The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2010. "For the first time, the maximum deductible limit for an individual exceeds $4,000," explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance , the national trade organization.
"The federal government and an increasing number of states are sending a clear signal that individuals need to plan for long-term care and tax deductibility and tax credits certainly make long-term care insurance more attractive to millions," Slome adds. "It is a positive sign to see limits for long-term care insurance deductibility increase especially when pension contribution limits for 2010 were not increased."
The end of the year provides a double tax-saving incentive for consumers. There is still time to take advantage of tax deductions in 2009 and also benefit from the increased deductible limits next year.
The 2010 deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
Age 40 or less: $ 330
More than 40 but not more than 50: $ 620
More than 50 but not more than 60: $1,230
More than 60 but not more than 70: $3,290
More than 70: $4,110
A complete explanation of tax deductible rules for individuals and business owners can be found on the Association's website: Click here for 2010 tax deductible limits.
Thứ Hai, 19 tháng 10, 2009
Thứ Sáu, 9 tháng 10, 2009
Long Term Care Insurance Coverage Question Regarding Penn Treaty Liquidation
I am still learning much about the Internet. I recently created a LinkedIn group for long-term care insurance producers and others. There have already been some interesting discussions between the members and I'd encourage you to consider joining.
I'm not 100% sure how to join groups ... but I know you can do so by first getting linked to me (which I'm happy to do). Go to:
http://www.linkedin.com/in/jesseslome
If there's a better way ... let me know.
Once on my LinkedIn page, you want to click on the the group Long-Term Care Insurance Producers. (Look on the lefthand side at the top). You do NOT want the one USA - AALTCI (someone smartly created that group ... not me ... and thus I can not monitor or make sure it serves what I believe is the intent).
Anyway ... there are currently about 101 participants ... and some good stuff.
Jesse Slome
American Association for Long-Term Care Insurance
Below is one of the questions and responses that I believe will be of interest.
Question from Kathleen Smith
After the latest news on Penn Treaty, I revisited the AALTCI 2009 Sourcebook article on State Guaranty Associations. I know that LTCi is protected up to $100,000. But, what does that mean to policy holders not on claim? If they have a 5 year/$250,000 policy benefit does their premium remain the same with it being paid to the State? If so, is their premium adjusted to reflect a $100,000 policy benefit rather than a $250,000 benefit pool compounding annually? ...
The response which I obtained from Sean McKenna at the National Association which comprises all the State Guaranty Associations.
The new NAIC Guaranty Association Model Act recommends $300,000 for LTC coverage. A number of states either have passed the new model limit or have it under consideration now. In answer to your second question, no, the premiums do not decline.
Sean McKenna
Director of Communications
NOLHGA
I'm not 100% sure how to join groups ... but I know you can do so by first getting linked to me (which I'm happy to do). Go to:
http://www.linkedin.com/in/jesseslome
If there's a better way ... let me know.
Once on my LinkedIn page, you want to click on the the group Long-Term Care Insurance Producers. (Look on the lefthand side at the top). You do NOT want the one USA - AALTCI (someone smartly created that group ... not me ... and thus I can not monitor or make sure it serves what I believe is the intent).
Anyway ... there are currently about 101 participants ... and some good stuff.
Jesse Slome
American Association for Long-Term Care Insurance
Below is one of the questions and responses that I believe will be of interest.
Question from Kathleen Smith
After the latest news on Penn Treaty, I revisited the AALTCI 2009 Sourcebook article on State Guaranty Associations. I know that LTCi is protected up to $100,000. But, what does that mean to policy holders not on claim? If they have a 5 year/$250,000 policy benefit does their premium remain the same with it being paid to the State? If so, is their premium adjusted to reflect a $100,000 policy benefit rather than a $250,000 benefit pool compounding annually? ...
The response which I obtained from Sean McKenna at the National Association which comprises all the State Guaranty Associations.
The new NAIC Guaranty Association Model Act recommends $300,000 for LTC coverage. A number of states either have passed the new model limit or have it under consideration now. In answer to your second question, no, the premiums do not decline.
Sean McKenna
Director of Communications
NOLHGA
Thứ Năm, 8 tháng 10, 2009
Penn Treaty May Need More Than $1 Billion for Claims
Many long-term care insurance agents have clients who they placed with Penn Treaty and others have asked to be kept aprised. I thought the following would be of interest and value.
Jesse Slome
American Association for Long-Term Care Insurance
Summarized from a Bloomberg Report: Penn Treaty Network American Insurance Co., facing the biggest insurer failure in at least five years, may need more than $1 billion in additional funds to pay claims, a state regulator said.
Penn Treaty “is far more insolvent than originally believed,” Pennsylvania Insurance Commissioner Joel Ario’s office said in an Oct. 2 request for liquidation. Penn Treaty American Corp., the Allentown, Pennsylvania-based parent of the insurer, included the document in a regulatory filing yesterday.
Sellers of long-term care coverage, including Penn Treaty, suffered after underestimating expenses, while the broader life insurance industry has reported losses on declines in stocks and bonds. Penn Treaty, with about 120,000 customers, was hurt by investment losses in the recession and “seriously under- reserved” for claims in previous years, the regulator said.
“It’s potentially a big deficit mostly that will come from guarantee funds,”a spokeswoman for Ario’s office, said in an interview. Policyholders pay Penn Treaty about $249 million in annual premium for coverage, and the regulator ruled out using rate increases to bridge the potential $1.3 billion gap between assets and future claims. That deficit will be left to state guaranty funds, which are funded by solvent insurers.
Penn Treaty is among at least eight carriers in the U.S. facing forced rehabilitation or liquidation by regulators this year, according to data collected by the National Organization of Life & Health Insurance Guaranty Associations. That compares with four in 2008.
Ario, who seized Penn Treaty in January, didn’t find an insurer to purchase or assume any of its policies. According to Nolhga, Penn Treaty has about $1 billion in assets. Cash from premiums will be sufficient to pay claims for several years, Placey of the Pennsylvania regulator said.
“There’s enough money to pay claims going forward and get the guaranty associations ready for the transition,” Placey said. Guaranty funds are used to pay claims when regulated insurers are unable to meet obligations. Penn Treaty policies will remain active for customers who continue to pay premiums. A state court will weigh Ario’s request to liquidate the company, his office said in statement last week.
Jesse Slome
American Association for Long-Term Care Insurance
Summarized from a Bloomberg Report: Penn Treaty Network American Insurance Co., facing the biggest insurer failure in at least five years, may need more than $1 billion in additional funds to pay claims, a state regulator said.
Penn Treaty “is far more insolvent than originally believed,” Pennsylvania Insurance Commissioner Joel Ario’s office said in an Oct. 2 request for liquidation. Penn Treaty American Corp., the Allentown, Pennsylvania-based parent of the insurer, included the document in a regulatory filing yesterday.
Sellers of long-term care coverage, including Penn Treaty, suffered after underestimating expenses, while the broader life insurance industry has reported losses on declines in stocks and bonds. Penn Treaty, with about 120,000 customers, was hurt by investment losses in the recession and “seriously under- reserved” for claims in previous years, the regulator said.
“It’s potentially a big deficit mostly that will come from guarantee funds,”a spokeswoman for Ario’s office, said in an interview. Policyholders pay Penn Treaty about $249 million in annual premium for coverage, and the regulator ruled out using rate increases to bridge the potential $1.3 billion gap between assets and future claims. That deficit will be left to state guaranty funds, which are funded by solvent insurers.
Penn Treaty is among at least eight carriers in the U.S. facing forced rehabilitation or liquidation by regulators this year, according to data collected by the National Organization of Life & Health Insurance Guaranty Associations. That compares with four in 2008.
Ario, who seized Penn Treaty in January, didn’t find an insurer to purchase or assume any of its policies. According to Nolhga, Penn Treaty has about $1 billion in assets. Cash from premiums will be sufficient to pay claims for several years, Placey of the Pennsylvania regulator said.
“There’s enough money to pay claims going forward and get the guaranty associations ready for the transition,” Placey said. Guaranty funds are used to pay claims when regulated insurers are unable to meet obligations. Penn Treaty policies will remain active for customers who continue to pay premiums. A state court will weigh Ario’s request to liquidate the company, his office said in statement last week.
Thứ Sáu, 2 tháng 10, 2009
Pennsylvania Insurance Department Petitions to Place Penn Treaty Into Liquidation
October 2, 2009. The Pennsylvania Insurance Department today filed petitions that seek orders of liquidation for Penn Treaty Network America Insurance Company and its subsidiary, American Network Insurance Company. The petitions are subject to the approval of Commonwealth Court.
"We have been on-site analyzing the organizations' assets, liabilities, reserves and surpluses since we began our rehabilitation action in January," Insurance Commissioner Joel Ario said. "Our comprehensive, independent evaluation has determined that the companies do not have the ability to pay future claims without significant rate increases that would have to be requested and approved in all 50 states. In the current circumstances, those rate increases simply would not be fair to policyholders.
"We have instead petitioned for an orderly liquidation of all company assets in which policyholders' claim payments are our number one priority. Additionally, active long-term care policies will not be canceled, except by the policyholder, so they will be transitioned to the states' guaranty funds once an order takes effect. Guaranty funds have the right to assess other insurance companies to cover policyholder claims up to coverage limits that vary by state."
Penn Treaty Network America, headquartered in Allentown, and its subsidiary, American Network, provide long-term care insurance to more than 120,000 policyholders.
Together, the companies offered long-term care insurance in all 50 states and the District of Columbia. Policyholders and other interested parties will receive further information about the liquidation when the court enters an order. In the interim, policyholders with questions on claims or non-claim matters may call, toll-free, 1-800-362-0700, ext. 3270.
Posted by Jesse Slome
American Association for Long-Term Care Insurance
"We have been on-site analyzing the organizations' assets, liabilities, reserves and surpluses since we began our rehabilitation action in January," Insurance Commissioner Joel Ario said. "Our comprehensive, independent evaluation has determined that the companies do not have the ability to pay future claims without significant rate increases that would have to be requested and approved in all 50 states. In the current circumstances, those rate increases simply would not be fair to policyholders.
"We have instead petitioned for an orderly liquidation of all company assets in which policyholders' claim payments are our number one priority. Additionally, active long-term care policies will not be canceled, except by the policyholder, so they will be transitioned to the states' guaranty funds once an order takes effect. Guaranty funds have the right to assess other insurance companies to cover policyholder claims up to coverage limits that vary by state."
Penn Treaty Network America, headquartered in Allentown, and its subsidiary, American Network, provide long-term care insurance to more than 120,000 policyholders.
Together, the companies offered long-term care insurance in all 50 states and the District of Columbia. Policyholders and other interested parties will receive further information about the liquidation when the court enters an order. In the interim, policyholders with questions on claims or non-claim matters may call, toll-free, 1-800-362-0700, ext. 3270.
Posted by Jesse Slome
American Association for Long-Term Care Insurance
Thứ Ba, 29 tháng 9, 2009
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 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.
Thứ Năm, 24 tháng 9, 2009
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.
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.
Thứ Tư, 16 tháng 9, 2009
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
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
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