Long Term Care Letter from Brigitte Bromberg

Back to School: Long Term Care Literacy  

 

Parsippany, NJ

September 20, 2012

 

When it comes to the topic of long term care (LTC) planning and long term care insurance, most people are relatively unversed.  That is, until the day they are faced with a need for long term care for themselves or a loved one, and they end up going through what amounts to a crash course. Unfortunately, for many people it is only then -- once they've earned their "street smart Ph.D" in LTC -- that they see the cost of long term care illiteracy. 

 

One of the reasons I write these articles each month is to demystify long term care planning.  Because I work with LTC insurance (LCTI) day in and day out, I sometimes need to be reminded that not everyone knows what a typical LTCI policy is designed to do, what it costs, and which companies are currently issuing coverage.  So this time, I'm going to pass on to you some of those basics, as well as a few other helpful facts and figures.

 

Please be aware that I am somewhat reluctant to quote average figures, since my work consists of crafting the best LTCI recommendation and policy based on an individual's family situation, health, and budget.  That said, facts and figures can help you understand the core issues and identify those who are the most logical candidates for LTC planning and insurance policies.

 

Each year, Broker World, a financial services industry magazine, publishes its "Long Term Care Insurance Survey."   The information below is from this year's survey, which reports on individual policies sold in 2011;  it appeared in the July 2012 issue.

 

Top 5 Carriers -  New Premium

  1. 1.    Genworth ($207 mill)
  2. 2.    Northwestern ($68 mill)
  3. 3.    John Hancock ($52 mill)
  4. 4.    Mutual of Omaha/United of Omaha ($45 mill)
  5. 5.    Prudential ($39 mill)  [note: Prudential recently stopped writing new LTCI policies]

 

Benefit Period

2 years or less            11%

3 years                      27%

4 years                      17%

5 years                      14%

6 years+ (not lifetime) 18%

Lifetime                     13%

 

Policyholder Issue Age

Up to 44:  7%

45-49:      6%

50-54:    15%

55-59:    25%

60-64:    27%

65-69:    14%   

70+:        6%

 

The average new policy premium (excluding single premium sales) was $2,322.  The average premium reported by "purchasing unit" (one person or a couple) was $3,416.  It's likely that spousal discounts and shared benefit policies -- which allow couples to share policy benefits - account for the lower "purchasing unit" per policy cost for couples.

 

Just by reading this article, you have become much better informed about the ABCs of long term care insurance than the average person.   Long term care insurance specialists are, of course, even more knowledgeable.  Please call upon me if I can be of service.

 

  

 

 

 

Brigitte Bromberg, MS, CFP(R), CSA(R) is a long term care insurance specialist and president of Winning Strategies Group LLC, an independent insurance and risk management firm located in Parsippany, NJ. She is one of the first agents nationwide to become involved in the Association of Jewish Family and Children's Agencies affinity long term care insurance program.

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