Archive for February, 2014

Finding the Right Assisted Living Facility (for yourself or a loved one)

February 24, 2014

Assisted living facilities (licensed as assisted living residences in Colorado) can be the best long term care setting for a given person.  They have become popular because of opportunities for socialization while providing the day-to-day assistance many people need.  Before considering assisted living, let’s look at the basic qualifications for admission: 1. Residents must generally be ambulatory.  2. Cannot require the level of care provided by nursing homes (skilled nursing facilities).  3. Must be affordable.

Here are some things to look for when evaluating a particular assisted living facility:

Licensing: Is the facility licensed as may be required?

Location: Studies have consistently shown that more than any other factor, quality of care is directly related to the frequency of resident visits by family and friends.  May family and friends visit without notifying the facility beforehand?  Something about “the squeaky wheel getting all the attention”.  It is difficult for potential visitors to “squeak” if they live far away.  Please do visit your resident often.

Your resident’s particular room: Can be private or semi-private.  Does the room feel nice?  Good natural light?  Clean and odor free?  Freedom to re-arrange furniture and decorate as wished?  Is it comfortable?

Food: All assisted living facilities provide meals.  If you are acting on behalf of a potential resident, eat several meals in the facility (you will be invited to do so).  Was the food tasty?  Were the portions adequate?  Were there enough choices to accommodate your resident’s tastes and (perhaps special) needs?  Was the dining area staff friendly and helpful to everyone…not just to you?

Inspection reports: What have been the results of facility inspections during the past 24 months or so?  Are noted discrepancies serious (All facilities will have discrepancies.  Some are more significant than others.).  Have discrepancies been corrected from one inspection to the next, or do they get repeated?

Activities: Look at the facility calendar of events.  Is there enough variety to keep your potential resident interested in participating?  Observe a few events.  Did they happen when scheduled?  Allowing for individual abilities, did the residents seem engaged?

Overall facility staff: Did staff address residents by name, exchanging pleasantries as they passed each other?  Does staff seem friendly and genuinely caring?

Other residents: Talk to some.  They and you will be glad you did.  Ask how they like the facility (But discount unhappiness about loss of functionality.).  Ask residents about the staff.

Religious services: If important to your resident, are appropriate religious activities available on a regular basis?

Cost: Assisted living facilities quote a basic room and board cost, with a typically limited set of assistance services.  Ask for a price list of extras that your resident may need.  Examples of extras would be setting up and administering medications, a personal escort to meals, assistance with bathing more than a few times per week, transportation to doctor appointments, etc.

Finding the right assisted living facility (assuming assisted living to be appropriate) is crucial to your resident’s well-being.  Yet it is difficult to find the “right” place, especially when the decision is loaded with emotion and feelings of guilt.  The above list is merely intended to help you get started.  For someone facing such a placement decision, I strongly recommend Joan Therise Seivert, of Connections Unlimited (303-238-0627).  Joan Therise has been doing long term care placements in the Denver area since 1989, knows the facilities inside-out, has a sixth sense for matching residents to facilities, and is totally honest.

Disclaimer:  This eNewsletter and all links to other sources should not be construed as tax or legal advice because they are not either.   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

A Different Kind of Long Term Care Insurance?

February 24, 2014

“What if I could show you a long term care insurance policy that guarantees you (or your beneficiaries) will get all of your money back, at the very least, even if you never need long term care services?”  That is how I was introduced to the concept of hybrid life-long term care insurance.  Additional benefits include a guarantee of no future rate increases, and no subsequent premiums after the first (and only) one.

The downside: 1. Because there is only one premium, it requires somewhere around $100,000 in liquid assets to get a meaningful long term care benefit.  2. The worst case, guaranteed, scenario is that you (or your beneficiaries) get all of your money back, but without any investment gain or loss.  3.  Less policy benefits design flexibility compared to traditional (on-going premiums) long term care insurance.  4. Hybrid policies do not qualify for long term care partnership status (not likely to be a concern for anyone who can afford to move $100,000+).

There are currently three primary insurance companies offering this type of policy.  I generally lean toward one of the three because of the completeness of guarantees and robustness of the long term care benefits.  Each client’s situation is different thus must be evaluated individually.  In my insurance practice, I submit applications for several of these hybrids each year…with the number growing.

Here are some examples using actual values from one of the leading insurance companies.  All assume a married non-smoker, a $5,000 initial maximum monthly benefit amount, 3% simple inflation protection, and a four-year benefit period:

Age 50, Male: $75,395 single premium.  $250,800 initial long term care benefit pool.  $466,800 long term care benefit pool at age 80.  $120,000 death benefit (if long term care benefit are not used).

Age 50, Female: $75,313 single premium.  $250,800 initial long term care benefit pool.  $466,800 long term care benefit pool at age 80.  $120,000 death benefit (if long term care benefit are not used).

Age 60, Male: $101,053 single premium.  $250,800 initial long term care benefit pool.  $394,800 long term care benefit pool at age 80.  $120,000 death benefit (if long term care benefit are not used).

Age 60, Female: $96,532 single premium.  $250,800 initial long term care benefit pool.  $394,800 long term care benefit pool at age 80.  $120,000 death benefit (if long term care benefit are not used).

Age 70, Male: $128,074 single premium.  $250,800 initial long term care benefit pool.  $322,800 long term care benefit pool at age 80.  $128,074 death benefit (if long term care benefit are not used).

Age 70, Female: $134,782 single premium.  $250,800 initial long term care benefit pool.  $322,800 long term care benefit pool at age 80.  $134,782 death benefit (if long term care benefit are not used).

As you can see, the required single premium amount becomes larger as you wait to apply.  What about gender?  Why do you think the single premium for women is sometimes less and sometimes more than for men.  I would love to hear your thoughts.  Clue: Women tend to live longer than men, but receive long term care benefits more frequently and beginning at an earlier age.

Hybrid life-long term care insurance policies are only possible for the segment of the general population that can move $100,000+ from their asset portfolio to a policy.  But for those who can, hybrid policies work really well.  It is important to note that the life insurance death benefit is a nominal one, intended to guarantee the full return of premium.  A $120,000 death benefit in exchange for a $101,053 single premium (male, age 60) is not a reason for buying a life insurance policy.  But the same single premium in exchange for an initial $250,800 long term care benefit, growing to  $394,800 at age 80 is a good reason to buy.

Policy design specifications other than assumed in the above examples are available.  Different inflation protection options, monthly benefits, and benefit periods are all available.  Of course when you change any of these design options, the required single premium also changes.

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, 2014