Americans Fail Long Term Care Insurance Planning Quiz

When it comes to knowledge about long-term care insurance planning, Americans once again received a failing grade.

Long-term care poses the single largest risk to Americans living on retirement savings and income according to the American Association for Long-Term Care Insurance, the industry trade group. Yet, few consumers have the facts correct when it comes to understanding available planning options.

As the U.S. population ages, the percentage of people older than 65 will increase from about 13% in 2009 to 20% in 2040. Part of the projected increase is due to an increased life expectancy beyond age 65. After retirement health insurance and Medicare provide very little long-term care benefit, if any, according to financial planning professionals.

The results of a just-released national study of individuals between 40 and 70, most reported knowing what long-term care is and how much it costs. But their scores fall short when it comes to knowing what percentage of people will need long-term care and how they will pay for it. According to the study conducted by the MetLife Mature Market Institute, just about four in ten adults (36%) know that 60-to-70 percent of 65-year-olds will require long-term care services at some point in their lives. Just over one-third knew that most long-term care services are received at home.

While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall.Few participants in the survey reported that they are taking action to protect themselves from such potentially catastrophic expenses; only 18% know long-term care insurance rates are based on age, but almost nine in ten (87%) are aware that a comprehensive long-term care policy covers home, assisted living and nursing home care.

The survey also reported that eight in ten respondents (85%) understand that long-term care could have many causes, such as Alzheimer's disease, an accident or a chronic or disabling condition. More than four in ten (43%) are able to correctly identify the national average monthly cost for assisted living.

For more information on long-term care insurance, visit the Association's Consumer Information Center where you can read the organization's free guide on reducing the cost of long-term care insurance. Click here to read the guide.

Long Term Care Insurance Marketing Tools Available

November is national Long-Term Care Awareness Month, an outstanding opportunity for insurance and financial professionals to communicate with clients and prospects about this important protection.

The American Association for Long-Term Care Insurance, the industry's professional trade organization, has created a variety of marketing tools for use by agents and brokers. The tools consist of a direct mail letter to be sent to prospects as well as an E-card that can be personalized and E-mailed by the agent. The E-card is private so that only the recipient is notified and can directly reply back to the sending agent. These tools are available free of charge for use by all agents via the Association's website. Click here to access the free marketing tools:

In addition, a number of special tools have been created for use by Association members. These include a press release that can be personalized with the agent's information and distributed to local media. A letter for mailing to secure radio interviews is also available within the Association's Online Learning, Marketing & Sales Center.

Membership in the American Association for Long-Term Care Insurance remains $49 through December 31, 2009 after which it will increase to $99. For more information, click here to visit the Association's website.

Long Term Care Insurance Trade Organization Applauds Baucus Proposal

The American Association for Long-Term Care Insurance, the industry's national professional organization, commended Senate Finance Committee Chairman Max Baucus (D-Montana) for including a proposal to allow cafeteria plans to offer qualified long-term care insurance as part of his health care reform package.

The proposal was part of the Senator's "America’s Healthy Future Act," health care reform legislation which the Senator notes is intended to lower costs and provide quality, affordable health care coverage.

The health care reform proposal will make it easier for families and small businesses to buy health care coverage including long-term care insurance, ensure Americans can choose to keep the health care coverage they have if they like it and slow the growth of health care costs over time. The Finance Committee will meet to begin voting on the Chairman’s Mark next week.

The proposal recommends creation of a Simple Cafeteria Plan – a vehicle through which small businesses can provide tax-free benefits to their employees. This change would ease the participation restrictions and include self-employed individuals as qualified employees. The proposal also exempts employers who make contributions for employees under a simple cafeteria plan from pension plan nondiscrimination requirements applicable to highly compensated and key employees.

Finally, the proposal allows for qualified long-term care insurance to be provided under a cafeteria plan to the extent the amount of such contributions does not exceed the eligible long-term care premiums for the contract. This proposal is effective beginning on January 1, 2011.

The full text of the America’s Healthy Future Act is available at http://finance.senate.gov/sitepages/leg/LEG 2009/091609 Americas_Healthy_Future_Act.pdf