Below are actual questions that we have received from LTC insurance
agents, with the answers from Phyllis Shelton. If you have
a question that you do not see below, please click
We will respond as soon as possible. If it is applicable to other
agents, we will post it here with our other “Most Common Questions”.
I read parts of your book this weekend and found it very helpful. I have one
question. On page 168, there is a topic called "Long Term Care Annuities." I
am not familiar with any companies that offer this product. Can you tell me
the annuity companies that offer these?
I just updated my book for an April
publication date. The special LTC annuity I referred to on pages 168-171
is Annuity Care, a Golden Rule product, and Immediate Care is on page
172. It is a Golden Rule product as well. The variable annuity after
that section was a Nationwide product that is no longer on the market.
Hope this helps!
We know that there are many instances of private insurance being superior to
group federal or group state long-term care insurance programs. We would
like to be entered as one of your public speaking advisors if and when federal
long-term care insurance seminars are conducted in our area. We believe that
the more people that own long-term care insurance the better. It would give
us exposure as public speakers and of course, self -interest would dictate
that many federal employees would be better served from a cost and benefit
point of view and meeting prospective long-term care clients face to face
would be nice! Are you looking for long-term care insurance federal speakers?
From your prospective, do you perceive a problem if a public employee would
be better served by a private carrier other than a group carrier if we met
them at a long-term care insurance federal seminar?
My contract with the federal program
ended 12/31 after we completed 2020 meetings from July to December, so
it's all over now - whew! My 2003 book will be out in April and you'll
want to grab it because it has an entire section on the federal program
and that will help you as you review that plan and private plans with
your clients. It's called "Long-Term Care: Your Financial Planning
Are there any reputable carriers that might offer LTCI to a mentally challenged
adult in PA? This person is in good health, works full-time, has her own
apartment, is fully independent, performs all ADLs and IADLs, except for
finances, but has the mental capabilities of a 13 year-old.
I'm not aware of any. Her only chance that I know would be to
have it offered through her employer with modified underwriting or guaranteed
issue. Maybe you can work it from that end and get the employer to offer
a voluntary plan? I have a small group LTCI offering on my policy comparison
and presentation materials in my worksite marketing system if any of
that would help you.
Many elder law attorneys are still pushing trusts as a way to hide your assets
from Medicaid. Do trusts really work? Where can I find out more information?
The best source I know for this
is the CLTC designation that Harley Gordon offers at www.ltc-cltc.com.
Get Harley's book for a quick lesson - I think he just updated it. The
Elder Law Report, by Harry Margolis is also excellent to keep up on what
works and what does not (800-562-1973) - that's a paper and an online
monthly newsletter. The answer to your question isn't a simple yes or
no - most trusts don't work but it depends on when they're set up and
is it part of a half-a-loaf planning method? A supplemental needs trust
for a disabled child is ok, so there are different types of trusts. Of
course the end result of eliminating choice and independence is what
we're really selling against - there will always be loopholes to get
there but who wants to wind up like that if there's any other way? I
have a great brochure for the consumer called, "10 Reasons Why It
Might Be a Bad Idea to Transfer Assets to Qualify for Medicaid" that
makes a great mail piece or handout if transferring assets is a big problem
in your area. Call my office for a sample (800-844-4893) or you can order
directly from my website as well at www.ltcconsultants.com.
My main company is New England Financial that is regulated by MetLife. Have
any of your materials been approved for use in the state of AZ and also by
Unfortunately not, but as an agent you can ask that they be approved. I'll
be glad to submit them but the companies want the agents to request them.
I'm meeting with the head of individual MetLife this week and I'll let
her know I received your email. You can certainly use anything that doesn't
go in front of the client - our training materials, the policy comparison,
I recently received a copy of your very informative book and look forward to
more cold nights so I can finish it! Can I trouble you to answer two questions?
1. Do you have a statistic you can share for the average age that someone in
this country enters a nursing home or has a LTC claim? I have been asked this
question but can't seem to find the answer anywhere.
2. Also, an LTC 101 question, please confirm that with the inflation rider
even if you are on claim the daily benefit will still increase every year.
Glad you are enjoying the book - the 2003 version went to the
publisher last week and is scheduled to be out in April with lots of
new stuff, including the new Federal LTC Program and a section on critical
illness insurance vs. LTC insurance. To answer your questions, the average
age for a claim is 80, but remember that 40% of the people who need LTC
are working age adults, between the ages of 18-64. Most of these people
are not in nursing homes (less than 10% of nursing home patients are
under 65), so the lifestyle of the family is never the same after a LTC
need strikes the household. And YES, the benefit grows during a claim
when one purchases the compound or simple riders and premium is waived
in most policies for all benefits on the first day of benefit. This is
not true for the Future Purchase Offers type of inflation coverage. With
most policies, the future offers do not continue while on claim, so the
riders are the better way to go. You would probably really enjoy my policy
comparison so you can see how all the major companies offer inflation
coverage. It's in my online catalogue if you want to order it at www.ltcconsultants.com.
May I use your "Caregivers Glass Ceiling" article for a women's magazine?
Is it a good idea to write a series of articles instead of just one? How do
I answer a legislator who wants to impose minimum staffing levels at nursing
homes? Finally, any tips for doing Christian radio talk shows?
Sounds like you don't need a lot
of help from me because you are on your way! You can certainly use my
Caregiver's Glass Ceiling article. Just quote me as the author with this
byline: Phyllis Shelton, President of LTC Consultants, Nashville, TN
is the author of Long-Term Care: Your Financial Planning Guide, Kensington
Books, 2003, www.ltcconsultants.com.
Please put the book title in bold and my company name in italics. You
can copy and paste the article from the website.
I always recommend writing in a series. Be sure
and refer to what you wrote about in the preceding issue and what's
coming up in the next issue to keep people engaged.
The radio talk shows are wonderful! I have a list
of questions to give media personalities in the Instruction Manual
of our Ultimate SellingSystem. If you bought the Dream Package at our
seminar it's the big book in that. It also has a section on how to
make yourself famous in your community with seminars and dealing with
About the resolution concerning minimum staffing
levels, without more private pay dollars, nursing homes can't afford
the minimum staffing level in the nursing homes the legislator is promoting.
Those dollars are in long-term care insurance, so you could write a
Letter to the Editor connecting the dots on those two thoughts. Also,
on the Christian radio station, be sure to emphasize taking care of
your family with long-term care insurance and also that people can't
leave their money to the church if they spend it all no long-term care.
I am looking for a source of pre-approach prospecting letters
for LTC without spending enormous amounts of money.
Our entire Ultimate Selling System
that includes training, seminar materials, sales presentation materials,
policy comparison, consumer video, consumer brochures, multiple audio/video
and a series of ten prospecting letters AND MUCH MORE sells for only
$699, less than commission on one LTC insurance policy. I can't offer
you a better deal than that! Please call Debbie in my office for more
info at 800-844-4893 and you can view it on our online catalogue on our
I am having a web page put together for my Long-Term Care Only agency. Obviously
this will be directed to consumers. This has prompted me to ask you a couple
of questions: First, do you think that it would be of any benefit to link to
your site or, would it just confuse consumers? Second, do I have your permission
to use any of your material, printed or other?
Yes, my website has a consumer side so I think it would be really beneficial
to link. Concerning the materials, I do earn my income by selling consumer
materials like my three consumer brochures and my book in addition to selling
those materials that relate only to agents so those you can purchase. The
brochures are extremely inexpensive and have a place on the back for your
name and contact info. They can be used as seminar handouts, leave-behinds
at appointments, in prospecting letters, etc. The book can be
purchased in bulk at only $7 per copy and many agents are using it as a lead
generator. All are on my website in my online catalogue. As far as articles
I've written, you can certainly use those and just give me credit. The link
to my website for more information would be nice there as well as that lets
consumers see my book on the website. A 2003 version will be published in April
Is there any research completed on whose buying LTCI, not only by age but by
Yes, there is - the HIAA studies - the Buyer/Nonbuyer surveys and market penetration
is in "Long-Term Care Insurance in 1998-1999" (published 2/02)
- go the www.HIAA.org website.
The market penetration has to be taken with a grain of salt - they only
look at percentage of people who have LTCI based on ages 65 and up, but
it's still revealing. And the main characteristic of the buyer is that
he/she is a "planner" type person
Thanks for the good information on you web site. I reviewed you FAQ but didn't
see a question relating to the "Restoration of Benefit Rider" offered
by most companies. I'm working with a retired couple of means who have already
purchased their LTCI but are looking at assisting their 39 year-old son and
his 37 year-old wife in purchasing a LTCI policy. They decided against the
Restoration of Benefit Rider for themselves because of their age, mid 60's,
and they can afford to totally self-insure anyway. For their son and his
wife they are not sure the Restoration of Benefit Rider is a good buy for
the money. We have talked about an accidental injury or stroke while they
are younger where they may recover to the point they don't require any treatment
for six months and would need to restore the benefit. They just don't see
the value of this rider. What is your opinion of this rider for the younger
ROB is a good rider but not a great one in my opinion because very few people
get better once they have a LTCI claim. This is particularly true with
tax-qualified policies because they have to be expected to need help at
least 90 days before a claim is paid anyway or have a severe cognitive
impairment, and they don't get better from that as you know. It could possibly
happen with a younger person as you point out from an accident or maybe
a stroke. If the younger couple can afford it, then sure, go ahead and
sell it. If it comes down to being able to afford the policy or not, then
don't. And don't sacrifice another more important feature for it - be sure
and get the compound inflation and a meaningful daily or monthly benefit
for their area (or any other area they think they might move to). Also,
if you are selling a reimbursement policy, don't forget to consider there's
usually an additional 20% or so in miscellaneous charges like drugs and
supplies above room and board.
Do you have any data on the Federal LTC program? I'm about to start writing
about features and differences in the plan.
I've just finished the employee education effort for the Federal program (2013
meetings since 7/15/02, so I know more than most about it. It is a great
program, actually. The 75% home care benefit will pay informal caregivers
the entire benefit period (limitation of 365 days for immediate family);
it pays drugs and supplies in the nursing home, and the optional weekly
benefit applies to nursing home as well as home care, a definite advantage
if you have a high amount of drugs/supplies in one day. The OPM oversight
makes it not as susceptible to rate increases as some companies in the
private market, plus new benefits don't have to be filed with the states,
so the program can react quicker to the need to provide benefits for new
services than companies in the private market.
Considering your involvement in the development of the Federal plan, why isn't
it one of the policies on the CD?
Because we are under a confidentiality agreement through the end of the year
- I can probably add it to the next version. Thanks.
Thank you for all the information and knowledge available thru your web site
and books. My goal is work in and around the LTC Industry, I am curious about
your feelings toward the CLTCP and LTCP Designations being offered.
I don't advocate either one as I am a third-party trainer. I just offer my
online class (www.ltcuniversity.com )
as a foundation before one takes either designation in order to get the
maximum benefit out of studying for a designation. I do think it's great
to have a designation and it's sorta like ChFC and CFP - lots of people
have both. It just shows the consumer you've certainly gone the extra mile.
Do you know the daily tax-exempt amount for a reimbursement LTC contract for
All of the 2003 info is on the home page of my website - did you see the "2003
updates" to click on? And I don't think you mean a reimbursement policy.
There is no limit for that as a reimbursement policy will never pay more than
the actual charge. There is a limit for the indemnity policy, unless charges
match the payout. Hope that helps.
Is there a recognized designation associated with the knowledge obtained from
LTC University (www.ltcuniversity.com)
My course is really positioned to be a prerequisite to any designation you
seek for LTC insurance. It's priced much lower as you can see and is really
designed to give you a very strong foundation so you get the maximum benefit
of a LTCI designation. It's about a 6.5 hour time commitment so a very small
effort for a tremendous return in knowledge and professionalism. Best wishes
for your continued success!
Is there a creative way children can purchase long term care insurance for
their parents and enjoy tax savings or benefits?
Don't know of any way unless the parents are considered dependents in the eyes
of the IRS - that's the only way the premium would be counted as a medical
expense for the adult child. Another idea is to use the $11,000 annual
gifting opportunity - the child gives to the parent and the parent uses
the money to pay LTCI premium. Then the parent gets the tax deduction;
i.e. the age-based amount per the HIPAA table counts as a medical expense
for the parent. Hope that helps.
What can an S-corp. entrepreneur deduct for 2002 as far as his LTCI premium?
Would this be 70% this year, 100% in 2003 as a business deduction? Individually,
he will not have 7.5% in medical expenses.
Just go to my home page and click on the 2003 Update
and all the tax info for 2003 is there for you - it's 100% of the age-based
amount per HIPAA for 2003 for the self-employed first dollar deduction.
I wanted to mention that I attended one of your seminars which was a two
day seminar in East Hartford on Long Term Care. In the seminar it touched on
different areas such as sales, product knowledge, and different ways to market
Long Term Care. One of the ways mentioned, was to network with attorneys that
do estate planning. So, I've been making phone calls to them, in hoping to
set up appointments and receive referrals from them. I would like to know what
would be a standard fee for a Long Term Case ranging from $2000 to$7000. Could
you please let me know?
I've never paid anything to attorneys - and you have
to be so careful about all that anyway. Attorneys are doing their clients
a favor by making sure they get the information about LTC insurance and you
can refer clients to attorneys for legal needs, so it's a reciprocal relationship.
You can also use them in public seminars that you do as panel members. You
can also help an attorney do a client seminar - he/she can cover legal issues
of planning for long-term care and you can do the LTCI portion. Hope that
helps. It's a win-win relationship for all, and the clients are very well
Are there any problems of including the LTCI premium as part of a 105 Plan
for a Sole Proprietor who hires his wife as the only employee? No other Medical
Insurance in the 105 Plan, just other medical expense reimbursements (HRA), the
sole proprietor also has a job where the employer pays 100% of the regular Medical
Insurance Coverage but does not want to pay for the LTCI.
The answer to the question is yes, the LTCI premium
can be deducted as a business expense on Schedule C per section 162(a) and
excluded from the spouse's income per Section 105 (b) as long as the spouse
is a bona fide employee. The owner/sole proprietor should substantially control
the business in terms of management decisions and make sure the spouse is
under his direction and control (i.e. as an employee). If the spouse is really
a partner, the benefit is lost. Also, we're talking the age-based amount
of premium per the HIPAA table, not 100% of premium. That's because Section
105(b) defines medical care per Section 213(d), and that specifies the age-based
table when it comes to long-term care insurance. I've attached the Letter
Ruling 9409006 so you can see the reasoning. Feel free to check this out
with your tax advisor as well.
Could you guide me to the top 3 contracts available today with solid companies?
Unfortunately we'd be out of business if I recommended
specific companies. Our contribution on this is to have the most current,
and accurate policy comparison - we just finished the October 2002 version
with new policies from 10 companies. We include the ratings and assets and
our advice is HUGE companies with high ratings. Please call us at 800-844-4893
to order or go to our website at www.ltcconsultants.com - and ask for the
October 2002 edition.
Wanting the answer preferably from some government publication, an elder care
coordinator asked, "Would having a LTC policy hinder getting Medicaid?" I
was at the seminar in October and enjoyed it very much! Thanks.
There is no official answer in a government
publication for this that I know of. The answer is that the benefits of the
policy will count as income and that would be added to whatever income the
applicant already has. If he/she qualifies for Medicaid, their income and the
policy benefits go to the nursing home and Medicaid pays the difference between
that figure and the Medicaid rate for the nursing home. BUT the purpose of
the policy is to keep people off Medicaid by making them private pay patients
and giving them all the choices that entails. The only way a person with LTC
insurance could wind up on Medicaid is if the benefits at claim time are insufficient
and he or she can't make up the difference ...which is why it's really important
to make sure the person has the appropriate daily or monthly benefit and the
appropriate inflation coverage for his or her age...5% compound for those under
age 70, for sure. Feel free to share this email with the elder care coordinator
if that will help, and show her my book so she knows this is my field. Thanks
for coming to the class!
What would a normal size estate have to be in order to self-insure? I realize
that it makes sense to have LTC insurance but not sure on the numbers 1-2 million?
Is there any reading that will support that number? Thank you.
We have a
wonderful software that helps me answer this question - it's in our catalogue
on our website and it's called "Economic Impact Software". It shows
the true cost of LTC beyond paying for the care itself - it looks at lost investment
opportunity, capital gains tax if assets are sold to pay and several other
factors. It then compares self-paying with buying LTCI and also applies the
lost investment opportunity to the money spent on premiums as well. For example,
looking at a 30 year planning period for a couple, ages 57 and 55, and assumptions
are the husband has a five year LTC episode at age 75, current cost of care
is $160 per day and assuming a 5% inflation rate and a 6% lost investment opportunity,
the impact on the estate for that 30 year planning period if the couples self-pays
is $1.4 million. In New York or another high-cost area, the impact would be
Another example, if a 67 year had a 15 year Alzheimer's
claim 15 years from now, using a $150 current cost with a 5% lost investment
opportunity, the impact on the estate would be $9.5 million! (An actual case
from someone who called me after the WSJ interview I did...) You can go through
a demo of the software if you look under Financial Planning Software in our
Products Catalogue and you can actually find it on the Agent Home Page -
third bullet under Product Spotlight.
Hope this helps - if both spouses needed care or if
one has an Alzheimer's claim (average 8 years but could be up to 20), you
can see how one needs several million to consider self-insuring, can't you?
About the time my mother had a
stroke 18 months ago, I got very
interested in long term care. At one of my study group meetings, a
member gave me an article, which was an interview format with you and
written by Glenn Ruffenach. No date, name of newspaper, etc.. It's
most practical article on LTC that I have read. Three questions:
1. Is your book available in bookstores?
2. Can you provide a better copy of this article or of other articles in
which you participated?
3. Are you currently finding GE and UNUM/Provident to be the best
companies or do you prefer other companies?
Thank you very much for your assistance.
Thanks for the great compliment - I love having the most
practical article you've ever read! Go to my website for that article
and additional articles - we'll also fax you the cover article from that 10/22/01
issue of the Wall St. Journal in which Glenn Ruffenach says not planning for
LTC is the #1 mistake investors are making with retirement planning.
My book is available in major bookstores and also on my website (www.ltcconsultants.com),
but mainly I'd love to see you at a training class. I'm only doing three
of my big two-day classes this year - all in Nashville - and one is this week,
June 20-21st. The last one is Oct. 24-25. We'll have 105 attendees
this week from over 30 states, so it's a lot of fun. But all of my info
can also be ordered self-study as you'll see on my website. Or call 800-844-4893
and one of our wonderful customer service representatives would love to help
AND, I'm thrilled to say you can also go to www.ltcuniversity.com and take
my training online for only $169! So lots of choices for you.
I can't recommend specific companies in answer to your last question about
GE and UNUMProvident, but I do publish the oldest policy comparison in the
country that would really help you as you look at companies.
Sure hope to see you at a class!
Can you please guide me towards the information stating that gifted premiums
for LTCI will not count against the gift exclusion?
The section you are referencing is found
in Internal Revenue Code Sec. 2503(e), but the premium is limited to the HIPAA
table for the amount of the LTCI premium. Hope to see you at a class – we
go through this tax information in detail! The schedule and class agenda is on our website and I
will be teaching June 20 & 21 and October 24 & 25th here in Nashville. Just
call our office at 800-844-4893 for more information. Good Luck!
I would like to know if there are any companies that offer a stand alone
Home Health Care Plan with a 10 year paid up option. We have a potential client
wanting this. We have access to a couple of companies that offer the stand
alone home health care, but not with the 10 year paid up option. This is how
she paid her nursing home plan and so she likes paying this way.
This type of information is in our policy
comparison. If you have the software you can pull up the home health category
and the rating/underwriting category and match the stand alone home health
with the limited pay plans. We just released a new one in March 2002 and you
can see information about it on our website at www.ltcconsultants.com.
My UNUM GA is telling me the UNUM Advantage 1 policy is still for sale
and your March 2002 policy comparison indicates that it is no longer sold.
I just checked with the LTCI Director at
UNUM and you are 100% correct. That Advantage 1 policy is still sold and since
UNUM deleted the mental/nervous exclusion from it and the rates are lower than
the Plus plan, it has sold more frequently. I just got bad information that
it’s no longer sold, so I’ll correct it in my next release. So
sorry and thanks for bringing it to my attention. Also, UNUM says there will
be a new product the 1st quarter of 2003 that will replace both existing policies.
The Managing Director from our Harrisburg, PA office has a relationship with
the owners of an "S" Corp that want to purchase LTCI for all of
their top people and their spouses and run the premiums through the company.
I know there are different issues surrounding the "S" and "C" corps
and the deductibility of the LTC premiums, but I don’t know the specifics.
Can you provide any details?
C-corp can deduct 100% of the premiums
for owners and all employees. S-Corp can pay premium for owners (defined as
greater than 2% shareholders) out of the business, but it is added to their
taxable income. The S-Corp owners do get the first-dollar deduction of 70%
of the age-based premium amount from the HIPAA table. Benefits for employees
are tax-free in all situations whether or not the employer pays premium up
to $210 per day or the actual charge; whichever is greater. This is explained
in our consumer brochure, Health Care Reform and Long-Term Care Insurance,
which you are allowed to use (Form #LTC-001C) and we’ve just updated
it for 2002. It makes a terrific handout as a lead generation piece with a
place for the agent’s name on the back. We’ll have the 2002 version
up on the consumer side of our website soon. Right now it’s still the
2001, but the information that answers your question is there if you need to
direct anyone to it. It’s under "LTC Reports" on the consumer