Americans Fail Long Term Care Insurance Planning Quiz

When it comes to knowledge about long-term care insurance planning, Americans once again received a failing grade.

Long-term care poses the single largest risk to Americans living on retirement savings and income according to the American Association for Long-Term Care Insurance, the industry trade group. Yet, few consumers have the facts correct when it comes to understanding available planning options.

As the U.S. population ages, the percentage of people older than 65 will increase from about 13% in 2009 to 20% in 2040. Part of the projected increase is due to an increased life expectancy beyond age 65. After retirement health insurance and Medicare provide very little long-term care benefit, if any, according to financial planning professionals.

The results of a just-released national study of individuals between 40 and 70, most reported knowing what long-term care is and how much it costs. But their scores fall short when it comes to knowing what percentage of people will need long-term care and how they will pay for it. According to the study conducted by the MetLife Mature Market Institute, just about four in ten adults (36%) know that 60-to-70 percent of 65-year-olds will require long-term care services at some point in their lives. Just over one-third knew that most long-term care services are received at home.

While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall.Few participants in the survey reported that they are taking action to protect themselves from such potentially catastrophic expenses; only 18% know long-term care insurance rates are based on age, but almost nine in ten (87%) are aware that a comprehensive long-term care policy covers home, assisted living and nursing home care.

The survey also reported that eight in ten respondents (85%) understand that long-term care could have many causes, such as Alzheimer's disease, an accident or a chronic or disabling condition. More than four in ten (43%) are able to correctly identify the national average monthly cost for assisted living.

For more information on long-term care insurance, visit the Association's Consumer Information Center where you can read the organization's free guide on reducing the cost of long-term care insurance. Click here to read the guide.

Long Term Care Insurance Marketing Tools Available

November is national Long-Term Care Awareness Month, an outstanding opportunity for insurance and financial professionals to communicate with clients and prospects about this important protection.

The American Association for Long-Term Care Insurance, the industry's professional trade organization, has created a variety of marketing tools for use by agents and brokers. The tools consist of a direct mail letter to be sent to prospects as well as an E-card that can be personalized and E-mailed by the agent. The E-card is private so that only the recipient is notified and can directly reply back to the sending agent. These tools are available free of charge for use by all agents via the Association's website. Click here to access the free marketing tools:

In addition, a number of special tools have been created for use by Association members. These include a press release that can be personalized with the agent's information and distributed to local media. A letter for mailing to secure radio interviews is also available within the Association's Online Learning, Marketing & Sales Center.

Membership in the American Association for Long-Term Care Insurance remains $49 through December 31, 2009 after which it will increase to $99. For more information, click here to visit the Association's website.

Long Term Care Insurance Trade Organization Applauds Baucus Proposal

The American Association for Long-Term Care Insurance, the industry's national professional organization, commended Senate Finance Committee Chairman Max Baucus (D-Montana) for including a proposal to allow cafeteria plans to offer qualified long-term care insurance as part of his health care reform package.

The proposal was part of the Senator's "America’s Healthy Future Act," health care reform legislation which the Senator notes is intended to lower costs and provide quality, affordable health care coverage.

The health care reform proposal will make it easier for families and small businesses to buy health care coverage including long-term care insurance, ensure Americans can choose to keep the health care coverage they have if they like it and slow the growth of health care costs over time. The Finance Committee will meet to begin voting on the Chairman’s Mark next week.

The proposal recommends creation of a Simple Cafeteria Plan – a vehicle through which small businesses can provide tax-free benefits to their employees. This change would ease the participation restrictions and include self-employed individuals as qualified employees. The proposal also exempts employers who make contributions for employees under a simple cafeteria plan from pension plan nondiscrimination requirements applicable to highly compensated and key employees.

Finally, the proposal allows for qualified long-term care insurance to be provided under a cafeteria plan to the extent the amount of such contributions does not exceed the eligible long-term care premiums for the contract. This proposal is effective beginning on January 1, 2011.

The full text of the America’s Healthy Future Act is available at http://finance.senate.gov/sitepages/leg/LEG 2009/091609 Americas_Healthy_Future_Act.pdf

What Do Consumers Pay For Long-Term Care Insurance

The Partnership program provides enormous benefit for consumers. It also provides significant benefit to insurance professionals.

One of the most important benefits is the gathering of relevant information. The following is preliminary information gathered from the Partnership States. While the numbers may change, it sheds an important light on the subject of what people pay for long-term care insurance protection. It clearly shows that the majority of consumers are spending far less for long-term care insurance protection than what's reported in the consumer media.

The following data is based on over 70,000 individuals (under age 61) purchasing Partnership long-term care insurance policies between January 1, 2009 and June 30, 2009.

Premium Amount Percentage
Less than $500 18.1%
$500 - $999 33.2%
$1,000 - $1,499 11.1%
$1,500 - $1,999 10.2%
$2,000 - $2,499 7.6%
$2,500 - $2,999 6.0%
$3,000 - $3,499 4.7%
$3,500 - $3,999 3.3%
$4,000 and Over 5.3%

Why are these numbers so important?

Because, here is the number a highly respected organization reports to the media: "The average individual buyer in the first three months of 2009 is paying $2,129 during the first year of coverage." (June 8, 2009)

If consumers perceive $2,129 is the cost (that's $4,258 for a couple) they are going to believe that long-term care insurance is EXPENSIVE. And, they are not going to buy.

BUT 72.6% PAID LESS THAN $2,000. And more than half paid LESS THAN $1,000.

It is very hard to overcome perceptions. Let's hope facts will help. Certainly the American Association for Long-Term Care Insurance and our members are doing all they can to properly educate consumers and other professionals.

Jesse Slome
Executive Director
American Association for Long-Term Care Insurance

More Low-Cost Long-Term Care Insurance Sold

More than half of Americans purchasing long-term care insurance paid less than $20 a week according to a new report by the American Association for Long-Term Care Insurance, the industry trade group.

According to an analysis of over 100,000 policies sold during the first half of 2009, the majority of individuals age 61 and younger paid under $1,000 a year for protection (less than $20 a week). Just over half (51.3%) of long-term care insurance policies sold to individuals in Partnership states cost under $1,000 a year. Nearly one in five cost less than $500 a year.

"Most people mistakenly believe long-term care insurance is expensive," states Jesse Slome, executive director of the organization. "The cost depends on how much coverage you buy, your age and health when you apply." Less than 10 percent of purchasers spent more than $100 a month for new policies purchased.The majority of those purchasing Partnership long-term care insurance policies were between ages 46 and 60.

The Partnership is a program authorized by Congress that makes available long-term care insurance protection from leading insurers. Partnership-approved policies provide special features and asset spend-down protections. Some 30 states now have long-term care Partnership programs in place.

Nearly half (48.2%) of buyers purchasing Partnership long-term care insurance policies in the first half of 2009 were between the ages of 46 and 60. Some 31 percent were over age 60 and nearly 20 percent were age 45 or younger.

Cut Risk Of Long-Term Care Need With Early MRI

A new study finds that MRI scans could be used to diagnose Alzheimer's disease in the early stages, which could lead to improved treatment. Every 72 seconds, someone in the United States develops Alzheimer's disease according to the American Association for Long-Term Care Insurance, the industry trade group.

Researchers from the Cleveland Clinic report that the brains of people in the very early stages of Alzheimer's disease might become hyperactive to compensate for disease-related deterioration. The scientists tested mentally healthy adults, two-thirds of whom were at risk for Alzheimer's because of family history or genetic markers.

MRI scans monitored the participants' brains as they were asked to recognize famous celebrities and unfamiliar people. The brain activity of at-risk people was then compared with that of those not at risk for Alzheimer's.

The researchers reported an increased level of activation of certain parts of the brain in at-risk individuals. They note this may reflect a compensatory brain response by these participants to the earliest stages of Alzheimer's disease. An estimated 5.1 million Americans have Alzheimer's which is one of the most costly causes of long-term care by older individuals.

Researchers noted that functional MRI scans might eventually be used to delay the onset of Alzheimer's disease by five years. They added that by delaying the onset by 10 years, Alzheimer's disease will virtually be eliminated because people will have passed away for some other reason. The findings are published in the current issue of Neurology.

Long Term Care Insurance Women Planning Matters

Long term care insurance planning for women is vitally important. Women have the greatest need for long-term care. Women receive 65 percent of all benefit payments from individual long-term care insurance. Women who are married can benefit from significant spousal discounts. Women living alone pay the exact same for long-term care insurance protection as men (even though they are far more likely to gain a benefit from their coverage).

Consumers seeking free information or no-obligation quotes for this protection should visit the Consumer Information Center of the American Association for Long-Term Care Insurance.

This consumer education video has been produced by the American Association for Long-Term Care Insurance, the industry's professional trade organization.