Have questions about long-term care? Here’s a guide that can answer many questions about long-term care. #JointLTC

Long Term Care

Chronic Illness Benefit – Does Your Life Insurance Offer This Benefit?

Does your life insurance policy offer this benefit at no additional cost:

How the Rider Works

A portion of your policy death benefit may be paid to help you and your family cope with the strain of a chronic illness if a U.S. licensed healthcare practitioner who is not the insured, policyholder, beneficiary or relative thereof, has certified in the last 12 months that the insured:

  • is unable to perform two of the six recognized activities of daily living (bathing, continence, dressing, eating, toileting, and transferring)without substantial assistance for a period of at least 90 consecutive days, or;
  • has a severe cognitive impairment that requires substantial supervision by another person to protect the insured from threats to health and safety for a period of at least 90 consecutive days

To receive benefits under the rider, the healthcare practitioner must also certify that continuous care in an eligible facility or at home is expected to be required for the remainder of the insured’s life.

Want to do a Life Insurance Review give our office a call at 215-886-2122.

 

Longevity Risk: Have you planned for living too long?

You have heard of Market Risk, Inflation Risk, Interest Rate Risk and a few others but have you made plans for just living way too long?

The question of how much money is needed in retirement leads to another question which is perhaps the most difficult and the most central issue you as the advisor face when helping your clients prepare for retirement: How long should you expect clients to live? What is their longevity risk? Getting this variable exactly right is virtually impossible. Getting it wrong can have a profound impact on a client’s quality of life, lifestyle, and legacy.

Will you live to age 85? 90? 95? 105?

Longevity Risk Defined

So what is longevity risk? Longevity risk is the risk that people on average will live longer than expected. Due to improvements in medical technology, nutrition, disease control, public health, and environment, human life spans have improved very rapidly and very significantly. The National Center of Heath Statistics reports that between 1975 and 2016, life expectancy at birth increased from 72.6 to 78.8 years for the total U.S. population. For males, life expectancy increased from 68.8 years in 1975 to 76.3 years in 2016, and for females, life expectancy increased from 76.6 years in 1975 to 81.2 years in 2016. You can view the report at: https://www.cdc.gov/nchs/data/hus/hus16.pdf#015.

The problem is that many individuals underestimate their “average” life expectancy. In fact, according to a study conducted by the Society of Actuaries (SOA), titled Risks and Process of Retirement Survey, they reported that almost half of retirees and pre-retirees in the U.S. under estimate average life expectancy. The study asked respondents about their views respecting longevity risk. Here are some of the results:

  • Approximately four in 10 respondents (43% of retirees and 38% of pre-retirees) underestimate average life expectancy by five years or more, the report Another two in 10 underestimate it by two to four years;
  • Four in 10 retirees (42%) and pre-retirees (41%) correctly respond that about half of 65-year-old men and women can expect to live until median life expectancy (age 83 for men and age 86 for women). Two in 10 (21% of retirees and 20% of pre-retirees), believe that fewer than half will live at least until that age, while approximately one-third (31%), and 36%, respectively believe about 75% or more will live until then;
  • Typical retirees and pre-retirees see themselves living until age 84 (median for retirees) or 85 (median for pre-retirees). The report notes, however, that one- quarter of retirees (24%) and almost three in 10 pre-retirees (28%, up from 15% in 2005) think they will live until age 90 or later; and
  • At the other extreme, one in 10 retirees (9%) and pre-retirees (10%, down from 16% in 2005) do not think they will reach age 75.

Of course, averages alone don’t tell the entire story since once we reach our retirement years, the chances of surviving for another 20 to 30 years are substantial. In fact, as we survive each stage of life and the associated risks, the odds of us surviving to higher ages increase.

Figure 3.1 shows the life expectancies of 65-year-old Americans. According to the Social Security Administration mortality tables, a 65 year-old man has a 22% probability he will live to age 90, while a 65 year-old female will have a 34% probability she will live to age 90.

Figure 3.1

Probability of Today’s 65-Year-Old Living to Various Ages

65 Year-Old Male 65-Year-Old Female 65 Year-Old Survivor
Age Probability Age Probability Age Probability
80 61% 80 71% 80 88%
85 41% 85 54% 85 73%
90 22% 90 34% 90 49%
95 8% 95 6% 95 23%

Source: Social Security 2010 Mortality Tables with 1% mortality improvement. https://www.ssa.gov/planners/lifeexpectancy.html

Why not give our office a call and let us explain how to get ready for Longevity Risk.  Call 215-886-2122 and we can show you how to plan for life.

Long Term Care Insurance

Waiting to get older to buy your long term care insurance? 78% of people between the ages of 50-59 are approved for coverage when they apply, but that number drops to 56% at age 70. If your health changes while you’re “waiting to get older,” you might be out of luck. What’s your plan for long term care?  I could share all kinds of figures about cost and percentages that one will need care, I am sure you have heard it before, I would rather share the following.

Here is a story we have often shared about the subject:

“Barrel of Bricks”

Long-term care is one of those unexpected expenses everyone should plan for but few people actually do.

Consider this humorous accident report from someone who should have considered long-term care sooner.

I am writing in response to your request for additional information on my accident report.  In block number three of the accident reporting form I wrote, “Trying to do the job alone,” as the cause of my accident.  You said in your letter that I should explain more fully and I trust the following details will be sufficient.

I am a bricklayer by trade.  On the day of the accident I was working alone on the roof of a new six-story building.  When I completed my work I discovered that I had about 500 pounds of brick left over.  Rather than carry the bricks down by hand, I decided to lower them in a barrel by using a pulley, which fortunately was attached to the side of the building at the sixth floor.

Securing the rope at ground level, I went up to the roof, swung the barrel out, and loaded the bricks into it.  Then I went back to the ground level and untied the rope, holding tightly to it to ensure a slow decent of the 500 pounds of brick.  You will note in block eleven of the accident report that I weigh 135 pounds.

Due to my surprise at being jerked off the ground so suddenly, I lost my presence of mind and forgot to let go of the rope.  Needless to say, I proceeded at a rather rapid rate up the side of the building.

In the vicinity of the third floor I met the barrel coming down.  This explains the fractured skull and broken collarbone.

Slowing down slightly, I continued my rapid ascent, not stopping until the fingers of my right hand were two knuckles deep into the pulley.  Fortunately, by this time I had regained my presence of mind and was able to hold tightly to the rope in spite of my pain.

At approximately the same time, however, the barrel of bricks hit the ground and the bottom fell out of the barrel.  Devoid of the weight of the bricks, the barrel now weighed approximately 50 pounds.  I refer you again to my weight in block eleven.  As you might imagine, I began a rapid decent down the side of the building.  In the vicinity of the third floor I met the barrel coming up.  This accounts for the two fractured ankles and the lacerations of my legs and lower body.

The encounter with the barrel slowed me enough to lessen my injuries when I fell onto a pile of bricks and, fortunately, only three vertebrae were cracked.

I am sorry to report, however, that as I lay there on the bricks in pain, unable to stand, and watching the empty barrel six stories above me I again lost my presence of mind.  I let go of the rope.

Moral of this tale:  It doesn’t pay to try to do the job alone.

Maybe you should take a serious look at long-term care now to prepare for the time when you or your loved ones might need it.  I can help you evaluate your options and needs to avoid your “barrel of bricks.”

Give my office a call at 215-886-2122 and let’s have a conversation.

 

What Is Advance Care Planning?

(from the NIH website)

Advance care planning involves learning about the types of decisions that might need to be made, considering those decisions ahead of time, and then letting others know—both your family and your healthcare providers—about your preferences. These preferences are often put into an advance directive, a legal document that goes into effect only if you are incapacitated and unable to speak for yourself. This could be the result of disease or severe injury—no matter how old you are. It helps others know what type of medical care you want.

An advance directive also allows you to express your values and desires related to end-of-life care. You might think of it as a living document—one that you can adjust as your situation changes because of new information or a change in your health.

Long Term Care Premiums Going Up Again in PA.

Here is an article that I noticed about LTC(Long Term Care Insurance) premiums going up again in Pennsylvania.  If you are tired of premiums consistently rising, give our office a call.  We may be able to help.  While replacing an existing policy may or may not be advisable, we can look at a couple of options that are available.

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