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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 HERE. 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 Guide."

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 my company?

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, etc.

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 the media.

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 website.

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 2003.

49: Question:
Is there any research completed on whose buying LTCI, not only by age but by region?

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

48: Question:
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 ages?

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.

47: Question:
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.

46: Question:
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.

45. Question:
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.

44. Question:
Do you know the daily tax-exempt amount for a reimbursement LTC contract for 2003?

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.

43. Question:
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!

42. Question:
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.

41. Question:
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.

40. Question:
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 served.

39. Question:
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.

38. Question:
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.

37. Question:
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!

36. Question:
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 double.

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?

35. Question:
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 the
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 you.

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

34. Question:
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!

33. Question:
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.

32. Question:
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.

31. Question:
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 side (www.ltcconsultants.com).

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