Wednesday, December 1, 2010

New Report Examines What Consumers Really Pay For Long-Term Care Insurance

One fourth (27.8%) of individuals purchasing long-term care insurance during the first half of 2010 who were under age 61 pay less than $1,000 a year according to a new report issued by the American Association for Long-Term Care Insurance (AALTCI).

"The single greatest misconception held by consumers is the actual cost of coverage," explains Jesse Slome, AALTCI's executive director. "Most people perceive the cost is actually quite a bit higher than the real amounts paid by large percentages of those purchasing coverage."

The Association reveals that nearly one-in-five (19.4%) purchasers under age 61 pay between $20 and $30 a week for new policies. Over one-fourth of buyers (28.9%) in this age band pay between $1,500 and $2,500 a year with the remainder paying more. Less than one-tenth of these buyers (6.8%) pay $4,000 or over.

"Studies that report average premium costs regrettably mislead the public into the perception that long-term care insurance is expensive," Slome explains. "Averages include large numbers of older buyers and other factors that result in higher costs. The fact is that many people pay far less than the average amounts released by industry sources."

Costs for long-term care insurance can vary significantly based on the age when one applies, the ability to take advantage of discounts offered to healthier applicants as well as the amount of future benefits desired.

Insurance rates are based on the attained age of the applicant. Older buyers pay more and according to the latest data of real buyers, less than a tenth (9.0%) of buyers between ages 61 and 75 paid $1,000 or less when they applied for new coverage.

According to the Association, the average age for new individual purchasers is now 57. Eight out of 10 (80.5%) of new individual buyers in 2009 were younger than age 65 when applying for long-term care insurance according to AALTCI's annual research of 155,000 new applicants. The pricing data is based on an analysis of over 200,000 purchasers of partnership qualified LTCi policies.

What Real People Pay Yearly

Buyers Under Age 61

Less than $999 27.8%
$1,000 - $1,500 19.4%
$1,500 - $2,500 28.9%
$2,500 - $4,000 17.1%
$4,000 and over 6.8%

Buyers Age 61 - 75

Less than $999 9.0%
$1,000 - $1,500 12.5%
$1,500 - $2,500 34.5%
$2,500 - $4,000 28.4%
$4,000 and over 15.6%

Source: American Association for Long-Term Care Insurance, November 2010, Price Study

Tuesday, November 2, 2010

2011 Long Term care Insurance Tax Deduction Limits Announced

November 2, 2010. The Internal Revenue Service (IRS) announced increased deductibility levels for long-term care insurance policies purchased in 2011.

"For taxable years beginning in 2011, the limitations have been increased," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), the industry's trade association.

“Tax advantaged long-term care insurance remains one of the few remaining significant tax-savings benefits especially meaningful for small business owners."

The deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:

Attained Age Before Close of Taxable Year

2011 Deductible Limits
40 or less $ 340
More than 40 but not more than 50 $ 640
More than 50 but not more than 60 $1,270
More than 60 but not more than 70 $3,390

Source: IRS Revenue Procedure 2010-40

The American Association for Long-Term Care Insurance ( is the national association serving insurance and financial professionals who provide long-term care financing solutions. A complete explanation of tax deductible rules for individuals and business owners can be found on the Association's website: .

Tuesday, October 26, 2010

LTC Association Marks Long-Term Care Awareness Month

November is Long-Term Care Awareness Month, an industrywide event established in 2001 by the American Association for Long-Term Care Insurance (AALTCI).

"Each year awareness efforts tied to Awareness Month grow," explains Jesse Slome, executive director of the industry's trade group. "From a Congressional Resolution, to proclamations issued by governors and mayors across America, support for the campaign's goal continues to grow."

Slome urges insurance professionals to capitalize on the occasion by using November as an opportunity to discuss long-term care planning with clients. "It's as simple as asking people if they have a long-term care plan in place," Slome notes. The vast majority of individuals and families over age 50 have no plan in place he adds. "As the saying goes, a failure to plan is a plan for failure and while insurance isn't a solution for all, everyone needs to weigh their options."

The Association makes available free marketing tools that insurance professionals can use to promote awareness during Long-Term Care Awareness Month. They can be accessed via the organizations website:

Tuesday, August 17, 2010

Long-Term Care Insurance Sales Summit Set For Vegas

The 9th National Long-Term Care Producers Summit will take place April 3-5, 2011 at the Tropicana Hotel in Las Vegas, NV.

Organized by the American Association for Long-Term Care Insurance, the conference program focuses on four specific areas; selling long-term care insurance during difficult economic times; selling combo or annuity and life products with linked LTC benefits; selling multilife LTC and the CLASS Act.

For the first time, the nation's leading trainers - Phillip Sullivan of and Phyllis Shelton, president of LTC Consultants will be part of the Summit program.

The majority of Summit attendees are relatively new agents and brokers who want to learn from the leading trainers and successful producers. This is the largest industry conference specifically for top long-term care insurance sales and marketing professionals.

Members of the American Association for Long-Term Care Insurance can take advantage of significant savings when they register early.

The complete program and registration details for the program can be found on the Association's website. Click here for the Summit's homepage. Or for more information call AALTCI at (818) 597-3227.

Tuesday, July 27, 2010

Congressman Launches Effort To Stop The CLASS Act

A letter from Congressman Charles W. Boustany, Jr. (R-LA) seeks cosponsors for proposed legislation (H.R. 5853) that reverse legislation creating a new federal long-term care program (CLASS). According to Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), CLASS will likely not be implemented until 2013. "If the plan is going to be changed now would be the time before employers have to evaluate the pros and cons and dollars are withheld from employee paychecks," Slome notes.

The Congressman's letter released reads as follows: Most Americans remain unaware of the CLASS program, a new government-run long-term care insurance program that was slipped into the health-care law.

Speaker Pelosi and her allies behaved recklessly when they used the CLASS program as a $70 billion budget gimmick to fund other portions of the new health-care law. Congress has a duty to stop the implementation of this new unfunded entitlement before a single premium dollar is collected from hard-working Americans.

Instead of setting money from CLASS premiums aside solely for promised benefits, Democrats used it to pay for other parts of the new health law and merely put an IOU in a government trust fund. Americans could be required to repay these IOUs in the form of higher taxes.

Actuaries and budget experts widely agree CLASS is fatally flawed. Senate Budget Committee Chairman Kent Conrad publicly called the program “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of."

The Congressional Budget Office, the American Academy of Actuaries and CMS’s own actuary warn the program will disproportionately attract enrollees with the highest costs. Premiums will skyrocket and discourage young and healthy workers from enrolling. The program will enter what Medicare Chief Actuary Rick Foster called “an insurance death spiral.”

The Chief Actuary predicted that CLASS will begin to run deficits in 2025 and continue to run deficits thereafter. He also estimated that an initial average premium of about $240 per month would be required to adequately fund CLASS program costs. CBO said CLASS “…would add to budget deficits in the third decade – and in succeeding decades—by amounts on the order of tens of billions of dollars for each 10-year period.”

I urge you to cosponsor the Fiscal Responsibility and Retirement Security Act (H.R. 5853). This bill would stop the Obama Administration from implementing a final CLASS plan without a vote of approval by two-thirds of the House and Senate.

Thursday, July 22, 2010

Caregiver of Year Award: Entry Deadline July 26

Do you know a caregiver who makes a difference and deserves recognition? Nominate them for Caregiver of the Year award sponsored by Homewatch CareGivers.

I'm proud to be one of the judges for this most worthwhile effort. There are local recipients and the final national winner receives $5,000.

For more information click on the link below and hurry the deadline is July 26.

Jesse Slome
American Association for Long-Term Care Insurance

Tuesday, May 25, 2010

Republicans Conclude CLASS Act Should Be Repealed

The Joint Economic Committee comprised of Republican Senators issued a report last week referring to the CLASS Act as “a Ponzi scheme of the first order” a quote attributed to Senator Kent Conrad (D-ND).

CLASS, which stands for Community Living Assistance Services and Supports, was included within the health care reform legislation recently signed into law. The new voluntary federal payroll deduction long-term care program will provide a cash benefit to disabled or memory-impaired adults who need help with activities of daily living.

While Congress passed the law including the CLASS provisions, certain key program details including price and benefits have been left to the Secretary of Health and Human Services. In addition, the program start date that many believe won't happen until 2013 has been left to the Secretary's discretion.

The Committee report’s conclusion: “As currently designed, CLASS will not be able to sustain itself without subsidies from taxpayers or from all workers in the form of mandatory enrollment. ”

The report continues, “In addition to being unsound, the program is unnecessary. Americans already have an array of private long-term care insurance options to choose from; many are more economical than CLASS, most offer richer benefits.”

The report ends stating that “The best remedy for the unsustainable, unaffordable CLASS program is to repeal it.”

“This is the first time we've heard the word ‘repeal’ when referring to the CLASS Act,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance ( “I actually wish the federal government would finalize the pricing and benefits for the CLASS plan as soon as possible because employers and consumers are confused by the lack of details."

The CLASS program is designed to be offered primarily through employers. Workers will then be auto-enrolled with the right to opt out. The Congressional Budget Office (CBO) estimates that only 3.5 percent of the adult population, or 10 million people, will enroll by 2019.

"Individuals and especially employers need to know as soon as possible how much CLASS will cost and whether it will provide only a $50-per-day benefit or one that is higher," Slome adds. "It shouldn't take that long to figure this all out."

NOTE: IF you would like a PDF of the Joint Economic Committee report, send me an E-mail. Request: "Joint Report CLASS" and I will be glad to send to you. Write to: jslome @ .

Wednesday, March 31, 2010

CLASS Act Information Worth Reading

We have just posted a current and comprehensive explanation of the CLASS Act with questions and answers online and it is well worth reading. The link is below.

President Obama has signed into law comprehensive healthcare reform legislation that contains a program known as the Community Living Assistance Services and Supporters Act (CLASS Act).

If you are an insurance agent, you will be getting more questions from current clients and certainly from prospects.

If you have questions that are not answered, feel free to send me an e-mail and we will look forward to addressing them.

Click on this link: or type, copy and paste this web address into your browser.

Tuesday, March 23, 2010

My Thoughts On CLASS - Next Steps

If you market and sell long-term care insurance, sooner (or later) you are going to hear the following words from a prospect; "I'm going to wait and check out the new federal long-term care plan."

It was inevitable that media coverage of health care reform would shift from "will the bill pass" to "what does the new law mean for you?" That shift is already taking place and the media watch each other and compete.

As a result, it is very likely that we will see continued and growing coverage of the fact that the health care law contains a new "federal government long-term care insurance plan". And, in a world of 15-second sound bites, that's about as much attention as it will be given ... and also all consumers need to hear to once again put any thoughts of planning on the back burner (the way baxck burner).

I will be writing more about CLASS and shortly will be creatintg material for members of the American Association for Long-Term Care Insurance to use to 1) educate themselves and 2) educate their clients and prospects. Undoubtedly, insurers will be doing likewise and we'll watch for such items and gladly share.

First, it is too early to predict how the CLASS Act will really impact either the individual or the employer-sponsored long-term care insurance markets. The three most important elements are undefined by Congress; (premium) cost to participants, benefit levels and requirements imposed on employers. These may not be available until well into 2011 or 2012 and then it will take time for implementation.

On the positive side, the CLASS Act should create enormous awareness among individuals of the real risk they face and the need to plan. If the plan is priced properly to take into consideration that it is guaranteed issue, then individual (traditional) policies will be able to compete based strictly on more benefits for less cost.

If, however, policies are insufficiently priced (too low to ultimately cover the potential claims risk) it will be more difficult to create differentiation between CLASS LTC insurance and private LTC insurance. Certainly those in positions of responsibility within the industry will work hard to achieve this (but it will not be an easy task).

Because there is a five year plan participation requirement, whatever benefits CLASS ultimately offers will really only have value for those who are currently age 55 or younger. As a result, a significant segment of Americans (those currently between 55 and 65) will fall through the donut hole and fail to have long-term care protection.

Jesse Slome
Executive Director
American Association for Long-Term Care Insurance

Wednesday, March 3, 2010

A Webinar On The CLASS Act

Many followers of my blog, also are members of the American Association for Long-Term Care Insurance and have attended our Producer Summits. If you have, you know that Claude Thau and Dawn Helwig are two of the brightest minds in this industry. They are both dear friends and of enormous help to what we do. Allen too!

So I am pleased to share information about a webinar these folks are doing that will deal with the CLASS Act. Here is more information.

The CLASS Act has been included in every major health care reform proposal in recent months, including President Obama's proposal to the Health Care Summit. If you would like to learn more about this long-term care insurance (LTCi) industry-changing proposal, please join Claude Thau of Thau, Inc. and Allen Schmitz and Dawn Helwig of Milliman, Inc. for a WebEx presentation on Thursday, March 11th, at 2:00 Central time.

It will cover the basics of the proposals, as well as several analyses of the program. In addition, we will discuss the ramifications of this bill for the private long-term care industry. Will it create a market for supplemental coverage? Will it increase private LTCi sales or result in further sales decline? Who will the program appeal to and what kind of anti-selection will result?"

They are charging a fee of $25 to participate.

To register for the Webinar, email your name and email address to

Claude will send you a "CLASS Act" invoice from PayPal that will allow you to use PayPal or a credit card to pay the $25 fee. After your $25 fee payment is received, Claude will send you the link for the web presentation and the long-distance phone number for the audio portion.

Claude's phone number and contact information can be found immediately below if you have any questions.

Claude Thau
Phone direct: 913-403-5824
Phone main: 913-384-6300, x2241
WATS line: 800-999-3026, x2241

Tuesday, January 12, 2010

2010 Long-Term Care Sales Achievement Awards Announced

"Rookie of Year" Category Added To Recognize Industry's Newer Producers

Insurance and financial professionals who market long-term care insurance protection are invited to enter the Eighth Long-Term Care Sales Achievement Awards. The annual program, conducted by the American Association for Long-Term Care Insurance, recognizes producers based on sales made during 2009.

"Awards are given for sales of individual long-term care insurance policies as well as multi-life long-term care," explains Jesse Slome, the organization's executive director. A new category has been added to recognize producers who began selling long-term care insurance in 2009.

Award recipients are ranked on a national as well as a state-by-state basis with their names published in the Association's annual LTCi Sourcebook. "This is an excellent way for agents and brokers, even those who have just started selling, to show prospects they have been recognized as a leading producer in the industry," Slome notes. The minimal placed premium for 2009 is $2,500. "All those who enter and qualify are recognized," he adds.

Information and the entry application can be accessed online via the Association's website: Established in 1998, the American Association for Long-Term Care Insurance is the national association serving insurance and financial professionals who provide long-term care financing solutions.

Tuesday, January 5, 2010

Audio Recordings From Long-Term Care Insurance Producers Summit

Audio recordings from the recent LTCi Producers Summit are now available. The link to see the listing of all 36 sessions can be found below. Audios start at $15 each. Audios with synchronized Power Point presentations are $22 each. A discount code for AALTCI members will save you 20%.

To support the Association's efforts, the recording company provided us with a few DVDs containing all the sessions including synchronized Power Points. You can view these presentations on your computer while listening to the presentations (each is between 60 and 90 minutes long).

We are making A DVD-ROM WITH ALL 36 SUMMIT PROGRAMS available for $229 (while supplies last). Mail requests with checks only (details below). If you order online, the cost is $339. For use on computers.

To see all available 2009 LTCi Summit audios and order: click on this link:

AALTCI members can save 20% on their orders: Enter the Code "QRR7UU" during checkout on the payment page.

To order the complete DVD of all 36 sessions for $229 (Save $110 versus online cost of $339) send a check payable to AALTCI.
Mail to AALTCI - DVD, 3835 E. Thousand Oaks Blvd., Ste 336, Westlake Village, CA 91362

Here are the top-rated Summit sessions based on Evaluation Forms submitted by Summit attendees.

LTC 828 Public Policy Impacting LTC - The Latest From Washington DC - The CLASS ACT (Attendees' Evaluation Score 5.0)

LTC 834 The Instincts Of Success - Frank Maselli, Keynote speaker (Score 5.0)

LTC 836 $100,000 Of Marketing For FREE - How To Be The "Go To" LTC Expert In 2010 - Jesse Slome, AALTCI (Score 5.0)

LTC 830 How To Sell Partnership Long-Term Care Insurance - Panel (Score 4.78)

LTC 817 Yes You Can ! . Create A No-Cost Internet Presence For Google - Jesse Slome, AALTCI (Score 4.70)

LTC 831 Keynote: Referrals The Professional Way - by Frank Maselli (Score 4.70)

LTC 807 The Impending Collapse Of The Roadblocks To LTC Insurance - Steve Moses - Center For LTC Reform (Score 4.29)

To see all available 2009 LTCi Summit audios and order: click on this link:

Wishing you a great start to 2010.

Jesse Slome
American Association for Long-Term Care Insurance