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If you can’t pay your long-term care expenses, then you have a friend in Pennsylvania! Just ask John Pittas, who found out the hard way. His mother, Maryann Pitta, had to undergo rehabilitation treatment with skilled nursing care following a car accident in September, 2007. When she was recovered and released in March 2008, she decided to relocate to Greece having paid only a small portion of the bills she owed from her stay at the care facility. In May at the facility, unable to reach Ms. Pittas, she instituted a filial action suit against Mr. Pittas under state code 23 Pa. C.S.A. Sec. 46, entitled Relatives’ Liability and which read (in part):

1. The following individuals have the responsibility to care for and maintain or financially assist an indigent person, regardless of whether the indigent person is a public charge:

• The spouse of the indigent person.
• A child of the indigent person.
• A parent of the indigent person.

2. Paragraph (1) does not apply in any of the following cases:

• If an individual does not have sufficient financial ability to support the indigent person.
• A child shall not be liable for the support of a parent who abandoned the child, and persisted in the abandonment for a period of ten years during the child’s minority.

After arbitration, a non-jury trial, and an appeal the court held Mr. Pittas responsible for his Mom’s remaining obligation to the health facility to the tune of around $93,000. The case could be a wakeup call of sorts for those with relatives, especially children with parents, who are in need of medical care and think they don’t need to be involved in planning for such contingencies. A few points of fact from the trial are eye-openers:

1. “Indigent” was not defined as just those who are destitute, but as anyone without sufficient means to pay for their own care and maintenance.
2. It did not matter that Mr. Pittas had other siblings who could have shared in the support. If he wanted them to accept some of the responsibility, it was up to Mr. Pittas to join them in the suit. It wasn’t the obligation of the health care facility to pursue them all collectively.
3. It didn’t matter that Ms. Pittas had initiated, but not completed, the application for government support. The health care facility was allowed to take action against Mr. Pittas without seeking resolution of the application for assistance.
4. Mr. Pittas was shown to make around $85,000 a year which was found sufficient to obligate him under the law for his mother’s expenses, but didn’t help in suggesting what might be the lower limit that would exempt a relative from responsibility under the law.

Two-thirds of the states have filial support laws. A useful summary of state-by-state citations can be found on the website of Dickinson School of Law professor, Katherine Pearson at http://law.psu.edu/_file/Pearson/FilialResponsibilityStatutes.pdf. This will assist in demonstrating to a client the need to be involved in planning for the affairs of relatives for whom they may unknowingly be responsible.

Call us for information regarding the steps and the products that are important for avoiding these types of unexpected liabilities that can confront your clients.

It is important to your clients that the long-term care policy they select today will meet their needs tomorrow. Provide your clients the flexibility they need – to choose how they will receive their policy benefits – with a built-in cash benefit offered in Mutual of Omaha’s LTCi policies.

The Two Ways Your Clients Can Receive Policy Benefits

Cash – There’s no elimination period to satisfy. Your clients receive a percentage of the policy’s maximum monthly benefit in cash, which can be used to pay any cost associated with their long-term care expenses.

Reimbursement – After satisfying the policy’s elimination period, your clients are reimbursed for actual long-term care expenses they incur, up to the maximum monthly benefit of the policy.

Concept Advantages

When the need for long-term care first arises, most people rely on the help of family members. Having a policy that offers the option of both cash and reimbursement benefit options provides:

• A cash benefit can be used for anything related to a long-term care need, including services that may not be covered by the policy. This gives your clients and their families the financial ability to explore options for care before deciding what’s best
• A reimbursement benefit allows your clients to access covered long-term care services, knowing they will be reimbursed up to the selected amount each month
• Having the option to switch between cash and reimbursement gives your clients control over how best to spend the benefits of their policy

For more information and assistance with selecting a long-term care policy to meet the needs of each of your clients, contact your LTCi Sales Rep.

While 9 out of 10 advisors don’t feel comfortable discussing the realities of LTCi with their clients, those advisors who do, position themselves to capitalize on their peers’ deficiencies.  The LTC planning process begins with a conversation, a conversation that you initiate with your clients.  The sooner the conversation takes place, the more attractive and wide-ranging the solutions you can use to solve the needs are.

For a young professional, you can use a flexible Asset Based solution which allows for affordable premium payments overtime while retaining flexibility. With a $5k annual premium for a 10 year period, the client secures a guaranteed death benefit, guaranteed cash surrender value, and a tax free million dollar pool of money for Long Term Care purposes by age 81.

Male, 45
Premium Payment	$5,000 x 10 Years
Guaranteed Minimum Death Benefit Year One	$51,000
LTC Pool At Age:	45 $174,000
	65 $460,000
	81 $1,000,000
	85 $1,220,000
Cash Value	40k at Year 10
Death Benefit	100k at Year 10

Your clients have questions – they need direction when it comes to Long Term Care planning. Contact your LTCi Sales & Marketing Manager to discuss alternative Long Term Care strategies.

One thing is certain; when your phone rings and the client WANTS long-term care insurance, it’s often too late to help them with traditional product options. Or, when you get the call asking if you can still get coverage for their mom or dad because they just moved them into a care facility, your heart sinks.

The simple answer “NO” doesn’t express the needed empathy in the situation, so you spend 15 to 20 minutes commiserating, and encouraging them to get their long-term care planning squared away.

Those who have failed to plan with traditional or linked product choices are generally faced with two options:

1. Folks with modest means, intent on controlling the care they receive, must supplement their fixed retirement income by liquidating other assets to pay for care. Two additional complications often raise their ugly heads: there is another call on the retirement income and assets, namely the healthy spouse. Also, liquidating an income-producing asset to pay for care reduces retirement income and may create a tax issue. Talk about adding insult to injury.
2. Wealthy clients may have the income and assets to pay for whatever care they desire. However, an open-ended drain of treasure could negatively impact heirs or other family members the client had hoped to provide a legacy for. In this case it would be helpful to create a wall or stop-loss to protect that inheritance.

One thing both these sets of consumers have in common is the need for leveraged cash flow enhancement. This is a knotty problem indeed; particularly since the horse has already left the barn! The good news is: you may be able to offer solutions to consumers who face the costs of long-term care without insurance (or adequate coverage).

The financial planning instruments I’m about to share with you are not new, but they include innovations designed specifically for those in need of leveraged cash flow enhancement. Before sharing details, it’s important to note that these are not your typical insurance product or sale. In presenting these options, you may be working with the family member(s) who hold the power of attorney for the actual client in need. You also should be mindful of other financial planning or legal professionals in the decision making process; e.g. elder law attorney, stock broker, CPA, etc. Finally, don’t forget the family members who aren’t in the decision-making loop but may be “expectant heirs”. With this landscape a word of caution is in order: don’t be the “Lone Ranger.” Make yourself part of the circle of advisors who are trying to help a client in need.

The first opportunity involves a growing movement by State and Federal governments to provide consumers additional private funding options to pay for care. A number of states have passed enabling legislation to encourage those in need to create Long-Term Care Benefits Plans.

The funding vehicle for these plans are life insurance policies that are converted into life settlements. What makes this different from your garden variety life settlement?

• The converted life insurance policy used to fund the Long-Term Care Benefit Account must be placed in an irrevocable, FDIC-insured account that makes payments directly to the care provider;
• The person must be able to choose the form of care they want;
• A funeral benefit must be preserved: generally, the lesser of 5% of the face amount of the life insurance policy or $5,000 is reserved as a death benefit payable to the estate or beneficiary;
• Any unpaid balance in the account must be paid to the estate or named beneficiary.

According to Conning & Company Research, seniors in the United States own approximately $500 billion of life insurance. Many can’t afford the premiums as they get older, particularly if long-term care expenses begin pressing on them. In fact, when they do stop paying premiums, they received less than 10% of the face value, and 88% of policy holders receive little or no value. Thirty-eight percent (38%) needed to liquidate their life insurance policies to qualify for Medicaid.

Market opportunities to consider include:

• Owners of life policies $50,000+ in danger of lapse or surrender
• Families with immediate need to fund care for a loved one
  • Desire to remain private pay vs. Medicaid
  • Applicants declined for long-term care insurance
  • Parents of clients who have purchased LTCi
• Financial advisors trying to help someone who needs care
• Individuals already in need of care

On another front, Genworth has recently introduced a single premium immediate annuity (SPIA) that is also a new twist on an old idea. IncomeAssurance Immediate Need Annuity has its origins in Great Britain, where underwritten annuities specifically designed for enhanced cash flow based on mortality and morbidity were developed.

The profile for individuals suitable for this product are those previously discussed. They need to maximize their income to pay for care for however long they need it, and not run out money. They can also use IncomeAssurance as a stop-loss to wall off an unknown catastrophic risk.

Individuals aged 70 to 95 who are currently self-funding long-term care expenses by liquidating assets can enhance their cash flow without endangering their entire nest egg. They can also include annual cost-of-living adjustments to the monthly payouts and purchase death benefit options as a hedge against untimely death.

Let’s be clear: there is no substitute for long-term care planning for healthy people in their 50s, 60s or even 70s utilizing traditional or linked insurance products. However, as discussed in previous writings over the past 18 to 24 months, new products and concepts are being created in response to an anemic traditional insurance market and an aging demographic of those who failed to adopt an adequate insurance program. These solutions can help people enhance and safeguard their cash flow when they require care, although they don’t provide the leverage of traditional insurance products.

Agents and advisors, like their clients, cannot run away from the long-term care planning need. You currently have two new options that may answer the age old question, “what do I do now?” when consumers are declined for long-term care insurance or they are already receiving care.

If statistics alone sold Long Term Care insurance policies, industry sales would be growing exponentially year after year. However, clients take in more than just the numbers – their decision-making process doesn’t rely solely on statistics.

In order to ignite desire in a client, an advisor must be able to humanize “the need” through personal stories, experiences, and emotions – something the buyers can connect with while coming to a decision.

The statistics do serve as a reminder of why you need to protect your clients. Know the statistics so you can have facts to support your stories and spark your clients’ interests in purchasing protection.

The pictorial graphics below demonstrate the client’s statistical probability of needing assistance:

Learn to create a desire within your clients to purchase LTCi – contact your LTCi Sales Rep for assistance.

Asset Based LTCi is designed to help protect your clients’ assets by using the safety of whole Life Insurance. With a guaranteed premium, your clients will receive a guaranteed amount of Life Insurance that can be applied to their LTCi expenses. Your premium is also credited with a minimum guaranteed interest rate, meaning your cash value is guaranteed to grow each month. If your clients were to tired of the product, they have the option to request for a full return of your single premium – providing an increased level of flexibility that most clients are looking for.

Help your clients utilize an existing asset – whether that be money set aside in CDs, savings accounts, or other liquid funds – as the funding.

When recommending an Asset Based LTCi product for your clients, you can be confident that:

• Your client’s premiums will never increase
• The amount of death / long-term care benefits are guaranteed
• Their money earns interest with a minimum guaranteed interest rate
• They will never outlive their plan benefits when you select the optional Lifetime Benefit feature

Tax Information:

• LTCi benefits are received income-tax free
• Interest accumulation is tax-deferred
• Life Insurance benefit, if unused for LTCi purposes, is payable on a tax-free basis

Flexible Case Design:

• One policy can cover an individual or joint insured’s – including spouses, partners, siblings, and even parent / siblings
• Funding sources can include: CDs, money market accounts, cash, life insurance cash value, annuities, and qualified assets.
• Typically designed as a single premium, but clients can pay premiums for 1 to 20 years, or even lifetime payments on a guaranteed level basis.

For more information about the many benefits of asset based LTCi, contact us today.

Genworth debuts new medically underwritten immediate annuity.

Too often, I receive a phone call asking about Long Term Care solutions for an individual that failed to put a Long Term Care plan in place when they were still insurable. The client is typically 75+ and is on the verge of needing care immediately.  Typical impairments include:

• Heart attack or Heart Failure
• Stroke
• Chronic Respiratory Disease
• Alzheimer’s or “early” Dementia
• Diabetes
• Cancer

The most unpleasant part of our industry is having to turn away clients ready to purchase any solution because their medical history now prohibits them from coverage.  If a client is unable to make it through the underwriting process we have historically had very few, if any, viable alternative LTCi options. With the launch of Genworth’s new Medically Underwritten Immediate Annuity, the days of having telling your clients you don’t have a solution for them are GONE.

Unlike traditional LTC, this is a solution meant for clients who failed to put a Long Term Care plan in place, and that have current health concerns that prevent them from purchasing a traditionally underwritten product.

The medically underwritten SPIA turns conventional underwriting upside-down by rewarding clients with an unhealthy health history with an increased monthly benefit – arguably the only time in life when all those years of devouring donuts and Mickey D’s pays off in a BIG way!

Contact us today to learn more about an option for those that failed to plan.

For more information about Genworth’s Immediate Need Annuity, download the PDF by clicking the link below.

IncomeAssurance Immediate Need Annuity