“Never let the truth get in the way of a good story.” I’m sure Mark Twain wasn’t thinking about Long-Term Care or today’s media when he said this a long time ago. Nowadays it is very easy to post a story for people to consume. Between traditional television and radio, an expanded 24/7 news cycle with cable news, a lot of information is available. The biggest difference today, as in the old days, when anyone with a printing press could print whatever they wanted, now you only need a computer to create a news story. It seems that almost everyone has a computer or a smartphone and is not afraid to use it.
The issue of long-term care has become a major issue in the aging United States. By 2030, 1 in 4 Americans will be over 50 years old. By 2050, 1 in 5 Americans will be 65 or older, according to data from the Centers for Disease Control and Prevention. It seems that once you are in your 50s, the conversation about long-term care begins to emerge. In today’s world, that means you go online and see what information you can find. However, some articles provide misleading or even completely wrong information about long-term care insurance.
We have heard the term fake news, but perhaps the best way to define what is being written about long-term care is simply “lazy news” or “promotional news.” It seems like everyone with a computer Including me, has an agenda. How much of this is “true” is a matter for discussion.
Generally, there is more to a story … and what is left out is usually very important. Stories about long-term care insurance premium rate increases are very misleading. They tend to leave out many details. The reporters or “professionals” who write these articles often have an agenda to push the public in one direction or another.
The other thing to remember is that the Internet is also “old news”, as nothing is usually deleted on the Internet. You can find and read something that is old, but that story may have been updated multiple times since the first one was published, making the information you’re reading out of date. You need to do more due diligence today to see if you are getting accurate information.
Since the topic of planning for the financial costs and burdens of aging is so important to American families, you need to know the facts. Often times the reason articles talk about premium increases is to scare the consumer. Perhaps the writer wants the government to pay for all long-term care (not going to happen as too many people require care and budgets are tight as he is trying to care for those with little or no savings). Perhaps the writer wants the consumer to spend large sums of money on a certain type of financial product that he is selling. The consumer must understand the truth, so that they can plan ahead with more peace of mind.
These reported increases refer primarily to “legacy products.” These are older plans that were priced long before the fall in interest rates and rate stabilization regulations.
Today, all plans are priced with the very low interest rate environment in mind (interest rates have been low in the United States for the past decade). These older plans that had increases were based on a few factors:
Interest rates
Lapse rates (ie, how many people drop their policies. In practice, very few do, but this was not accounted for in the premium prices of many older plans).
Claims and underwriting experience
These policies are also paying huge benefits. In 2017, more than $ 9.2 billion in benefits were paid to American families that protect assets and ease the family burden.
The fact is, these older policies were priced below the initial price and even with the increases, they still have exceptional value and huge benefits. Nobody likes a raise, but you need to put that raise in perspective. Many of these people I speak to have huge benefits that have increased a compounded 5% each year since they had the policy. Many also have unlimited lifetime benefits. Since they have these huge benefits, many can reduce the benefit or the inflation factor to keep the premium the same. As their benefits grow much higher compared to the cost of long-term care, they remain in a prominent position.
Today’s long-term care insurance policies remain very affordable as people start shopping for plans before retirement. Subscription is more conservative, but since consumers are younger, most people can still find a suitable plan.
Experts say the risks of increases are small but, like everything, there is always the possibility of an approved increase. However, if you read some of the articles that are published, you would think that the industry is dead and consumers have no interest in the product anymore.
The fact is, there are still numerous insurance companies that market long-term care insurance. Consumer interest has never been greater. As I speak with other long-term care insurance specialists like myself, we’ve all noticed a huge increase in both consumer awareness and interest. Consumers are younger, more informed about the risks (often with first-hand experience with an older parent or other family member), and we are bombarded with requests for information and appointments.
Consumers seek help from long-term care specialists, as most financial advisers and general insurance agents have limited knowledge and experience with products, underwriting, policy design, benefit options, and the insurance program. federal / state association that is available in most states. Therefore, some of these professionals push consumers towards options that they feel most comfortable with even though they may not be the best and most affordable way to address the costs and burdens of aging.
Long-term care insurance, despite what you read, is very affordable for most people. With regulation and better pricing, consumers enjoy the added peace of mind of knowing that they have a plan that they can count on for decades to come and that will remain affordable once they retire and age.
Many people can get exceptional coverage for less than $ 150 a month, some even for less than $ 100. Premiums are based on your age at the time you sign up for a plan, your health, and the amount of benefits you want to have. Most of the people I speak to across the country are between the ages of 45 and 60.
A true long-term care specialist will ask you numerous questions about your health, family history, and retirement plans in order to make the appropriate recommendation. Anyone who is willing to give you “dates” without asking too many questions should be avoided.
Long-term care insurance is custom designed. Also, each insurance company has its own underwriting criteria. A true long-term care specialist will represent most or all of the major companies. They will have a deep understanding of underwriting and policy design. They should have processed a lot of claims, so they know first-hand how these policies are used at the time of the claim.
Lastly, a true long-term care specialist will not guide you to a certain type of policy without spending time talking with you to determine which type of plan is right for your specific situation. Working with a long-term care specialist will allow you to get the accurate information you are looking for. There are several reference websites for research:
LTC News offers articles and resources: http://www.ltcnews.com
US Department of Health and Human Services: https://longtermcare.acl.gov/
The main concern for most people is that they understand that caring is difficult. An older spouse cannot be expected to be a caregiver without affecting their own health. Adult children and their own families, careers, and responsibilities. Paid care is expensive and depletes savings and affects lifestyle.
For many, long-term care insurance is easy, affordable, with stable income and asset protection. It reduces the burdens that your aging will place on your family. However, talk to a real specialist. There are not many long-term care specialists with extensive experience, but I help people across the country and many others like me as well.
This will give you and your family tremendous peace of mind and it is not fake news.