Should You Purchase Long-Term-Care Insurance?

Costs of long-term care are rising, and more seniors are finding themselves in positions where such care appears necessary or desirable. But is Long-Term-Care Insurance a reasonable and viable way of dealing with this problem? A recent article in the Wall Street Journal weighs the pros and cons of purchasing long-term care insurance. The article pits the arguments of George Mason University professor Mark Meiners against those of California Advocates for Nursing Home Reform senior staff attorney Prescott Cole.

While the two consider similar evidence to arrive at diverging opinions, they agree on certain important facts about long-term-care insurance. For one, both Meiners and Cole agree that the decision about whether to purchase long-term care insurance is most pressing to individuals with “mid-wealth” or mid-level savings - people who may identify with the middle-class income bracket. With more than $2000 of savings, these individuals do not qualify for Medicaid, but at the same time are not capable of financing their own long-term care using savings.

The two experts also agree that regardless of whether or not someone purchases long-term-care insurance, he or she should have additional savings set aside for the purpose of long-term care. This is because few, if any, long-term care policies offer 100% coverage of daily care in nursing homes. Even if you are covered under a long-term-care insurance policy, you will most likely have to pay a portion of the nursing home bills. This is especially significant given the “90-day rule” or policy that most insurance packages offer. Given that many long-term-care insurance policies do not kick in until after the insured has spent 90 days in a nursing home facility, individuals wind up bearing the financial responsibility for any stay under 90 days.

Prescott Cole points out that this 90-day rule, paired with the statistic that 67% to 70% of seniors who enter nursing homes leave before 90 days, means that regardless of whether or not a senior has long-term-care insurance, they will probably have to pay out-of-pocket for their stay at a nursing home. Cole applies this instance to a more general argument against long-term-care insurance: the cost (typically $3,500 per year) is extremely high, while the benefits are low. In addition, Cole argues that the risk associated with long-term-care is low; today, only 3.7% of seniors are currently living in nursing homes. As an alternative to long-term insurance, Cole suggests that a person might begin early on to set aside the amount he or she would otherwise pay for long-term insurance into savings specifically for that purpose. That way, the individual would have a sizeable fund on which to draw should the need for long-term care arise.

Meiners counters that this proposed method could be risky if the cost of long-term-care eventually exceeds the amount of savings. Yet, Meiner also acknowledges that even with long-term insurance coverage, an individual may outlive or outspend that coverage, thereby acknowledging that not even a long-term insurance plan is an entirely safe bet.

An added consideration – especially to seniors considering long-term care insurance – is that of insurance scams and fraud. If you suspect that you or a loved one has been the victim of long-term care insurance fraud in California, contact the Evans Law Firm for a free and confidential consultation at 415-441-8669 or 1-888-50EVANS (3-8264). Or contact the Evans Law Firm by email at info@evanslaw.com

California Agent Arrested on Charges of Financial Elder Abuse

Life Health Pro

 Recently, a life insurance salesperson in Los Angeles was arrested on charges of fraud and elder abuse. This incident highlights the unfortunate prevalence of financial crime and abuses targeting seniors today. The best way to avoid long-term scams and fraud is to stay informed and do your research whenever buying or looking into long-term care or insurance. Depending on your financial bracket, it may be prudent to attempt to get Medi-Cal coverage rather than purchase a new insurance policy.

Two resources that are helpful regarding the quality and legitimacy of insurance companies in California are the California Department of Insurance and the California Partnership for Long-Term Care.

Make sure you are aware of the exact benefits you do and do not receive from every potential policy, and compare policies and prices before you select one. Similarly, be aware of the restrictions of each policy. Do not buy duplicate policies.

If you do decide to purchase a policy, fill out your own application to ensure the accuracy of all the information in it, and follow-up regularly to make sure you continue to receive updates regarding the status of your policy. Always pay your premiums by check or debit card, and make the checks payable to the insurance company instead of the individual agent. Keep track of all your documents and payments related to the policy, and avoid pressure to “upgrade” your policy once you have decided upon it.

Finally, if you suspect a scam or fraudulent behavior, contact the Department of Insurance to report it immediately. To report fraud in California, call 1-800-927-HELP.

In Los Angeles, California, life insurance agent Frank Conlon was arrested on charges of financial elder abuse. According to the California Department of Insurance (CDI), Conlon was charged with two felonies: defrauding seniors and embezzlement of funds over $1 million. Among the California Penal Code statutes he allegedly violated were those of elder abuse, grand theft, and fraud.

The CDI report and investigation shows that while working as a life insurance agent, Conlon allegedly diverted significant sums of premium funds from seniors who believed he was investing their money in life insurance and annuities purchases. Between September 2011 and the date of his arrest in spring 2012, Conlon allegedly embezzled over $1 million worth of funds from his clients, many of whom were unassuming senior citizens.

In addition, Conlon allegedly intentionally misled his clients with false documents from purported insurance companies, in order to make his clients believe that their money was sent to the insurance company.

Two victims who were Conlon’s clients, 82 and 86 years old, had entrusted funds to Conlon to purchase life insurance and annuities on their behalf. These victims ended up losing money that had been a substantial portion of their retirement funds. According to the CDI, Conlon diverted these funds and used them for his personal purposes, while the elderly victims were led to believe that their money was being invested in life insurance.

These two elderly citizens represent a small portion of elderly victims of financial abuse. It is all too often that we see insurance companies and agents take advantage of the vulnerabilities of old age. The arrest of Frank Conlon is a step in the right direction for elder abuse prevention in California and the rest of the country. Lawmakers, law officials, and citizens must be vigilant in avenging, but also in preventing elder financial abuse.

If you believe that you or a loved one has been the victim of financial elder abuse in California, contact the Evans Law Firm for a free and confidential consultation with a California lawyer at today at 415-441-8669 or toll-free at 888-50-EVANS. Or contact us by email at info@evanslaw.com .

This article is timely and very relevant for the thousands of senior citizens that are victimized every day by insurance companies and their agents. If you are an senior citizen and someone is attempting to sell you a financial or insurance product, including annuities, long term care insurance or a reverse mortgage (to name only a few of the problematic financial products), I recommend that you do the following:

1) take your time and thoroughly investigate what you are purchasing, there should be no rush. If the agent is claiming that it needs to be done quickly, that’s a red flag

2) inform your family and friends and get their independent advice

3) do an internet search to see if there have been lawsuits brought against the company or other public grievances

4) find out if the person visiting your house is an insurance agent, if he/she is and they didn’t give you written notice 24 hours before visiting you that discloses they are an insurance agent their actions violate Calfornia law

5) look the agent or company up on your state Department of Insurance’s website, in California go to http://www.insurance.ca.gov/license-status/

The above are just a few steps you can take to protect yourself from elder financial abuse.

See the full story here:  CNN Money Article

What to look out for with Long Term Care Insurance

By Ingrid Evans, Attorney

The Evans Law Firm, www.evanslaw.com

For more information or to speak to an attorney, please contact info@evanslaw.com or call us toll free 888.503.8267 for a free and confidential consultation.

LONG-TERM CARE INSURANCE

Unscrupulous Agents Target Seniors for Improper Long-Term Care

Be careful of long-term facilities that do not meet your needs or are misrepresented. 

Insurers Raising Rates for Long Term Care Insurance So That It Becomes Cost Prohibitive and You are Forced to Lapse

Also, be careful of long term care insurance companies that are raising rates it cost prohibitive for you to continue owning a particular policy. 

Long-Term Care - What YOU Can do to Protect Yourself

There are a number of things you can do to protect yourself from fraud when selling your life insurance policy.

• Do Some Long Term Care Research
• Ask the financial professionals involved in your long term care policy about how long-term care works and how your settlement will help you. Make sure the policy is consistent with what the agent says. If the policy does not say it, then it does not exist and it will not help you.
• Ask for long term care consumer brochures.
• Ask the financial professionals involved in your long term care policy what their commissions will be.
• Consult an attorney if there is anything that seems suspicious or if your rates have been increased significantly, www.evanslaw.com or info@evanslaw.com
• Consult websites and resources related to senior financial planning to learn about long term care.
• Discuss your options with an independent financial planner.
• Always have a close friend or family member to consult with when making decision concerning financial products like life insurance. Most importantly, have a reputable financial planner review your long-term care policy to see if it is appropriate for you.
• Check Your Long-Term Care Insurance Agent's Credentials - Some resources you can use to research the broker:
  • State Departments of Insurance such as the California Department of Insurance
  • The internet - use any major search engine such as Google or Yahoo!

Watch out for life insurance agents who use phony certifications that misrepresent their actual qualifications. Sometimes more subtle tactics are used, but real scare tactics are effectively used because they motivate many seniors to buy coverage.

Long-term care policies pay the cost of the day-in, day-out care for a person with an acute or long-term illness or disability. Many seniors receive this care in nursing homes, but more effective and less expensive care at home and at adult day-care centers is growing in popularity, because it is less expensive and still provides the security of a longstanding home. That is the theory, but in practice long-term care policies are often riddled with loopholes that do not adequately protect a senior's life savings. Some policies have such strict disability criteria that many policyholders who need help do not qualify for benefits. Add to this cauldron of conflict the insurance company's sales commission structure. Insurance agents are loath to disclose policy pitfalls when it means risking the loss of a commission equal to life insurance commissions of 30 percent to 65 percent of the first year's premium, far more than the typical 10 percent commission many auto insurance agents earn.

Helpful Hits to Consider Before Purchasing a Long-Term Care Policy

• Always check with several companies and agents
  It is wise to contact several companies (and agents) before you buy. Be sure to compare benefits, the types of facilities you have to be in to receive coverage, the limitations of coverage, the exclusions, and, of course, the premiums.
• Take your time and compare outlines of coverage
  Never let anyone pressure or scare you into making a quick decision. Do not buy a policy the first time an agent comes calling. Ask the agent to give you an outline of coverage. The outline of coverage summarizes the policy's benefits and highlights important features. Compare outlines of coverage for several policies.
  • Understand the policies
  • What qualifies you for benefits? Some insurers say you must be unable to perform a specific number of the following activities of daily living: eating, walking, getting from bed to a chair, dressing, bathing, using a toilet and remaining continent.
  • What type of care is covered? Does the policy cover nursing home care? What about coverage for assisted living facilities that provide less client care than a nursing home? If you want to stay in your home, will it pay for care provided by visiting nurses and therapists? What about help with food preparation and housecleaning?
  • What will the benefit amount be? Most plans are written to provide a specific dollar benefit per day. The benefit for home care is usually about half the nursing home benefit. But some policies pay the same for both forms of care. Other plans pay only for your actual expenses.
  • What is the benefit period? It is possible to get a policy with lifetime benefits but this can be very expensive. Other options for coverage are from one to six years. The average nursing home stay is about two and a half years.
  • Is the benefit adjusted for inflation? If you buy a policy prior to age 60, you face the risk that a fixed daily benefit will not be enough by the time you need it.
  • Is there a waiting period before benefits begin? A 20 to 100 day period is not unusual.
• Do not be misled by advertising or endorsements by celebrities
  Most of these people are professional actors who are paid to advertise. They are not insurance experts.
• Accurately disclosing your medical history is extremely important
  Make sure you fill out the application completely and accurately. If an agent fills out the application for you, do not sign it unless you have read it and made sure that all of the medical information is correct. If information about the state of your health is misstated, incomplete, or wrong, the company will refuse to pay your claims and cancel your policy. For that reason you should always fully and completely explain the full extent of your medical condition.
• If you are unsure about any particular item be sure to state - Do not recall
  And as a catch-all to protect yourself, always refer the carrier to your doctors' records of the care provided to you and list the names and address of your doctors.
• Pay premiums automatically
  It may be a good idea to have premiums automatically deducted from your bank account and paid electronically by your bank. Should an illness delay or prevent paying your statements on time, your coverage will not lapse.

Keep the policy in a convenient place where you or anyone else can readily find it, and tell a trusted friend or relative where it is.

If you believe you have been a victim, consult an attorney.

For more information or to speak to an attorney, please contact info@evanslaw.com or call us toll free 888.503.8267 for a free and confidential consultation.

About The Evans Law Firm

The Evans Law Firm is a plaintiffs’ firm concentrating on elder abuse (physical and financial), consumer fraud class actions involving, particularly insurance and banking claims,  consumer product liability and personal injury/wrongful death cases, particularly asbestos-mesothelioma, pharmaceutical product liability, negligence personal injury claims, as well as qui tam (whistleblower/false claims) and employment discrimination litigation.

\WWW.EVANSLAW.COM

© 2011 The Evans Law Firm.  

 

- What to look out for with Life Settlements/Stranger Owned Life Insurance?

By Ingrid Evans, Attorney

The Evans Law Firm, www.evanslaw.com

For more information or to speak to an attorney, please contact info@evanslaw.com or call us toll free 888.503.8267 for a free and confidential consultation.

 

LIFE SETTLEMENTS

Life Settlements - What to Look Out For

Life settlements are HIGHLY complex financial transactions that have serious consequences for your financial welfare.

Here are some things to consider:

• Are you really getting the best deal for selling your life insurance policy? With a life settlement, you are selling your life insurance policy to someone else. If you are considering a life settlement, be sure to ask the financial professional(s) handling your settlement to share with you the details of all offers made for your life insurance policy.
• Some questions you should ask before entering into a life settlement:
  • How Many Offers Have Investors Made for My Life Policy? Often in life settlements, multiple investors will make offers for your policy. Sometimes, though, the financial professionals handling life settlements will not share all the details of those offers with the selling policyholder. It is your life insurance policy, and you are entitled to the best price for it - so be sure to ask your insurance agent to tell you about any and all offers investors have made for your policy.
  • How much money are others making off of my life settlement? Insurance regulators in a number of states have investigated insurance agents and life settlement brokers for allegedly skimming secret commission payments when seniors sell their life insurance policies. In a typical life settlement transaction, broker and agent commissions will be subtracted from the gross offer an investor makes for your life insurance policy. If you are selling your life insurance policy, you should ask those involved in your settlement to tell you what commission payments they are receiving. Always check to see if that credential is valid and matches that agent's expertise.
  • Like insurance agents, watch out for life settlement specialists who use phony certifications that misrepresent their actual qualifications. Sometimes more subtle tactics are used, but real scare tactics are effectively used because they motivate many seniors to buy coverage.
• Some designations you should look out for:
  • Certified Senior Advisor (CSA) - earned through three and a half-day course, where no college degree or prior financial experience is required.
  • Certified Retirement Financial Advisor (CRFA) - earned through a four-day in-person or self-study course. College degree or prior financial experience is required.
  • Certified Senior Consultant (CRC) - earned through a thirty-hour self-study course. An undergraduate degree and one year of experience in financial service is required.
• Compare:
  • Certified Financial Planner (CFP) - A master of 89 topics in integrated financial planning. At a minimum, in order to earn this designation, an undergraduate degree is required, plus course training in the above topics, as well as passage of a ten-hour multiple choice exam.

Life Settlements - What YOU Can Do to Protect Yourself

There are a number of things you can do to protect yourself from fraud when selling your life insurance policy.

• Do Some Life Settlement Research
• Ask the financial professionals involved in your settlement about how life settlements work and how your settlement will help you.
• Ask for life settlement consumer brochures.
• Ask how much investors are willing to pay for your policy and who those investors are.
• Ask the financial professional involved in your settlement what their relationships are with the investor(s) buying your policy.
• Consult websites and resources related to senior financial planning to learn about life settlements.
• Discuss your options with an independent financial planner.
• Always have a close friend or family member to consult with when making decisions concerning financial products like life insurance. Most importantly, have a reputable financial planner review your life settlement to see if it is appropriate for you.
• Check Your Life Settlement Broker's Credentials - some resources you can use to research the broker:
  • State Departments of Insurance such as the California Department of Insurance
  • Life Insurance Settlement Associations (LISA) 
  • The internet - use any major search engine such as Google or Yahoo!

If you believe you have been a victim, consult an attorney.

For more information or to speak to an attorney, please contact info@evanslaw.com or call us toll free 888.503.8267 for a free and confidential consultation.

About The Evans Law Firm

The Evans Law Firm is a plaintiffs’ firm concentrating on elder abuse (physical and financial), consumer fraud class actions involving, particularly insurance and banking claims,  consumer product liability and personal injury/wrongful death cases, particularly asbestos-mesothelioma, pharmaceutical product liability, negligence personal injury claims, as well as qui tam (whistleblower/false claims) and employment discrimination litigation.

WWW.EVANSLAW.COM

© 2011 The Evans Law Firm.  

 

ANNUITIES - WHAT TO BE AWARE OF?

By Ingrid Evans, Attorney

The Evans Law Firm, www.evanslaw.com

For more information or to speak to an attorney, please contact info@evanslaw.com or call us toll free 888.503.8267 for a free and confidential consultation.

ANNUITIES - WHAT TO BE AWARE OF?

Deferred Annuities - What YOU Should Look Out For

Have you ever had the following happen to you?

• Attended a free-lunch seminar involving retirement planning?

• Met someone who offered you free estate planning advice, or offered estate planning services or a living trust for a very small price?

• Met someone who offered you a reverse mortgage?

• Met someone who offered to move your risky investments into a safer financial product?

• Met someone who introduced themselves as a Certified Senior Advisor or an expert in senior financial planning?

• Had an insurance agent visit your home?

These are some of the schemes used by insurance agents/companies to market and sell financial products known as deferred annuities. While agents often talk about the benefits of deferred annuities, you should be aware of their disadvantages.

Deferred annuities

are long-term products that tie up your assets and may even take money from you or your heirs if you pass on before the product matures. Some examples of their disadvantages include:

• Surrender Charges

  - Penalties that apply when you try to surrender or withdraw monies from a deferred annuity. The penalties can last as long as 10-15 years, and can sometimes be as high as 25%!

• Forfeiture Charges -

  What would you think if someone offered you a higher return through a bonus or interest tied to a stock market index, only to find out these extras require you to hold onto the policy for as long as 15 years to avoid forfeiting them?

• Charges at Death

  - Deferred annuities offer a death benefit when you die, but you should check to see if the policy can penalize your heirs/estate at your death.

• Teaser Interest Rates

  - If an agent offers a high rate of return on a deferred annuity, you should ask if the rate drops to a lower rate the next year. Many deferred annuities drop to an interest rate much lower than CD or comparable product.

What am I really Paying for?

Most people don't realize that deferred annuities are very costly products that the insurance companies make you pay for through rates of return that are inferior compared to other investment products or portfolios with lower costs and an equal amount of risk. So what are you really paying for?

Typical costs include:

• Commissions

  - Did you know that the agent who offered you free advice and sold you a deferred annuity made money off of you - as much as 15% of what you paid!

• Bonuses and Teaser Rates -

  Did you know that you are paying for these extra bonuses through lower interest rates in later years?

• Liquidity -

  Did you know that the company requires a penalty if you take your money out, even if for an emergency, before the surrender charge period expires?

Your Senior Expert May Not Be an Expert

All deferred annuities are sold by insurance agents licensed with the state. Some insurance agents may have little or no qualifications or expertise in financial planning. In recent years, some agents have used allegedly phony credentials like Certified Senior Advisor that falsely represent their actual qualifications or expertise in financial planning.

Deferred Annuities - What YOU Can Do to Protect Yourself

There are a number of things you can do to protect yourself from fraud.

• If you were already sold a deferred annuity, you have 30 days to cancel it if your are 65 or older.

• If you were already sold a deferred annuity, call our attorneys toll free at

  888-503-8267 or email info@evanslaw.com

  .

• Research the product.

Get an opinion from an independent financial advisor who is not getting a commission and is not an insurance agent.

• Ask if there are surrender or death charges.

• Ask how much the agent is earning in commissions.

• Ask what specific fees and charges are featured.

• Ask if the interest rate drops after the first year.

• Consult websites and resources related to senior financial planning in order to learn about deferred annuities.

• Check to see if there is a pending lawsuit against the insurance/annuity company.

• Always have a close friend or family member to consult with when making investment decisions. Most importantly, have a reputable financial planner look over the product to see if it is appropriate.

• Check the agent's credentials.

  Here are some resources you can use to research the agent:

  • State Departments of Insurance such as the California Department of Insurance

  • SEC and FINRA (formerly NASD)

  • The internet - use any major search engine such as Google or Yahoo!

Watch out for agents who use phony certifications that misrepresent their actual qualifications or expertise. Always check to see if that credential is valid and matches that agent's expertise.

Some designations you should look out for:

• Certified Senior Advisor (CSA) - earned through three and a half-day course, where no college degree or prior financial experience is required.

• Certified Retirement Financial Advisor (CRFA) - earned through a four-day in-person or self-study course. College degree or prior financial experience is required.

• Certified Senior Consultant (CRC) - earned through a thirty-hour self-study course. An undergraduate degree and one year of experience in financial service is required.

Compare:

Certified Financial Planner (CFP) -

A master of 89 topics in integrated financial planning. At a minimum, in order to earn this designation, an undergraduate degree is required, plus course training in the above topics, as well as passage of a ten-hour multiple choice exam.

If you have already purchased a deferred annuity, here are some things you can do to make sure you understand the policy you purchased:

• Read Your Policy

  - If needed, consult a close friend or family member and reputable financial planner.

• Opt for the Free-Look Period

  - Most states have laws which allow you to cancel your policy if done within the certain time period. In California, it is 30 days.

For more information or to speak to an attorney, please contact info@evanslaw.com or call us toll free 888.503.8267 for a free and confidential consultation.

About The Evans Law Firm

The Evans Law Firm is a plaintiffs’ firm concentrating on elder abuse (physical and financial), consumer fraud class actions involving, particularly insurance and banking claims,  consumer product liability and personal injury/wrongful death cases, particularly asbestos-mesothelioma, pharmaceutical product liability, negligence personal injury claims, as well as qui tam (whistleblower/false claims) and employment discrimination litigation.

\WWW.EVANSLAW.COM