Tag Archives: Long Term Care

Exchanging Your Tax Deferred Annuity To One With A Tax Qualified Unlimited Long Term Care Rider

Annuity, Long Term Care, , , , ,

CASE STUDY:

Creating an LTC Plan by Exchanging Your Tax Deferred Annuity To One With A Tax Qualified Unlimited Long Term Care Rider

Client Profile:  Ted is 72 and Jane is 68.  They have planned well and their children are grown and financially independent.  Their portfolio is conservatively invested.  They are interested in asset preservation.  They just reviewed their Medicare and Medicare Supplement policy and they are concerned about their “exposure” to long-term care.

Objectives:     Protecting their retirement income by plugging up the holes in Medicare that expose their nest egg to un-insured LTC expenses.

Strategy:          Cover both Ted and Jane with a 1035 exchange of their $ 103,500 Annuity (out of surrender with cost basis of $ 60,000) to a One America Annuity with a “tax qualified” LTC rider.  Since this is a tax qualified LTC policy, the gain in the annuity can be sheltered.

Snap Shot
One America Annuity Care
 Joint Age 70
1035 Exchange Annuity to Annuity
Creates LTC for both spouses
1035 Exchange Annuity to Annuity Care  $103,500
COB rider creates catastrophic LTC coverage that can never be exhausted Unlimited
Coverage includes: Home Care, Assisted Living, Skilled Nursing Home, memory Care  $3,000 per month each spouse
Combined Monthly Premium for   COB Rider $219 per month
Can never be increased

Highlights:  Shelter the gains in the Existing Annuity Policy
                         Both spouses can be on claim at the same time
                         LTC can never be exhausted

Deadline 5/31 for Women to Apply at Current Low Premiums with Life Secure

Long Term Care, , , , , , , ,

Life Secure (owned by Blue Cross Blue Shield of Michigan) has just announced that like the rest of the nation’s Long Term Care insurers, they will change their premium price structure for women. They have already filed the paperwork with the California Department of Insurance to update to their new policies. In fact, on June 1st they will be suspending LTC sales in California until their new policies are approved.

The premium cost for women, effective after 5/31 will be a minimum of 25% higher, even more for single women.

There is a 2 week window of opportunity, before Life Secure catches up to the other LTC companies.

The “sex” distinct pricing reflects an industry wide long term care claims history that women account for two of every three LTCi claims benefits paid. Genworth, Mutual of Omaha, Transamerica and John Hancock have already implemented a gender pricing structure.

Here is an “apples to apples” annual premium comparison for a married female age 55 for a $ 250,000 policy.

 

ANNUAL PREMIUM
     Life Secure       $1,419     
     Mutual of Omaha       $1,796     
     Genworth       $2,493     
     TransAmerica       $2,030     
     John Hancock       $2,611     

 

The message is clear – if you are a woman, or married to one, waiting to act is going to assure that a plan will be more expensive.

If your application reaches Life Secure prior to May 31, you will still have 4-6 weeks to think about LTC before finalizing the coverage.

If you think you want long-term care insurance, now is the time to apply!

Genworth Changing to gender rating: 3 weeks to apply at current low lower premiums

Long Term Care, , , , , , , ,

Yesterday, Genworth announced that like the rest of the nation’s leading insurers, they will change their premium price structure for women effective September 10, 2015.

The premium cost for women, effective after 9/10 will be a minimum of 25% higher, even more for single women.

There is a 3 week window of opportunity, before Genworth catches up to the other major companies.

The “sex” distinct pricing reflects an industry wide long term care claims history that women account for two of every three LTCi claims benefits paid. Mutual of Omaha, Transamerica and John Hancock have already implemented a gender pricing structure.

Here is an “apples to apples” annual premium comparison for a married female age 55 for a $ 250,000 policy.
     ANNUAL PREMIUM
     Genworth “Flex” (closes Sept 10th)      $1,116.68
     Mutual of Omaha      $1,516.29
     TransAmerica      $1,671.82
     John Hancock      $1,523.20

The message is clear – if you are a woman, or married to one, waiting to act is going to assure that a plan will be more expensive.

If your application reaches Genworth prior to September 10, you will still have 6-8 weeks to think about LTC before finalizing the coverage.

If you think you want long-term care insurance, now is the time to apply!

 

Coverage Limits of Long Term Care from Medicare and Private Health Insurance

Long Term Care, Medicare, , , , , , ,

Many families are in disbelief when a Skilled Nursing Facility Discharge Planner notifies them that they need to prepare for their loved one to come home because Medicare has not approved any more benefits.

As you can see, after day 100, Medicare does not pay for extended care.  If Medicare does not approve, then the Medicare Supplement does not kick in either.  On average, most patients are discharged within 20 days.

The below chart shows the most common types of insurance and the very limited long-term care coverage they provide.

Coverage Limits of Long-term care (LTC) Offered by Health Insurance

LTC Service Medicare Medigap Insurance Private Insurance
Overview Limited coverage for nursing home care following a hospital stay and home health if you require a nurse or other skilled provider Insurance purchased to cover Medicare cost sharing Varies, but generally only covers services for a short time following a hospital stay, surgery or while recovering from an injury
Nursing home care Pays in full for days 1–20 if you are in a Skilled Nursing Facility following a recent 3-day hospital stay. If your need for skilled care continues, may pay for the difference between the total daily cost and your copayment of $137.50 per day for days 21-100. After day 100 does not pay May cover the $137.50 per day copayment if your nursing home stay meets all other Medicare requirements Varies, but limited
Assisted living facility Does not pay Does not pay Does not pay
Continuing Care  retirement community Does not pay Does not pay Does not pay
Adult day services Not covered Not covered Not covered
Home care Limited to reasonable, necessary part-time or intermittent skilled nursing care and home health aide services, some therapies if a doctor orders them, and a Medicare-certified home health agency provides them. Does not pay for on-going personal care or only help with Activities of Daily Living (also called “custodial care”) Not covered under current policies. Some policies sold prior to 2009 offered an at-home recovery benefit that pays up to $1,600 per year for short-term at-home assistance with activities of daily living (bathing, dressing, personal hygiene, etc.) for those recovering from an illness, injury, or surgery Varies, but limited

10 Tips for Choosing a Long Term Care Insurance Agent

Long Term Care, , , , , , ,

Consider choosing a Long Term Care Insurance Agent in the same way you choose any other professional: properly trained, experienced and someone who stays up to date on the latest strategies.

Long Term Care planning is a specialized field. There are different types of long term care policies, and premiums are driven by many different factors.

By utilizing the following tips, you will be better able to choose an Agent that will assist you in making the best choice for you and your family.

Tips

  1. The California Partnership for Long Term Care describes a “good long term care agent” as an agent who is a genuine listener, an educator and a problem solver. Their primary focus is to identify your concerns and help establish your goals and needs.

Visit http://www.rureadyca.org/what-makes-good-long-term-care-insurance-agent

  1. You will want an agent that is knowledgeable about Medicare, Medigap, Medicare Advantage Plans and Medi-Cal. Understanding how Health Insurance and Medicare work will be important in your decision making because long term care policies pay for custodial care that is specifically excluded from a health care policy.

Visit http://longtermcare.gov/medicare-medicaid-more/medicare/

  1. Confirm that the agent has gone through the proper training to work with the California Partnership for Long Term Care. Even though you may not need or choose this type of policy, certification indicates a well informed serious agent.

Visit  http://www.dhcs.ca.gov/services/ltc/Pages/CPLTC.aspx

  1. Ask the agent to provide a list of highly rated insurance companies they represent and have been appointed by. At a minimum you will want the A.M. Best rating for each company (A.M. Best is a U.S. based rating agency headquartered in New Jersey, which focuses on the insurance industry). It’s important to have a solid, established carrier since claims can be years away.

Visit http://www.ambest.com/

  1. It is helpful if the agent has an association with a large Long Term Care Brokerage as you may need some assistance in the future. It is important to have a strong advocate during the application or claims process.
  1. Determine that the agent is well versed in different types of planning strategies. This will include both the conventional type of policy and also the hybrid or linked policies that combine life insurance and long term care benefits.
  1. Ask if the agent will appeal your application in the event of a decline. Mistakes are made and sometimes a declined application can be reversed if an agent is willing to go the extra distance.
  1. Require a side by side comparison on a spreadsheet that will include different types of long term care planning strategies, corresponding benefits, premiums, as well as the pros and cons of each.
  1. Confirm the agent or the agent’s brokerage facilitates the claims process. Ask what can be expected if a claim is made because this is when you need support most!
  1. Arm yourself with as much information as possible prior to your meeting. An expert always enjoys working with a savvy well informed client!