Limited LTC Benefit vs Lifetime

NEW BRAUNFELS, Texas, Sept. 14 /PRNewswire/ -- Smart retirement planners understand the need for long term care (LTC) insurance. But how much do they need? Typical benefit periods are 2 years, 3 years, 5 years and lifetime (unlimited). Does someone need to purchase a lifetime benefit to feel secure? "Until recently, little objective data existed to guide consumers in answering this question," comments Ronald Hagelman, President of Republic Marketing Group, Inc. a national distributor of long term care insurance.

The results of a study conducted by Milliman Consultants and Actuaries tell us that consumers should feel very comfortable purchasing a limited-duration (less than lifetime) benefit. The study reveals, among policyholders with lifetime benefit periods, only 14% of claims last more than three years, and only 4.3% last more than five years.

What happens to a consumer who purchases a limited-duration policy, only to find his/her need for care lasts longer than the policy? That's when a policyholder may turn to personal assets, income, and/or a government program. "That outcome isn't a failure for the policyholder," says Barry Fisher, V.P. of Marketing at Republic Marketing Group, Inc. "Long term care insurance buys time while preserving money for the policyholder on claim. He or she enjoys years of private-pay choices, such as home-based care, while preserving assets and income. The Milliman study makes it clear: the vast majority of policyholders will never run out of benefits. And, even for the few who do, some coverage is much better than none."

The worst-case scenario? A baby boomer with dependent children suffers an accident or catastrophic illness, can no longer work, and needs many years of long term care. A new policy, Security Advantage(TM) Long Term Care Insurance, boosts benefits for claims that hit before the typical claims age of 85. For example, a three-year benefit can become a 12-year benefit for a baby boomer hit with an LTC claim such as early Alzheimer's, or M.S.

There's no need to overbuy when purchasing a long term care insurance policy. Current claims data shows that a policy with a 3-5 year benefit is a smart buy.

Financial Realities Meet Dreamy Expectations

By Mary Pat Mansfield

As many of us toil each day through our workaday lives, we strive to maintain comfort of our families and security for our later years in life. Yes, we are all ultimately saving for retirement and dream of the golden years. Many of us have received reports from the Social Security Administration about how much Social Security we can expect once we retire at age 65 or 70 and soon realize that our expectations may have to be readjusted.

So what does it mean to be fiscally fit past 50? It's really a matter of figuring out what personal expectations you have for retirement. Do you want to own a house on a golf course or are you content to stay in the home you've always lived in? Do you have dreams that are realistically achievable? Are there things that you simply must try before you aren't able? Have you always dreamt of traveling the world once you get the time?

We all understand the notion of setting financial goals for our later years in life which usually equates to having a certain amount of income each month on which to live. But, it's important to make sure that the things you want to do match with the amount of money you've saved. Otherwise, you could be facing a deep disappointment that could lead to depression in later years.

Here's a good way to assess if your finances match your expectations:

List all the major daily expenses in your life today that you will continue to incur when you reach retirement. Examples include daily expenses like groceries, medical bills, housing, automobile expenses and taxes.

List all the things you currently do for "fun" that cost of money. Traveling, entertaining, education, fitness/exercise are good examples. Assess whether these are things you may want to continue doing as you reach your retirement years.

Finally, assess all the things that you've always dreamed of doing in retirement. Have an open discussion about what your expectations are with your family and/or spouse so you can begin planning toward those goals. There's a possibility that you might have to let go of some of your current "fun" to make your retirement dreams become a reality.

The bottom line is that if we continue to evaluate what we want and set financial goals that will help us achieve our dreams, then we've achieved financial fitness. In the long run, it's not about having the biggest bank account, it's about leading a life in our later years that is fulfilling and gratifying to us as people.

Medicare Premiums rising for high-income beneficiaries

Higher-income people will have to pay higher Medicare premiums than other beneficiaries next year as the government takes a small but significant step to help the financially ailing program remain viable over the long term.

People with incomes over $80,000 or $160,000 for married couples will be expected to pay more. Supporters say it makes sense for the wealthy people to pay more at a time when Medicare costs are soaring. The premium in question is the Part B of Medicare. The surcharge will be phased in from 2007 to 2009.

The premium will be based upon your 2005 AGI (Adjusted Gross Income). For an individual the surcharges are as follows:

• $80,000 - $100,000 = 13.3%
• $100,000 - $150,000 = 33.3%
• $150,000 - $200,000 = 53.3%
• Over $200,000 = 73.3%

The surcharges for a married couple are as follows:

• $160,000 - $200,000 = 13.3%
• $200,000 - $300,000 = 33.3%
• $300,000 - $400,000 = 53.3%
• Over $400,000 = 73.3%

For 2008, the surcharge percentages will DOUBLE those shown in the previous tables and be based upon 2006 income. For 2009, the surcharge percentages will TRIPLE those shown above and will be based upon 2007 income. After 2007, the income levels will be adjusted for inflation.

Medicare recipients will receive a letter regarding this in mid November. Note that it comes out AFTER the elections.

Additional stress for caregivers of Alzheimer's patients

The cost of care and the related stress for those who care for someone with Alzheimer’s disease increases substantially over those who care for someone with another disabling condition, according to a new study by the MetLife Mature Market Institute® (MMI). The study reports that the dollar value of family caregiving for Alzheimer’s caregivers is 41% higher than for others and that Alzheimer’s caregivers indicate that caregiving has caused their health to worsen 45% more often than other caregivers. Additionally, Alzheimer’s caregiving requires a greater commitment of time, and spouses of Alzheimer’s caregivers more often report having left their jobs to provide care.

“The MetLife Study of Alzheimer’s Disease: The Caregiving Experience” studied more than 400 people whose care recipients were over the age of 65 and had long-term care insurance policies from which they were receiving benefits. It found the following:

* Amount and Type of Caregiving AssistanceCaregivers for those with Alzheimer’s disease or other dementias provided an average of 47 hours of care per week, compared to 33 hours by caregivers for physically impaired individuals. Those with Alzheimer’s disease (AD) or another dementia needed additional help with personal care tasks called Activities of Daily Living (ADLs), more help with activities such as transportation, cooking and shopping called Instrumental Activities of Daily Living (IADLs) and more hours of companionship care, including supervision for safety.

* Caregiver StressCompared to peers caring for people with purely physical impairments, caregivers of persons with dementia experienced more stress on all measures.

* Disruption for Working CaregiversSpouses of individuals with Alzheimer’s disease or another dementia were at the highest risk of quitting work due to caregiving responsibilities —10.6% left their jobs to provide care, compared to 4% of the other caregiving spouses.

* Costs of CareCaring in the community for someone with dementia costs 31% more overall than caring for a person with serious physical ailments. For an individual with Alzheimer’s disease or a related disorder, the total average cost of services annually, considering paid and unpaid care, was $77,447, compared to $59,088 for a person with serious physical problems. The dollar value of family caregiving is 41% higher for those caring for a family member with dementia than for other caregivers with the major difference being in the category of companionship care (23% of the dollar value of family care for AD versus 17% for other caregivers). This is consistent with concerns for safety that family members of those with Alzheimer’s disease have.

* Caregiver HealthIndividuals caring for a family member with dementia were 45% more likely to indicate that caregiving has caused their health to worsen.

“Caring for a family member with Alzheimer’s disease exacts an enormous toll,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “Of the approximately 4.5 million Americans with AD or a similar disorder, more than two-thirds live at home cared for by family and friends. That number is expected to triple by 2050 to 13.2 million. With these increasing numbers of individuals in need of long-term care, family caregivers will become an even more critical component of the long-term care delivery system in the years ahead. Having supports such as long-term care insurance and community services is important to allow caregivers to continue to care for their loved ones without neglecting their own needs. We know that workplace flexibility can ease the burden tremendously.”

Claimants from eight long-term care insurance companies (representing 80% of the market) were included in the study and 92% of identified primary family caregivers for these claimants responded to questions about their experience during a telephone interview with a trained clinician. Forty-two percent of the respondents (178) were caring for an individual with AD or another dementia while 58% (245) cared for someone with serious physical problems. In both groups, just more than 50% of caregivers were spouses.

The MetLife Mature Market Institute is the company’s information and policy resource center on issues related to aging, retirement, long-term care and the mature market. The Institute, staffed by gerontologists, provides research, training and education, consultation and information to support Metropolitan Life Insurance Company, its corporate customers and business partners. MetLife, a subsidiary of MetLife, Inc. (NYSE: MET), is a leading provider of insurance and other financial services to individuals and institutional customers.

LifePlans, Inc., which conducted the analysis for the MetLife Mature Market Institute, is a risk management and consulting firm that provides data analysis and information to the long-term care insurance industry. The firm works with insurers, the Federal Government, industry groups and other organizations to conduct research that helps these groups monitor their business, understand industry trends, perform effective advocacy, and modify their strategic direction.

The entire report, The MetLife Study of Alzheimer’s Disease: The Caregiving Experience, can be found at: www. maturemarketinstitute.com under “What’s New.”