long term care misinformation from npr

hello clients, prospective clients, and business alliance members.  scanning legitimate and worthwhile email blasts periodically yields valuable information; however, you may occasionally find blasts from credible sources that provide misinformation upon further research.

national public radio (npr) recently published a piece on may 8, 2012, called, "long-term-care insurance: who needs it?"  the author, marilyn geewax, rhetorically asks an ironic question, and ultimately, lets down her target readers with misinformation.  she has perpetuated common myths about private long term care insurance, scaring away target readers who have the most to lose.

npr's target listening and viewing demographic includes the following attributes, according to its 2009 national audience insight and research:

• the median age hovers around age 50
• the median household income exceeds 80,000, well above the national average of 55,000
• 65% of listeners have a bachelor's degree, compared to the national average of 25%
• listeners are three times more likely to hold a graduate degree

it appears unusual to begin the piece with such a bold statement, considering the baby boomers' future uninsured healthcare liability exposure.  most long term care insurance experts predict that many americans over the age 65 will require long term care.  insurance industry and government statistics consistently point out that between 60% to 70% will need long term care.

her readership group stands to benefit most from private long term care insurance and has the most to lose considering its relative affluence; moreover, longer lifespans for those sandwich generation members around age 45 will more than likely exceed the age 65 cohort.  so, why misinform your readership about a critically vital topic facing massive uninsured healthcare expenses from longevity and aging?

the following excerpts highlight misinformation:

a) long term care insurance costs too much

ms. geewax diligently provides sample premium based policy information with standard options, such as benefit pool, health rating, age, etc.  premium based policies generally fit individuals who invest in coverage at an early age and have consistently strong cash flow; however, consumers can choose annuity or life insurance based long term care, not just premium based, solutions. 

unfortunately, she misses two highly critical long term care solutions that offer consumers valuable choices.  you can explore learning more about long term care combination solutions here:
 
http://www.lifehealthpro.com/2010/01/25/the-pension-protection-act-and-long-term-care-insu

her readership would stand to benefit from knowing this information, rather than thinking that all solutions revolve around premium based policies; moreover, you do not have use or lose your long term care benefits with a long term care combination solution.  your unused benefits remain wrapped up in a financial instrument with residual cash value, creating future legacy or pension opportunities.

b) long term care insurance is cheaper when you sign up by age 60

her statement clearly does not make sense since most insurance carriers will begin considering consumers around age 40.  why put off the decision when you should begin considering it much earlier in your retirement planning years?  consumers will obtain more favorable benefits when younger and healthier rather than seeking out coverage when approaching peak claim years.  

an individual approaching age 60 should consider supplementing existing coverage with a combination solution, rather than a premium based solution; conversely, you should consider a premium based solution much earlier than age 60.  your combination solutions work when you can reallocate your savings with larger single premium investments.

how can she discuss the age question intelligently when she does not consider long term care combination solutions?

c) long term care insurance covers various disabilities

long term care insurance carriers will pay claims generally based on cognitive or physical impairment.  ms. geewax did not even bother to address the physical impairment by its correct name, your assisted daily living (adl) activities.  your adl activities include bathing, continence, dressing, eating, toileting, and transferring. 

you must generally have cognitive impairment or an inability to manage two out of six adl activities to receive benefits.  most carriers will not pay benefits without meeting that criteria, and they do not call the adl activities definition, "various disabilities."

you can explore learning more about your adl activities here:

http://www.seniorhomes.com/p/activities-of-daily-living/

d) long term care policies are capped off at three years

once again, her position remains incorrect.  insurance carriers will provide you with lifetime benefits, provided that you pay additional periodic or single premiums.

for instance, a client had an option to purchase lifetime coverage through a single premium life insurance policy.  her proposed 82,000 single life insurance premium would provide 3,426 per month for 50 months; however, an additional upfront 5,000 premium would continue benefits beyond 4 years indefinitely, managing an unusually long stay.

not too bad for an 87,000 investment, far exceeding the "standard" three years!

npr should have considered the entire long term care insurance spectrum, rather than perpetuating stale myths.  its target market deserves better editorial financial advice.

...special thank you to ilia dolaptchiev, our summer intern, for proofing and criticizing this critical piece.  he definitely earned his keep today!