Greeting, friends and clients! 

If you have friends who are still have not done responsible long-term care planning, don't give up on them! Keep encouraging them to get the facts. Contrary to popular misconception, long-term care insurance (LTCi) premiums can be very reasonable, if plans are properly designed. In my opinion, what may not be reasonable is needing care for anything but a short amount of time, and not owning LTCi.

Recommend that your friends start researching LTCi by visiting My Resources page provides excellent links to reputable sources of information. Check out the excellent "I'll just self-insure for LTC" presentation there. Read my Blog for additional links to accurate LTC information.


Personal LTCi Current Events 

I participated in a panel discussion at the  12th Annual Intercompany LTCi Conference in March. The name of our session was "Yellow Pad or iPad". I shared how I've used technology in my practice to improve efficiency and outcome. It was great fun!


Shortly after I returned, I was honored to be interviewed by Terry Savage of the Chicago Sun-Times, and quoted in her March 28, 2012 column.


On April 12, 2012, I gave a luncheon talk to the Coastal Bend Association of Health Underwriters (CBAHU), in Corpus Christi. I love giving talks and I particularly love being invited to Corpus Christi. Jim and our dog, Cocoa, were able to join me there. We arrived a day early were able to enjoy the beach and take in the ideal weather before my talk.


That same week, I was interviewed by Dave Lieber, the award winning Ft. Worth Star-Telegram investigative reporter, and quoted in his April 12, 2012 article on recent long-term care insurance rate hikes.


National LTCi Current Events  

Dave Lieber's April 12, 2012 column reports about long-term care rate hikes that made the headlines lately. As I told Mr. Lieber, the very worst thing about these rate hikes, in my opinion, is that 9 out of 10 times the policyholder has lost their agent. There is no one for the LTCi policyholder to turn to for educated advice and options.

I normally place policies correctly at the outset. They have built-in, automatic inflation protection, and need very little service, upgrade or enhancement. Therefore, when my clients get notice of a rate hike, it's often been awhile since we reviewed their policy. They may have forgotten that rate hikes are permitted, although they are not frequent, arbitrary or easily obtained.

When I answer the phone, my client is often angry, scared or upset that their LTCi premium will go up.

LTC insurance policies have extraordinarily high persistency, which means that about 95% of all LTCi, industry-wide, remains on the books after it is sold. Unfortunately, this is higher than actuaries anticipated. LTCi policies also have incredibly long tails, meaning that an LTCi policy sold to a 55-year old might stay on the books 30 or more years before it is collected from. Because of both of these unique qualities, when an LTCi policy is issued, the carrier must post very large amounts of reserve funds. The majority of LTCi's profitability is derived from interest earned on posted reserve funds. When interest rates plummeted unexpectedly in recent years and stayed down for so long, and when policies experienced higher than predicted persistency rates, prior actuarial assumptions became incorrect.  Rate hikes are a means to adjust for these inaccurate assumptions.

It's a good thing LTCi carriers do this. They act in a responsible way. I would rather have LTCi carriers give rate hikes in order to be able to honor their obligations to policyholders, than behave like the federal government and make financial commitments that it cannot meet in the future.

If rate hikes are not tolerable, I can show clients how to pare back their LTCi, get their premiums back down, and still have high-performing coverage.

I lament that so many LTCi policyholders have no one they can trust and turn to for advice when their rate hike letter arrives. This can cause bad headlines and publicity for LTCi. This in turn gives people and families additional excuses to put off having conversations about responsible, and reasonable, long-term care planning. I have seen a great many LTCi policies pay out lavishly and with ease, giving my clients options they never would have had.


If you have questions about your LTCi, or you think you might need to collect from it, please call me right away at 713-988-4671. I am here to serve you.    


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