Long Term Care Insurance Rates Account For 2013 Change

The impact of the changing reserve requirements for long term care insurance has generally already been taken into account and isn’t expected to create further rate increases starting next year according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance.

“We’ve had several recent calls from consumers after being told by a financial planner that rates for insurance would ‘increase significantly’ in 2013,” Slome explains.  “The new discount rate will have minimal impact on long term care insurance and in many cases has already been taken into account by insurers.”

According to Slome, the ‘valuation discount rate’ used for calculating statutory reserves or capital requirements for long term care insurance is dropping from 4 percent to 3.5 percent for new business starting in 2013.  “The rate is tied to Treasury yields based on a complicated formula,” Slome notes.  “It automatically updates when new money rates change over a period of time.”

Five-year Treasury rates are at historic lows (0.62%) and 10-year yields are at 1.59 percent as of September 4, 2012.  “By comparison, both five and 10-year rates were 4.68 percent on January 1, 2007 and 2.65 percent and 4.60 percent as recently as January 4, 2010.

“Low interest rates have been the primary cause of increasing rates for long term care insurance and have impacted other insurance lines including fixed annuities as well as life and disability insurance,” Slome states.  “To compensate for every one percent decline in interest rates which equates to lower investment income, an insurer needs a 10-to-15 percent increase in premiums.   The drop in just the past two years has had an enormous impact.”

The Association reports that the changing reserve requirements that take effect January 1^st are designed to provide added protection to policyholders.  “The half percent drop in reserve rates will have a nominal impact on premiums,” Slome.  “The impact depends on a policy’s duration but is in the two-to-five percent range.”

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more about long term care insurancecosts call the organization’s offices at (818) 597-3227 or visit the Association’s website.

New Robots Aid In Caring For Japanese Seniors

A new robot has brought Japan one step closer to its goal of providing high-quality care for its growing elderly population.

The robot uses high-precision tactile sensors and flexible motor control technology to lift patients weighing up to 80kg (180 pounds) off floor-level bedding and into a wheelchair. The developers note this is intended to free care facility personnel of one of their most difficult and energy-consuming tasks.

Japan's elderly population in need of nursing care is projected to reach a staggering 5.69 million by 2015 experts explain. "Japan faces an urgent need for new approaches to assist care-giving personnel," states Jesse Slome, executive director of the American Association for Long-Term Care Insurance http://www.aaltci.org. "The United States will soon be facing the very same issues."

Care experts noted that one of the most strenuous tasks for such personnel, carried out an average of 40 times every day, is that of lifting a patient from a futon at floor level into a wheelchair. Robots are well-suited to this task, yet none have yet been deployed in care-giving facilities.

In 2009, the RIKEN-TRI Collaboration Center for Human-Interactive Robot Research (RTC), a joint project established in 2007 and located at the Nagoya Science Park in central Japan, unveiled a robot called RIBA (Robot for Interactive Body Assistance) designed to assist in this task. The first robot capable of lifting a patient from a bed to a wheelchair and back, RIBA charted a new course in the development of care-giving robots, yet functional limitations prevented its direct commercialization.

In the future, Japanese researchers plan to work together with partner nursing care facilities to test RIBA-II and further tailor it to the needs of care-givers and their patients. They explain their intent to also develop new applications in areas such as rehabilitation.

Robots will one day enable individuals to remain in their own home rather than being forced into skilled nursing facilities, Slome predicts. "This should be a most welcome development for millions of Americans though they can expected to be costly," he notes "People will either need to have the savings or insurance to cover the cost." Current forms of long-term care insurance that provide cash payments would cover the rental or purchase of robots.

The Association urges consumers to learn more about long-term care planning and get long-term care insurance cost from a designated expert via the organization's Consumer Information Center at http://www.aaltci.org/long-term-care-insurance/free-quote/. "The best ages to start planning are between ages 52 and 62 when costs are lowest and you don't risk being declined because of existing health conditions," Slome explains.

Smoking And Weight Tied To Future Brain Shrinkage, Increased Long Term Care Insurance Need

Smoking, having high blood pressure or diabetes and being overweight during your middle years may cause brain shrinkage and lead to cognitive problems up to a decade later.

According to a new study published in Neurology, the medical journal of the American Academy of Neurology these factors appear to cause the brain to lose volume. Some 38.7 million Americans age 65 and older reported having one or more cognitive disorders according to the 2011 Long-Term Care Insurance Almanac published by the American Association for long-Term Care Insurance.

Health conditions increased the development of lesions secondary to presumed vascular injury, and also appeared to affect its ability to plan and make decisions as quickly as 10 years later. The findings provide evidence that identifying these risk factors early in people of middle age could be useful in screening people for at-risk dementia and encouraging people to make changes to their lifestyle before it's too late.

The study involved over 1,300 people without dementia with an average age of 54. Participants had body mass and waist circumference measures taken and were given blood pressure, cholesterol and diabetes tests. They also underwent brain MRI scans over the span of a decade, the first starting about seven years after the initial risk factor exam. Participants with stroke and dementia at baseline were excluded, and between the first and last MRI exams, 19 people had a stroke and two developed dementia.

Researchers found that people with high blood pressure developed small areas of vascular brain damage, at a faster rate than those with normal blood pressure readings. They also had a more rapid worsening of scores on tests of executive function, or planning and decision making, corresponding to five and eight years of chronological aging respectively.

People with diabetes in middle age lost brain volume in the hippocampus at a faster rate than those without diabetes. Smokers lost brain volume overall at a faster rate than nonsmokers and were also more likely to have a rapid increase in white matter hyperintensities.

"Unhealthy habits come back to haunt millions at older ages," explains Jesse Slome, executive director of the long term care insurance association. "It creates an increased risk of needing long term care in your 80s and 90s a reason why planning prior to retirement is a must especially for those still in good health."