Archive for May, 2013

48% Agreed With “Just about everyone will require ongoing living assistance…”

May 30, 2013

While only 24% thought it likely they “…will personally require ongoing living assistance some day.”  Interesting results from a national survey of 1,019 Americans age 40 and better, conducted from February 21 – March 27, 2013.*  Twice as many think almost everyone will need long term care as the number who think they will need care themselves.  I wonder who all those extra people are?  Here is the full question as asked by the survey, and the percentage responses:  “Which of the following statements best describes your view about the types of people who are likely to require ongoing assistance as they grow older?”

a. “Only people who become seriously ill or who have severe mobility problems are likely to require ongoing living assistance.  16%”.

b. “People who have moderate or serious illnesses or mobility problems are likely to require ongoing living assistance.  33%”.

c. “Just about everyone will require ongoing living assistance at some point, even if they do not become seriously ill.  48”.

d. “Don’t know.  2%”.

e. Refused to answer.  1%”. (Huh?)

Here is another question: “Thinking about your own personal situation as you get older, for each item please tell me if it causes you a great deal of concern, quite a bit of concern, a moderate amount, only a little, or none at all?”  Here are the top five as measured by the percentage of people who said the issue concerns them a great deal or quite a bit:

a. “Losing your independence and having to rely on others.  52%”.

b. “Losing your memory or other mental abilities. 51%”.

c. “Being able to pay for any care or help you might need as you grow older.  44%.

d. “Having to leave your home and move into a nursing home.  42%”.

e. “Being a burden on your family.  41%”.  I hear this expressed often as a reason for having bought long term care insurance.

Finally, “How much planning, if any, did you do/have you done for your own needs for ongoing living assistance?”

a. “A great deal/Quite a bit.  16%”.

b. ” A moderate amount.  19%”.

c. “Only a little/None at all.  65%”.

Here is what I think the survey tells us.  Assuming the 1,019 people questioned to be representative of Americans age 40 and better:  1) About half think that just about everyone will need long term care.  2) Only a quarter think that they will be among those needing care.  3) 65% of the over 40 population has done little or no planning for long term care.  I have much work yet to do.  Your conclusions?  I would love to hear your them.  Click here, if you really want to see all 30 pages of the actual survey.

 *Long Term Care: Perceptions, Experiences, and Attitudes among Americans 40 or older was a scientifically constructed survey conducted by the Associated Press – NORC Center for Public Affairs Research.

Disclaimer:  This eNewsletter reflects my interpretation of a recent survey conducted by the Associated Press-NORC Center.  You may see it differently.   As an aside, Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor or attorney for these matters.


© Raymond Smith, The Long Term Care Specialist, 2013

Women Pay More For Long Term Care Insurance?

May 30, 2013

Yes!  No!  Not all insurance companies yet!

Effective April 29, 2013, John Hancock Life Insurance Company increased NEW POLICY rates for women in thirty-six states (including Colorado) by an average of 24%, while decreasing premiums for men by about 21%.  The net, net for John Hancock is that the rates for couples applying together have increased by about 1.5%.

Genworth Life Insurance Company released a new policy series, Privileged Choice Flex 2, in thirty-one states…not including Colorado.  The new policy series has some changes, most notably to gender-based pricing.   Only single women  will pay about 40% more than men.  I will spare you the technical explanation required of why John Hancock was able to charge women more for long term care insurance, but Genworth was not…yet.  Genworth is expected to obtain Colorado approval for the new policy series, and higher rates for women, sometime between mid-summer and 2013 year-end.  When approval is granted, there will be a very short time allowed to stii get the old policy and rates.  Genworth and John Hancock respectively are number one and two as measured by number of people covered in the U.S. for long term care. 

Transamerica Life Insurance Company is reported to have gender-based rates ready to launch.  Industry talk is that all insurance companies will soon have gender-based rates.

To be clear: Women of the same age, rate class and with exactly the same policy benefits will pay more than men.  These higher rates for women will only apply to newly issued policies.  Existing policies will not be affected.  How can different pricing based upon gender be allowed?  Isn’t this discrimination?  It is discrimination, but discrimination based upon economic realities.

1.  Women tend to live longer than men.  In the United States, women outlive men by an average of about 5 years.

2. As a consequence of living longer, and of being the primary caregivers (then burning out themselves), women receive a disproportionate amount of policy benefits.  Two-thirds of all long term care claims have been paid to women, and women have received 70% of the benefit dollars paid.

While we may not like it, women do cost insurance companies more in long term care claims than men.  Different rates, just as with life insurance*, are economically justified.  If you are female, now is the time to apply for long term care insurance.  I promise you that the same benefits will cost less now than later.

*Life insurance universally costs less for women than for men…because women live longer.

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence.  Long term care insurance policies vary widely from company to company & within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor or attorney for these matters.


© Raymond Smith, The Long Term Care Specialist, 2013