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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”.


28. Question:
First of all, I want to tell you how much I enjoyed the seminar in Nashville. You and your staff did a great job. The main point I got during your talks was "FOLLOW THE PLAN." I am inspired. This leads to my question. Another agent and myself are having some discussion about doing joint LTC seminars. Do you know what the industry standard is for commission splits? We both plan to follow up with the interested prospects. My thinking is that we split each sale, no matter who closes it. I appreciate whatever input you can give me.

Answer:
"Follow the Plan" is certainly the message and pray over every seminar! I agree with your thinking, a 50% split no matter who closes it. It worked for me with the older lady I trained that I told you about. Fifty percent for the first year and renewals is the way we did it. Thanks for writing.


27. Question:
On the flip chart from your recent seminar is the term "Cognitive Reinstatement". Could you explain this term please? Thank you for your help. The seminar was terrific! I have written four contracts since I have returned!

Answer:
Congratulations on the four applications. That’s wonderful! For the answer to your question, please see the bottom of page 83 in my book (in your homework, of course, Chapter Two).


26. Question:
I have used your Long-term care seminar guide. It quotes 8hrs of care for home health care aid to use X the average cost in our area. What does Long-Term Care Insurance claims show the average hours of care for home health care costs? Do you have an article or site I can reference?

Answer:
There's a home health care claimant study done by LifePlans, Inc. that is wonderful. It cites an average of 59 hours a week, 44 of which is paid. This will go up as more people have insurance policies to pay the bill. Here's the link to order the study: http://www.lifeplansinc.com/cstudies/cs_examples.htm

Hope this helps, and we'd love to see you at a class this year - check my web site for dates - you won't want to miss the live band!


25. Question:
Recently I lost 4 lives to an agent who gave an association discount through a buyer's club. The insurer has told me this is acceptable to them. Do they have marbles in their heads? Do they not see the long-term consequences when everyone off the street is offered a discount? My lead-in to business is often the employee referring me to the risk manager. Why will agents want to continue LTC sales when their commissions are decreased on every sale? Lincoln Benefit Life (the involved carrier) said this is perfectly acceptable to them. I am frustrated and concerned that this will become the norm. Any insight would be appreciated. Do you know of how I can contact a buyer's club so I am armed with the same association discount for my clients?

Answer:
I feel for you. Sales are still so low that the insurance companies are doing everything they can to find new distribution. Individual sales were down 8% for policies issued in 2001 over 2000 and the annualized premium was down 5%. (Inforce policies grew 13% and premium grew 15% so good news there and the group market is growing). Go find a new buyers club and get them the discount - I'm sure they haven't all been contacted yet. Or offer to provide personal service for members of a buyers club - there may be room for negotiation with the insurance company and the management of the buyer's club - whether or not there's enough commission in it for you, I don't know. But I see this movement growing, not decreasing, as companies look for ways to get the product in front of the public - i.e. banks, wirehouses, other financial institutions. The key is personal service as always for us agents, and with a market share still under 10%, lots and lots of people out there still not contacted. The buyer's club offering it lends credibility to the purchase, at least.


24. Question:
Please give me further information on the 2002 rule for self employed individuals that indicates that we can deduct 70% of what? Is it the total premium or is it dealing with the 71/2% of AGI or what? I understand that C Corps can deduct the full 100% but I am still confused on other forms of incorporation on what they can actually deduct.

Answer:
The deduction for self-employed is 70% of the age-related amount on the HIPAA table and that is a first-dollar deduction, not subject to the 7 1/2% threshold. The remaining 30% will count as a medical expense toward that threshold if the person should have a lot of medical expenses for that year. Have you been to one of our classes, by any chance? We've done several for Allstate and I could refer you to some of the material from the class. Another place you can look would be on my website under LTC Reports - check the one talks about health care reform and LTC insurance - that's actually available as a consumer brochure that you can use as a lead generator and put your name on the back (Allstate has approved it for your use).


23. Question:
In one of your tapes I am almost certain that you mention a CD Rom that is available that lists all of the businesses and the names of their HR persons (by states). I cannot find that reference or where to purchase it. Can you help me?

Answer:
So glad all the information is helping you that makes me feel really good. The cd I'm referring to is produced by Business Insurance. A very old and respected publication throughout the insurance industry, they publish a book and the cd as well their weekly insurance newspaper. The phone number is 888-446-1422 and website is www.businessinsurance.com.


22. Question:
As a LTC Specialist, I have been asked if I have any thoughts or ideas regarding state level LTC initiatives which might be useful for North Carolina. I have always respected and admired your work and would like to hear if you have an opinion on this.

Answer:
The biggest issue you have is your North Carolina tax credit which only goes through 1/1/2004 and I know there are strong efforts to let it go. All the other states are wanting something and NC is trying to get rid of theirs! As an association, you can't let this happen. The rationale is that Medicaid is eating up so much of the tax revenue (and it's the fastest growing part of all the state budgets)...but getting rid of that credit is going in the WRONG direction!! You want to encourage people not to rely on Medicaid for their LTC, and that's what the tax credit does. Also most states that have something have a education, not a credit, and a credit is best of course. Yours is 15% of the premium for the individual, spouse and any dependent up to $350 for each policy. So do whatever you can to save it.


21. Question:
I attended one of your training classes in 1999. I'm trying to find out if information is available on how many companies have raised LTC premiums on existing customers over the past few years. You suggested staying with companies with assets in the billions of dollars. I wished we had done that. In the past we sold Penn Treaty Policies and they are raising premiums 35% on existing customers who purchased certain LTC policies in the past. I would appreciate any help you can provide on this subject.

Answer:
Here is the info I know, to see a list of rate increases go to:

California Department of Insurance, 2001 Long-Term Care - Rate History www.insurance.ca.gov/SAB/Premium_Surveys/LTC-Rate_Guide2001/history.htm And yes – got to stick with billions, not millions.


20. Question:
Could I "borrow" your help? Need a "creative decision"! Have a potential "C Corp" client for "LTC – Executive/Management Carve Out Plan"... problem is the definition of "Class" without being discriminatory. As an example: in this specific case, he has 3 employees, with the same title at different locations; approximately the same salary and duties; with approximately the same length of service. Yet, he would like to include only one of the 3 employees in this plan. Any ideas / suggestions?

Answer:
Wish I could help you out here, but I don't see a way to discriminate for one person over the other two based on this description. Sounds like they're all in the same class to me! And I checked with a couple of agents who do a lot of group and they felt the same way. Sorry...just write them all!


19. Question:
I've been selling LTCI for approximately 2 years, along with health and life insurance. I'd like to invest more time in the LTCI area and less in the latter areas as soon as I can economically justify it. The following is a key PERSONAL challenge I see in selling more LTCI: More and more financial advisors from the big banks will lock in LTCI sales with clients as part of there overall "financial management packages". For example, last week a couple in their early 60’s, responded to my web site, after seeing my LTCI ad in the newspaper. I followed up by telephone, collected the necessary data from them for quotes, and set an appointment to see them. One day before the appointment, the couple called me to cancel our appointment. It seems that their financial advisor had just received her LTCI license from North Carolina and has mailed a promotional packet from GE. The couple felt obligated to buy LTCI from her, as they believed the advisor would be their best choice as she knew their overall financial situation. To further rub salt in my wound, this advisor happens to be the same person my wife and I use as our financial advisor. In addition, during the past 18 months, my auto insurance agent and my wife's and my bank and the bank where we have our house loan have all entered the LTCI market as agents and/or brokers. I'm thinking, that I should forget the individual market because I think it is "highly overrated" in the first place, in terms of potential sales, and check out the group "Multi-Life" market instead.

Answer:
The group market is sizzling - I applaud your thinking!


18. Question:
I am running across people who are questioning the statistical numbers related to the chance they will ever need LTC. Some type of data I can provide the client would be extremely helpful.

Answer:
According to a 1996 report authored by Marc Cohen with LifePlans, Inc. for the Health Insurance Association of America (HIAA), the general population is most likely to perceive this risk to be very low less than 25 percent, but the real risk is greater than 50%. He confirmed the statistic with me in January, 2002. The publication you will want to have on hand for clients who wish to see the original source for this information is HIAA's study entitled, "Who Buys Long-Term Care Insurance? 1994-95 Profiles and Innovations In A Dynamic Market". You can obtain a copy of this and other helpful studies by visiting HIAA's web site, www.hiaa.org.


17. Question:
I've been asked a question regarding immediate annuities that I was hoping you might be able to answer. If a single person, living in an Assisted Living facility, opens an immediate annuity with 10 year certain, then needs nursing home care:

1. Is the $1200 per month income counted when applying for Medicaid?

2. If the person passes away before the 10 year period, is the monthly revenue automatically passed on to the appointed beneficiary?

3. What role if any does the 36 month look period have on an immediate annuity and the beneficiary?

Answer:
If the immediate annuity is purchased or if a deferred annuity is annuitized within 36 months prior to the Medicaid application, here's what happens: Medicaid compares the amount of the annuity with life expectancy, and any projected payout that exceeds life expectancy is treated as a transfer of assets and will result in a penalty period. (pages 139-140 in my 2001 book, Long-Term Care: Your Financial Planning Guide). So as long as the annuity is actuarially sound, you're ok. The income from it ($1200 in your example) does count toward the income qualification for Medicaid. If the person dies within the 10-year certain, most states allow the money to pass on to a beneficiary. A few states require the state to be the beneficiary, so it's worth a call to an elder law attorney in the state to check that out. NJ, TX and WA to my knowledge have something like this. An attorney, Dale Krause, does national Medicaid Planning (only in crisis situations –otherwise he recommends LTC insurance) and is my source. He is at www.medicaidannuity.com.


16. Question:
Could you tell me what the tax deduction rules are for family limited partnerships and limited liability corporations for 2002 in the purchase of LTCI?

Answer:
If you'll go to the report on my web site (www.ltcconsultants.com) that explains the tax incentives, you'll have your answer. Here's the link: http://www.ltcconsultants.com/ltcreports/Reform/hcreform/hcreform.html. You might also want to hit the 2002 update that is on the home page to get all the 2002 numbers. We go through the tax incentives thoroughly in our live training classes (schedule on the web site) and if you can't make one, we have a $15 audio tape on legislation that goes through it in detail as well.


15. Question:
Are LTCI policies handled the same as major medical if the carrier goes out of business? I'm specifically interested in Florida, Illinois, New York, Indiana and Wisconsin.

Answer:
If a carrier goes out of business, the state guaranty fund will pay claims up to the date of insolvency, but not beyond. So this means someone would have to be on claim when the company goes out of business to get anything and then only up to the date of insolvency.


14. Question:
With the announcement of G.E. Capital and Suze Orman's customized "Suze's Choice" LTCI product, along with a cadre of 100 select agents who will serve the inquiries and sales efforts, what effect do you personally feel this approach will have on the rest of us in our efforts to market LTCI? With her celebrity status and QVC cable appearances as well as other approaches, she will reach millions of people. I realize that distribution and reaching the "boomer" market is vital and that this is a brilliant marketing opportunity created that will help so many, but just wanted to ask you what your feelings are.

Answer:
I think Suze's efforts will only spread awareness, wake people up, and get more people thinking. Most people at this point would still rather deal with a face-to-face agent (that won't always be true) so many will talk to Suze's people and buy from a local agent. Many people won't like being shown only one company. So I think her presence will only help the entire market. I'm not in agreement with her position about telling people to wait until they're older to buy, so I combat that whenever I can. But she does believe in the insurance and I hope she gets a lot of people to buy it. She has only my best wishes. But I don't see her as a threat to the LTCI specialist like you with your solid background and local reputation in your area.


13. Question:
Apparently there have been some articles as well as some agents talking about the virtues of putting all your money in an immediate annuity (and keeping it) and qualifying for Medicaid.

Answer:
Deferred annuities count as assets but an immediate annuity counts as income. As long as the immediate annuity is actuarially sound, this is a strategy for Medicaid planning, which means - the projected payout has to be within the person's life expectancy. Any projected payout which exceeds life expectancy is a transfer of assets and will trigger a penalty period if it occurs within the look back period. The income from the annuity does count as income and goes to the nursing home as other income would. Now, the drawbacks are ...Medicaid! Lack of choice. Forget meaningful home care. Forget the beautiful assisted living facilities. Forget keeping dignity and choice. And North Carolina's Medicaid program is in desperate straits so agents who do that are destroying Medicaid for the state and doing a horrible disservice to their clients. Also, if NC decided to do so, the beneficiary of such an annuity could be subjected to a payback letter after the annuitant's death asking for the money to be paid back as part of the Medicaid estate recovery requirement. A few states require the beneficiary to be the state for this very reason.


12. Question:
I was just inquiring about your seminars and I realize you are not promoting LTC companies, but am curious as to what LTC companies you represent and why?

Answer:
I'm a third party trainer so I don't promote one company over another, but I am very big on huge companies with high ratings and billions, not millions, in assets. The hardest thing I do is publish a policy comparison - it's the oldest one in the country and now has almost 40 companies and 210 policies. Many agents find it extremely valuable because I do it myself and put info in it that I know you need to know as an agent. For example, on a limited pay policy, does the company reserve the right to implement a class rate increase after the limited pay period has been met? You can check that out on our web site or just call us at 800-844-4893 and we'll be glad to tell you more about it. You'd also benefit from coming to one of our classes this year because the networking is so terrific. Since agents come from over 30 states, they share information as they don't see each other so much as competitors, so it's a great place to hear about which companies are great to work with. Plus we have a wonderful reception on the first night (family members invited of course) with a LIVE BAND (my favorite part!) We can send you a seminar brochure and tell you all about it - and we are including the hard copy of the policy comparison for all attendees this year as a reward for coming to a live class.


11. Question:
If I attend your seminar, will I have a designation of some kind? I remember in the past you were offering seminars that resulted in the equivalent of a "CLU" for long-term care planning - is this still viable and available?

Answer:
No designation for coming to one of our seminars this year - you just learn to sell long-term care insurance very successfully! We did the classes last year for the CLTC designation and while we're no longer doing those, we still think it's a great designation. Just go to the CLTC web site and you can get the 2002 schedule (www.ltc-cltc.com). We are giving a copy of our March 2002 policy comparison away in all of our 2002 training seminars this year - $99 when purchased separately. You'll also get CE credits for your state plus another $150 of sales and training materials...not to mention a live band at the reception (my favorite part).


10. Question:
Do you have the 2002 tax deductibility tables for long-term care based on individual, self -employed, corporations?

Answer:
You can go to the reports section of my web site and pick up the Health Care Reform and Long-Term Care Insurance, which is a consumer brochure that I put out on tax deductibility. You can order it and put your name on the back. We will cover all this in detail at our first training meeting this year on April 11, 12 at which we will distribute print information and an audio tape will be subsequently produced as well. All my print pieces are in the update stage right now - the annual update around here is a very big deal, but you're right, very few organizations do a complete update every year. I'd love to see you at the class - call us at 800-844-4893 for all the registration info and you can also see more info about it on our website. For something quick, you could order the legislation audio tape for $15 from 2001 - nothing has changed about the way it all works and with the page from the home page of our website you have all the 2002 numbers, so you can certainly gain an understanding of how it all works (individual, C-corps, S-corps, LLCs, partnerships, sole proprietors) plus medical savings accounts. I also have the tax information in the first chapter of my book (in major bookstores or on my website), including an example of itemizing and taking the LTCI deduction vs. taking the regular deduction and not itemizing for a couple in their 70's that's quite interesting. The book is Long-Term Care: Your Financial Planning Guide – go to my website and click on the home page where it says "WSJ Readers, click here" and it will take you right to the page.


9. Question:
I have a client who was receiving Medicaid benefits for a 10-year period while living in her residence. After the 10 years, she sold her home. Will Medicaid look back and collect on the capital gains she received from the sale of her home?

Answer:
It sounds like your client was on Medicaid for her health care not for long-term care because I'd be greatly surprised to know Medicaid provided home health benefit for that duration. The look back period is tied into a person's application for Medicaid to pay for long-term care so if she applies for Medicaid after selling her home, Medicaid will look back 36 months from the date of application. If the sale is within that period, Medicaid will refuse to pay for a period of time equal to the money she received for the house (total, not just the gain) divided by the figure Medicaid uses for the cost of care in your state. That is known as the penalty period. I think what you may be thinking about is estate recovery, which says that Medicaid has a right to recover from her estate the amount that Medicaid paid on health care during the person's lifetime. So if that money is in her estate when she dies, I believe Medicaid will have a legitimate claim. This depends heavily on how aggressive the Medicaid department is in your state for estate recovery and I don't know which state you live in. Your best bet at this point is to refer her to an elder law attorney. If you don't know one, you can go to the website for the National Academy of Elder Law Attorneys and see a list for your state, and even your zip code. Pick
Ask him to talk about Medicaid in your state and the impact LTC is having on Medicaid. Then have him talk about how LTC insurance can lessen that impact. And I'm sure you're doing the consumer seminar after he speaks - that is what makes it work. (See pp 21-59 in the Instruction Manual)


8. Question:
Please explain the IRS ruling that will allow a C corp to pay the LTC premium for a highly paid employee, deduct the premium as a business expense and then not have any of the premium show up on the employees W2 form?

Answer:
If you have a Tax Facts book, it's very easy to check. Basically, HIPAA (7702B) said that LTC insurance is treated like accident and health insurance, so just like health insurance, a C-corp can pay the premium and it's deductible 100% as a business expense and it isn't income to the employee. As far as the highly paid part, the insurance companies have taken the stance that since the discrimination issue isn't addressed, that it is ok to discriminate.


7. Question:
I have been "out of the loop" on long term care, as an agent, for 1 and 1/2 years. Yesterday, a former client of mine called me. She has Pioneer Life for LTC, but she received a letter from LTC/HHC Settlement out of Excelsior, Minnesota. In the letter, it mentioned that there is a possible class action lawsuit against various LTC insurance companies. My former client wants to know if this is of any concern to her. What is this lawsuit about and what, in your opinion, should I tell her. She wants to mail the return info by this Friday - February 1, 2002.

Answer:
Please visit: http://www.ltchhcsettlementagreement.com/ for more information about this issue.

CONSECO PRESS RELEASE
(Settlement of class-action litigation regarding long-term care, home health care and nursing home care policies)


6. Question:
I am writing about Medicaid friendly or qualified annuities. We have an elder care attorney in our area who says your seminar info is outdated and simply not accurate. Does annuity have to be a spia? Is income from annuity countable by Medicaid? Specific case: A widow born 9/5/12 resident of MI just admitted to nursing home and most likely will never leave. Attorney recommended putting 100,000 of her 125,000 assets into annuity. This way becoming immediately eligible for Medicaid.

Answer:
Here's how it works. The annuity (SPIA) has to be actuarially sound, which means Medicaid compares the amount put in the annuity with her life expectancy. As long as there is a reasonable expectation she will get it all back within her life expectancy, no problem. The life expectancy for an 89 year old on the Medicaid table is 5.05 years. So how will the $100,000 work for that? If she qualifies for Medicaid, the income from the annuity will go to the nursing home just like her other income will except for the few allowances that she is entitled to keep. However, any projected payout that exceeds her life expectancy will count as a transfer of assets and will trigger a penalty period during which Medicaid won't pay. So you can see that if it is a term certain, the term can't exceed her life expectancy, right? If it's actuarially sound, it can be done, but the big picture is, who in his or her right mind wants to PLAN to get on Medicaid with all the horrible choices that implies? No assisted living, home care, no private room in the nursing home, and it makes the nursing home first resort instead of last resort. Medicaid should be a last resort program when other options have been exhausted. In this example, it sounds like this is her last resort. I would advise you to hook up with a Medicaid supervisor if you can. Have you been to one of our classes yet? We have one in Nashville on April 11-12th - band, reception and LOTS OF FUN!!


5. Question:
In your 1999 book you listed that there were 118 LTC companies selling insurance in the US. How many are/and were selling LTC insurance in 2000 & 2001.

Answer:
I haven't seen anything recently on this, but my guess is somewhere around the 125 mark and many are regional or BCBS plans.


4. Question:
Another agent on his web site is recommending the "return of premium rider" as a selling tool to secure asset protection. He said the family would receive the premiums paid tax free to the family at the client's death. My boss asked why I wasn't using this. I told him it wasn't covered at the training and I wasn't familiar with the rider. Can you enlighten me?

Answer:
We lightly touched on it - look in the legislation section we covered in the teal agent folder under the tax incentives. The bullet about, "can a corporation pay the premium of a single pay policy and deduct it in one year." It says see a tax advisor! Then I verbally said agents are selling a full return of premium, regardless of claims, under the arrangement that the company pays the premium, the premium is not counted as income to the employee, the benefits are tax-free to the employee, and the premiums go tax-free to beneficiaries, regardless of claims. I can't find this situation addressed specifically in the IRC regarding LTC insurance, so I decided to back out of the discussion. Because it's not addressed specifically, it's being done. So, the answer is that you should go over it with the tax advisor used by your firm before you proceed. Some tax advisors say a ten-pay is a more conservative approach and may not be as likely to raise a red flag with the IRS.


3. Question:
I believe you told us in our CLTC class that we had your permission to reprint (use for handouts) information or personal interest stories contained in your book Long Term Care - Your Financial Planning Guide, provided we gave proper credits to the source. The purpose of this email is to confirm that this is O.K. If it is O. K., then is it also O. K. to use copies of the reports on your web site? They are EXCELLENT for making the point with people as to why they need this valuable protection. Of course I can refer people to your web site to do the reading, but we all know, for various reasons, they won't do this. I would like to be able to include these in the handout materials I provide at group meetings. AND OF COURSE, I will give proper credit to the source. I have attended other classes of yours and I do have your marketing programs. I would very much like to use some of these pieces in a joint city/school employee group offering that I am doing.

Answer:
Thanks so much for checking with me. What I said in class was you have my permission to use any of my articles but I can see I have to be more careful when I make that statement. I meant the articles I have published in magazines. No, you can't just take excerpts from my book, because that would be copyright infringement and wouldn't be fair to my publisher. The books are available in bulk for only $7 each instead of the $16.00 price for just one. The reports on the consumer side of my web site are the three brochures which you have in my marketing system with the blank place on the back for you to put your identifying information, and those are only 24 cents each ($12.00 per pack of 50). However, it sounds like you are presenting to a group, and I just spent 8 months completely revising my worksite marketing system. I used a professional agency for the design work and there are beautiful brochures, posters, etc. for the employee education, not to mention all the "how-to" stuff from agents who are getting 20-30% enrollment in voluntary plans with no employee contribution! I'm copying Lori Odom, our Sales Manager, to help you with the items you need, these are the things that keep me in business and I create them just for the purposes you outlined. Thanks so much and I wish you the best with all your LTCI sales efforts!


2. Question:
I have a sole proprietor that would like to purchase a single premium LTC policy for he and his spouse. In order to close this case, he wants to be as certain as he can that the premium will be at least 50% deductible to him in this calendar year, just like health insurance is treated for self employed people. We need to provide him with some reasonable basis for taking this deduction so his CPA will sign off on the return for the year. Can you help me?

Answer:
Sorry to disappoint you, but the 60% self-employed deduction is based on the portion of premium allowable by the HIPAA table. Below is information that relates to HIPAA, along with a paragraph about potential deductibility if a C-Corp. pays a single premium for an employee:

"A portion of long-term care insurance premium based on the age of the policyholder now counts as a medical expense. Since medical expenses in excess of 7 1/2 percent are tax deductible, this means that a portion of your long-term care insurance premium will help you reach that threshold and may even put you over it to receive a tax deduction. (In 1997, the average deduction for medical expenses for people with AGI in the $20,000 to $30,000 range was $4,500. See a list of IRS eligible medical expenses in the IRS Publication 17, Table 23-1 - Medical and Dental Checklist.) Here are the amounts that count for *2000, and they are allowed to increase each year based on the Medical Consumer Price Index:

Attained age before the close of the taxable year Amount that counts as an allowable medical expense

40 and younger

$220

41 – 50

$410

51 – 60

$820

61 – 70

$2,200

70 and older

$2,750

*2001 amounts can be found on our page: 2001 LTC Deductions

Employers will receive a tax deduction for any portion of long-term care insurance premiums paid for employees. (Important: Employers who are considered self-employed, such as sole proprietors, partnerships, greater than 2 percent shareholders of S-Corporations or Limited Liability Corporations, may deduct only LTC premium paid for employees. If the business pays the self-employed owner’s premium, the premium is taxable income to the self-employed owner, and is deductible only in the form of salary.) 100% of LTC premium contributions are tax deductible to a C-Corporation on behalf of all employees, regardless of ownership in the company."


1. Question:
You point out that the chances of needing nursing home care or home care is 50%. And there are other commonly used statistics to the effect that 40 - 50 % of people 65 years old will spend some time in a nursing home and that 10% of patients in nursing homes have been there more than 5 years. However, many patients spend only a short time in a nursing home. I have not seen a statistic on the proportion of the general population, say those who reach age 60 or 65, who spend more than 5 years in a nursing home. Do you have that number? In other words, since many LTC policies are for periods of 4 to 6 years or life, what are the odds that a healthy 60 year old will need more than 5 years of nursing home care?

Answer:
See the National Nursing Home Study, 1995. Or, if you have my book, Long-Term Care: Your Financial Planning Guide, this info is in the first chapter. Even better, if you have been to an LTC Consultants’ seminar this year, the distribution is shown in the handout materials, pages 1 and 2. Just remember - the nursing home studies are only a tiny part of the picture because less than 15% of LTC happens in a nursing home. So don’t focus mainly on nursing homes, okay?

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