Long Term Care and Disability Insurance

The Aging of the Baby Boomer Generation has an…

Presented by Leonard Berthelsen It was only a matter of time before the effect of the aging of Baby Boomers hit the Federal & State budgets. With less than 10% of this class of folks owning long-term care insurance, it has become necessary for the Federal Medicare and Medicaid system to review their budgets but also review what they are approving for payment. The big challenge that the federal government faced when trying to find ways to rein in some of these costs was that they were being looked at as being a heartless bureaucratic entity. By putting some of the burden back on the consumer for payment of services, they are scrutinizing those services and in many cases simply saying no to services altogether. That hasn’t set well with this generation of folks. The government was accused of developing “death panels”, as they were called, to try to rein in some of these expenses by considering the likelihood of patients’ recovery and ongoing quality of life. Medicare & Medicaid are jointly spending trillions of dollars every year and there is no light at the end of this tunnel. As a class of people, we are living longer, yet dying slower with health issues that are expensive to treat. It would be great if our government would pay whatever was needed to provide medical services for anything and everything that could medically go wrong. However, we know that is not practical or sustainable. Yet we still want the best care, by the best trained medical staff and at the lowest cost. Somewhere, something had to give. The Medicare and Medicaid system are in fact taking a hard look at rehab invoices and home health care bills. If the facility or provider is not following the letter of the rule, then Medicare and Medicaid will choose not to pay for the services. It then becomes the responsibility of the patient to pay out of pocket for this care. This could be several hundred dollars to several thousand. Medicare is allowing hospitals to admit recipients for non-emergency admissions under the term “observation” instead of full admission, thus putting more of a financial burden on the patient. What can you do to help your clients? Certainly, long-term care insurance will help tremendously with the outpatient side of the medical expenses. Also such plans as Recovery Care, Hospital Confinement & Home Care coverage will fill in the voids that we are seeing being created by both Medicare and Medicaid as they struggle to make their budgets work. Having the patient be more in-tune with what is actually being charged for those services certainly makes the government feel like they are being better stewards of our tax dollars than what we have seen from them in the past.
Long Term Care and Disability Insurance

How to Choose a Long Term Care Carrier

Presented by Michelle Daharsh When it comes to selecting an LTCi carrier today, you certainly have lots of choices. Most carriers offer a basic foundation of benefits that look fairly similar from company to company, so how do you make a choice and recommendation to your prospect? Here are three characteristics to consider when making that choice: 1. Contemporary, Innovative Products Look at carriers that offer competitive features that set them apart from the competition. Features like cash benefits, streamlined underwriting, calendar day elimination period, and waiver of elimination period for home care claims are just a few of the many and important options available. 2. Competitive Pricing Do your research and find the products that are competitively priced. Age, health and whether the prospect has a spouse or partner all become critical information in your selection for a recommendation to your prospect. Providing your prospect with the best products for the best value is critically important. Each carrier has their own “sweet spot”. Some examples of “sweet spots” can be competitive pricing at certain ages, partner allowances, multiple inflation options, and underwriting risk. 3. Financial Strength and Stability In the past it wasn’t much of a factor what the ratings of a carrier were. We have fewer carriers now in the market and the rate instability has shown that carrier strength is very important. Working and placing your prospects’ business with a financially strong carrier becomes even more important. Carriers with a history of remaining competitive, stable and secure even in tough economic times will most likely prove that they are able to meet the needs of your prospect in the future. Also, look for carriers that maintain high ratings from industry rating organizations. So whether it is the competitive pricing of a product or the financial strength of a carrier, Financial Brokerage is equipped to provide you with the resources and knowledge you need in making the best decision with your prospect and their long term care insurance coverage.
Long Term Care and Disability Insurance

Not responsible for your parent’s debts? Filial responsibility laws…

Presented by Leonard Berthelsen Many times we have a notion that we know how something should turn out, only to find out that the complete opposite is true. Filial responsibility laws are in place in 30 states in our country today. What is the Filial responsibility law? It basically makes an adult child responsible for the care debts of an ailing parent who cannot afford to pay for their care. We all thought that was what Medicaid was for, right? It is no longer enough for a person to have limited assets in order to qualify for Medicaid but apparently their adult children as well. Take a look at a Pennsylvania case that involved an ailing parent whose son was sued by the nursing home even before Medicaid had made a decision on the applicant’s eligibility. The courts ruled that by the mere fact of having a Filial responsibility law in place, the nursing home didn’t need to wait for a decision from Medicaid and could choose any or all of the adult children to be the responsible party for their parent’s bill. This potential liability should move more of our clients to reconsider long-term care insurance. We have talked as an industry for years that it makes good sense for adult children to have that conversation with their parents about their wishes and finances concerning long-term care issues. I think the urgency is a little stronger now in light of what we are starting to see happen. Long-term care insurance is still the best protection for a parent wanting to maintain choices and flexibility. It now has become even more important for the adult children to have that conversation with their parents and even consider paying the premiums for their parent’s policy. It could save them a tremendous amount of money in the long run.
Life Insurance

The Eight Elements of Extended Care Riders – Element…

Presented by Brian Leising Finding the right formula for each client Not all extended care riders on life insurance policies are created equally. Do you know the differences? Different combinations will appeal to different clients more than others. Here are eight of the major distinguishing features among insurance companies offering extended care riders. All include some combination of the eight elements. This allows you to find the right formula for each client.
Premium Payments Benefit Qualification Benefit Amount
Pf Payment Frequency Pa Payment Amount
Lg Lapse Guarantee Tc Tax Code Pm Payment Method
Wp Waiver of Premium Ep Elimination Period If Inflation
Element 6 – Payment amount Insurance companies use two primary methods to determine the benefit amount paid to your client. The payment amount will be either based upon a known figure up front, or will be determined at claim. If there is no cost for the extended care rider up front, charges are assessed at the time of claim. In this scenario, the company will set a maximum acceleration amount available to the client. The client may elect to request that entire amount or a lesser amount. The carrier will then base their charges on the client’s life expectancy and current interest rates. For instance, they may determine the client has a life expectancy of five years. They will take the dollar amount requested, calculate the interest they would expect to earn on that money over the next five years, and then subtract that amount from the client’s benefit as their fee. With this type of payout calculation, it is impossible for a client to know exactly how much money they will receive until they actually file a claim. This works well for clients who absolutely will not pay for a feature they believe they will never use as there is no upfront cost for this type of rider. If there is a charge up front for the rider, the benefit will be a known number. Most carriers express the monthly benefit as a percentage of the face amount. 2% is common, but some offer 3%, 4% or the full Federal per diem amount as the monthly benefit. At least one company allows the client to name a specific dollar figure on the application. This method gives the client the ability to know exactly what to expect upon filing claim. Look for Element 7 – Payment Method in July.
Long Term Care and Disability Insurance

Are Commission Eliminations a Trend for Us to be…

Presented by Leonard Berthelsen There has been a lot of talk and many articles in our trade publications about carriers suspending commission payments for open enrollment in the Affordable Care Act (Obamacare). Is this a trend that the industry needs to pay attention to, or is it affecting just this specific kind of insurance? Interesting to ponder, are you going to lose any sleep over it? I suspect that if you are one of those agents that work in this market, you are concerned about the future. Are they going to expand that to all under 65 major health products, or is it contained in a small amount of the overall business? There are pros and cons with the Affordable Care Act and many differing opinions on it’s success. There is no doubt that many more Americans are insured today than at any other time in our country’s history. Medicaid expansion has added thousands if not millions of additional covered Americans in addition to the newly insured under the ACA. Regardless of which side of the aisle you sit on, these facts can’t be disputed. What does get disputed is what effect it has on the other forms of insurance available to consumers. Most of the carriers participating in the ACA have given dismal reports for the last 2 years on premium collection, insured retention, and overall claims experience. It is not a disputed fact that the majority of carriers are paying more out in claims than what they are collecting in premiums from the open enrollment section of the ACA. How long will that trend continue? Time will certainly tell. These same carriers that are reporting significant losses in the ACA open enrollment are looking for all means to “right the ship”, unfortunately, commissions got caught up in that correction. It appears that this commission suspension is an anomaly at this point and not a concern for panic with regard to the other health related products out there. Should we ignore what is happening to commissions in this group, certainly not. As a prudent business person, we all have to stay sharp to market trends, carrier actions and regulatory concerns. At this point, the carriers need the individual producer as much as the producer needs them. Very few of these carriers have a direct to consumer mentality or a mechanism to take their overall business straight to the consumer. So for the short term, insurance advisors are still needed by the carriers, the consumers and the families they support. If you have sold in this environment and it affected you financially, let the carrier and the regulators know this. The only way that they are going to know what effect this is having on your livelihood is if you speak up. Marketing Long Term Care, Disability Income Protection, Short term care and other individual products may be the solution to the shrinking compensation that the carriers imposed on the ACA. Let’s remain strong in the other individual product lines and demonstrate that our profession is truly needed. Reach out to Financial Brokerage at 800-397-9999 for additional information on this subject.