up to $497 per day, which is $181,405 per year. 
  • The average stay in a nursing home is 2.5 years.  That’s $273,750, on average, for a shared room. 
  • If a couple needs care, the costs are doubled.  That’s $547,500. 
  • Shockingly, these fees are for basic care; they don’t include personal products like Depends, sitters and attendants, or getting your hair or nails done. 
  • And, lastly, an important question:  With health care costs skyrocketing at more than 4% annually, how much will that nursing home cost by the time you need it?  Yikes! 

Long Term Care Insurance Costs

This is actually good news:

  • All the premiums, you pay over your entire lifetime, will likely be less than the cost of one year in a nursing home. 
  • You can pick a long term insurance policy that fits your budget.  If premiums are going to take food off your table, you shouldn’t buy it, but, otherwise, there are a myriad of ways to make it work. 
  • Long term care annuities allow you to get ALL your money back if you don’t use it to pay for LTC. 
  • Costs depend on how much protection you buy, the options you select, your age at purchase, and your health when you apply for coverage. 
  • Costs vary widely, depending on your coverage selections as well as your age and health.  For example, long term care insurance costs may range from a $1,500 to $7,000+, depending on your individual situation and goals. 

We know the numbers can be overwhelming and you’re not sure what numbers will end up applying to you.  But, we can’t provide specific information for everyone on a website, so we offer a free information conversation.

You are entitled to a free, no-obligation analysis of your individual situation.  Contact us to find out your long term care insurance cost and plan options.  Be sure to ask about long term care annuities as well.  Call now to get the answers you need so you can stop worrying.

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.

Long Term Care Premiums Tax Deductions

There are advantages that you might be eligible for with a Long Term Care Insurance policy.

• Do you own a business?
• Are you aware of the potential Long Term Care tax advantages of owning a business?

You might be interested in a Quick Reference Guide that gives a summary of Long Term Care premium tax treatment for different types of business entities.

Contact us for details

Long Term Insurance Quotes

If paying for long term care is on your mind, you’ve come to the right place for good information and free long term care insurance quotes.  If you want to get started immediately, contact us now for a free quote, with no obligation.

However, if you’d like more information, we invite you to read the next 300 words.  In just two minutes, we’ll point out 3 things you need to know when you compare long term care products and pricing.

The Top 3 Things You Need to Know About Getting Long Term Care Insurance Quotes in California

We feel obligated to provide a few words of advice so you are armed with good information when you’re investigating long term care insurance costs and options.

When you ask for California long term care insurance quotes:

  • Be sure you are comparing apples to apples and not apples to oranges.  This means that there are many different options and a myriad of long term care products available.  Be sure that the product selections are the same when comparing quotes. 
  • Then, take into consideration the quality of the company as well.  You need to make sure that the insurance company will still be there years from now, when you need it.   In addition, you need to understand whether the premiums can be raised and, if so, how often and by how much. 
  • Lastly, consider products other than just straight long term care insurance offerings.  For example, long term care annuities and the hybrid of life insurance with an LTC rider are really hot now.  Find out whether either would be a good fit for you. 

How to Get a California Long Term Care Insurance Quote

Whether you want a quick quote to compare to others you are gathering or you want to ask questions and get professional guidance, we have a team of highly trained professional ready to take your call. 

Of course, there’s no cost or obligation when you call to learn about California long term care insurance products or to get a quote.  We look forward to serving you.

 

Don’t Forget About This LTC Gap In Your Retirement Planning!

bridge_the_ltc_gapWhen thinking about retirement, Medicare might come to mind. Depending on your prescription drug needs, it is possible you could hit what is lovingly referred to as the “donut hole” where coverage for your drugs stops until you reach the next coverage point.

For many people this gap in prescription drug coverage can cost several thousand dollars, but insurers have come up with options to provide some coverage in the donut hole.

However, the gap we are referring to is not the Medicare donut hole.

The gap we are referring to could potentially cost hundreds of thousands of dollars, leave your estate drained, and cause hardship among your loved ones when reality finally sets in, and the bills come due.

The shocking truth is that most people in the US have failed to plan for long-term care costs. Considering almost 70% require some form of long-term care in retirement, it is hard to believe it goes unplanned.

There is a simple 2-step fix to this issue though.

Step 1 is to determine if there is a gap and how much it is. This can be done quick and easy by using the US Department of Health and Human Services calculator at the following link:

http://longtermcare.gov/savings-calculator/

When you get to this page you will be asked a few simple questions such as your age, your gender, where you plan to retire, the amount you can save each month to pay for future long term care, and the expected rate of return you will get from your investment of that money.

To save you some time, we took the liberty to come up with several calculations and outlined them here:

Female Age 55, Plans to retire in California, Saves $500 per month at 10% return

Your Results

*Cost of care in California (adjusted for inflation): $784,878.00
Your projected savings amount: $649,091.00
The gap between cost of care and your savings plan: -$135,787.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation): $1,001,725.00
Your projected savings amount: $1,085,661.00
The gap between cost of care and your savings plan: +$83,936.00

Female Age 55, Plans to retire in California, Saves $500 per month at 5% return

Your Results

*Cost of care in California (adjusted for inflation): $784,878.00
Your projected savings amount: $300,681.00
The gap between cost of care and your savings plan: -$484,197.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation): $1,001,725.00
Your projected savings amount: $418,565.00
The gap between cost of care and your savings plan: -$583,160.00

Male Age 55, Plans to retire in California, Saves $500 per month at 10% return

Your Results

*Cost of care in California (adjusted for inflation): $509,006.00
Your projected savings amount: $649,091.00
The gap between cost of care and your savings plan: +$140,085.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation): $649,635.00
Your projected savings amount: $1,085,661.00
The gap between cost of care and your savings plan: +$436,026.00

Male Age 55,

Plans to retire in California, Saves $500 per month at 5% return

Your Results

*Cost of care in California (adjusted for inflation): $509,006.00
Your projected savings amount: $300,681.00
The gap between cost of care and your savings plan: -$208,325.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation)    $649,635.00
Your projected savings amount          $418,565.00
The gap between cost of care and your savings plan  -$231,070.00

Step 2 is also simple. Contact a California Long Term Care Insurance Services Specialist today for a no obligation planning session to help you cover the gap in your retirement plan when it comes to your health.

Fill out the form to the right of this page, download your Free guide and get started now!

*The cost of care was based on an estimate of long-term care spending over remaining life at age 65. The key assumptions are that 69% use some form of LTC (paid & unpaid) with 58% having LTC payments. In 2005 real dollars, for those that use services, the average was $150,000. Women ($166,878) use more than men ($108,180). On average those who use LTC, the average length of use is 4.35 years with 2.3 years being paid.

Long-Term Care Insurance Statistics That Affect Your Planning

long-term care insurance statisticsIn 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

What Can Kansas Teach California About Long Term Care Insurance?

About California Long-term care insuranceAccording to a recent article by journalist Megan Hart for cjonline.com, she noted that although Kansas has seen long-term care insurance premiums rise as much as 60%, this policy makes sense for those with assets to protect in retirement.

You have probably heard a number of stories about long-term care insurance premiums going up, often double-digit increases. There is a good explanation for this phenomenon.

The fact is, we are living longer, and the smart ones that get the benefit of long-term care insurance protection are keeping their policies longer. Some insurance companies that priced long-term care insurance many years ago based their models on people not living as long, and letting their policies cancel.

This is no longer the case for long-term care insurance protection. Long-term care insurance covers health and medical needs not found in Medicare or disability insurance. The items long-term care covers are nursing home services, assisted living services, in-home care, and/or adult day services.

The confusion over long-term care and Medicare comes from one specific Medicare benefit. According to Hart, “Medicare covers short-term nursing home care only after a beneficiary has been hospitalized.” This benefit is also limited to 100 days of care.

Where long-term care insurance steps in is when the condition is chronic, i.e., stroke, certain types of cancer that require living assistance, dementia, Alzheimer’s, MS, and many other health conditions that can prevent a person from being able to perform certain activities of daily living independently.

These activities of daily living are the ability to dress, bath, eat, and care for yourself without assistance. The most shocking statistic we have read to date is that 70% of people age 65 and older will require some form of long-term care health assistance.

It is possible to qualify for Medicaid (Government Help) to pay for long-term care services in a nursing home, but the typical asset limit to qualify is under $2,000. So, if you are someone that has been able to save a nest egg, and you would like to protect it, long-term care insurance could be the shield that protects your nest from financial destruction.

Getting the conversation started about long-term care insurance is easy and only takes a few minutes. Start now filling out the form to the right of this page and by contacting your licensed California Long Term Care Insurance Services specialist today!

Source: http://cjonline.com/news/business/2015-09-19/kansas-insurance-department-long-term-care-coverage-makes-sense-some

What Can Japan Teach California About Long Term Care?

Long-term care JapanIn a recent Forbes article, contributor Chris Farrell, award winning journalist and senior economics contributor to Next Avenue, discussed how Japan’s policies and vision of long term care has shifted over time.

When you think of Japan and their culture you might think about how the younger generations are to care and respect their parents and elders.

However, with the shift in their economy and changing family values, according to Farrell, “Japan’s family-centered approach foundered, due to demographic and economic changes. Daughters and daughters-in-law — the primary caregivers — grew overwhelmed by the task, especially with the trend toward fewer children and more women joining the workforce.”

Farrell continues his discussion on how what we may think about Japanese children caring for their elders showed in a 1994 survey that one in two caregivers treated frail older relatives abusively; one of three also reported feelings of hatred.

The financial and emotional toll endured when taking care of an elder loved one who is no longer able to dress, bath, feed, and/or care for themselves is hard for trained people, let alone, the untrained people with an emotional connection.

Sadly, although we have the best intentions at heart when we talk about willingness to care for mom and dad, or hope that our kids will take care of us in our old age, we should never expect the people we care for to sacrifice their own life for ours; that is truly selfish.

The average American age 55 to 64 has a median retirement savings of $104,000 according to the National Institute on Retirement Security. The 70% of people age 65 and older who will access long term care services during their lives, “can expect to incur costs of $138,000, on average” according to Melissa Favreault of the Urban Institute and Judith Dey of the U.S. Department of Health and Human Services.

Remember, that is an average, some will be substantially more, others will be less.

Do you see the problem?

It is important when considering your future heath care planning needs that you also take in account the emotional and financial needs of the people that you care for to.

It is time to start planning your long-term care health insurance today.

Contact your California Long Term Care Insurance Services agent today.

Source: http://www.forbes.com/sites/nextavenue/2015/08/24/what-japan-can-teach-us-about-long-term-care/