Welcome to the fifteenth edition of Long-Term Care in the News. We, at Custom Care Solution, LLC, want you to be on the cutting edge of changes and updates within the Long-Term Care industry. We will accomplish this through these email bulletins distributed each week to our brokers, agents and their staffs.

Long-Term Care In The News …….

Custom Care II

John Hancock announces the approval of its new long-term care insurance product portfolio (Custom Care II and Essential Care II) in New Jersey and Pennsylvania. The FamilyCare II Benefit has also been approved in NJ (it is not available in PA). The new product portfolio will launch in these two states on June 28, 2004. The new portfolio maintains a strong foundation in the original Custom Care product line, one of the most popular product lines in the industry, while once again reaffirming John Hancock’s position as an innovative leader in long-term care product development. John Hancock will continue to accept the current Custom Care and Essential Care applications signed on or before July 23, 2004 and received in their Home Office on or before July 30, 2004 for New Jersey and Pennsylvania. Clients who have application in underwriting or who have had a policy issued within 90 days of June 28^th will have the opportunity to exchange their current Custom Care or Essential Care policy to the new series. Please do not hesitate to call us should you have any questions regarding the upcoming product launch in these states.

The Ronald Reagan Alzheimer’s Breakthrough Act of 2004

A bill (S.2533) introduced June 16 to boost funding for Alzheimer’s disease research and provide support for caregivers includes a provision to allow an above-the-line tax deduction for the cost of long-term care insurance premiums, a proposal that has languished in Congress for years. This bill was introduced by Sen. Barbara Mikulski (D-Md.) along with more than 40 co-sponsors from both parties. The bill would, among, other things, double the funding for Alzheimer’s research at the National Institutes of Health and for two program that increase the availability of services like home health care, counseling, and training for caregivers.

The deduction for long-term care premiums was introduced as a stand-alone bill in 2000, 2001, and 2003 by Senate Finance Committee Chairman Charles Grassley (R-Iowa) and Sen. Bob Graham (D-Fla.), each time with a companion bill in the House sponsored by Rep. Nancy Johnson (R-Conn.). Graham said on the floor as the bill was being introduced that the current deduction for premiums is limited in amount and available only for the 30 percent of taxpayers who itemize their deductions. Under the new proposal, the deduction would start at 60 percent for premiums paid during the first year of coverage and increase each year until reaching 100 percent after at least four years of continuous coverage.

The schedule would be accelerated for those 55 or older, starting at 70 percent and increasing to 100 percent after at least two years of continuous coverage.

In addition for the deduction, the bill includes a $3,000 tax credit, phased in over four years, to defray long-term care expenses for individuals or their caregivers. The proposal would apply to those who have been certified by a doctor as needing help with at least three activities of daily living and would be phased out for married couples with income above $150,000 or $75,000 for single taxpayers.

While many Americans believe that long-term care is an issue primarily affecting seniors, the reality is that 5.2 million adults between the ages of 18-64 and over 450,000 children need long-term care services today. These numbers are expected to double as the baby boom generation begins to retire.

When The Client Thinks, “I’m Too Young for LTC”

According to a recent article in the National Underwriter, Insurance agents are used to dealing with clients who refuse to acknowledge their physical vulnerability. For producers selling LTC insurance, this is the client who wants to put off the purchase until he is a little older. This client is courting danger. No one can buy LTC coverage after they develop a serious illness, whether it be Alzheimer’s, diabetes or whatever. Ask your wavering buyer what, specifically, they want to think about. This may uncover a hidden doubt. It might be price, or simply that the agent has not convinced the client completely that he really wants the policy. Answer the real objection, then attempt to close again. Remind your client that most likely they may never be healthier than they are right now. In addition, carriers are repricing LTC products that have been underpriced in the past. Many carriers are now pricing 30% more than last year and they may be raising prices again. Your clients will get the best rates and the best deal now! Your job as a good salesperson is to show your clients that it is not in their interest to wait. For a complete copy of this article please give us a call.