Category Archives: Money

Looking at Long Term Care Insurance in a new way

Long Term Care Insurance (LTCI) is not new and over the past few years, has not had the best reputation. It has been understood that while LTCI is great for helping people afford caregiving in their homes, the use of this insurance has been declining for the last 10 years.

Recently, there has been a lot of changes in the Long Term Care Insurance industry as they have seen the escalating costs of private duty care eat into their ability to offer a substantial benefit to their clients. One of the biggest changed to help with making LTCI more affordable and increase the benefits for elder Americans was allowing individuals to use companies like Well Beyond Care to hire their own caregivers instead of having to use the more costly private duty agencies in order to get reimbursement.  Lauren Tarrant, Well Beyond Care’s COO and Chief Nursing Officer was able to talk recently with, Randal Parker, who works in the LTCI industry and he was able to shed more light on some of these changes and how LTCI should be used by more people.

Mr. Parked stated that the driving force for him to offer these (LTCI) policies to families and seniors is, “I get to see firsthand what a difference I can make in someone’s life. To get a hug from a daughter after signing a policy  which allows her parents to afford care in-the-home or God-forbid a nursing facility.” He added, “I’ve delivered death claim checks and benefit checks and the hardest thing for me would be if I wasn’t able to help them in their time of need. To be appreciated by my clients is important to me. I used to be in the business of selling John Deere Tractors in Vermont. Now I’m here and this feels so different. Maybe because I’m aging or maybe just because I can help people in a totally different and more personal way.”

Mr. Parker outlined two LTCI policies that not only offer great benefits, but allow individuals to get reimbursed when hiring their own caregivers. One is from New York Life and one is from Kemper Reserve National. Disclaimer: Mr. Parker offers policies from both New York Life and Kemper.  He explains that there are many moving parts and LTCI used to be very pricey and limited, but much of that has changed recently.

First, New York Life (NYL) offers a policy through AARP.

New York Life: Benefits included in the policy.

Day 1 – Care Family Friends can be your caregivers and get paid.
Day 1- adult day care can start on day one and get reimbursed.
Day 20 – Home Care – Health caregivers can start coming to your home and can get reimbursed.
Assisted Living and Nursing Home care – you can choose from 30 to 365 days of waiting-
Extra Hospice Care is covered even with Medicare.
Dividends – You begin receiving dividend payments starting on year 10. These will reduce your premiums until your policy is paid in full.
Care Coordination support – You are assigned a person who creates a plan of care with your doctor, and then monitors your care for the whole time you are on claim.
Restoration of benefits– If you go on claim and then recover, all those used funds go back in your benefit pool.
NYL Financial Strength – New York Life has paid dividends for 172 years, and has $1.47 for every $1.00 in liabilities.
Plus, NYL  has another 29 billion in excess reserves, a 100 Comdex score, and only ever had 1 Increase in premiums (2014).

To learn more about this NYL LTCI offering – Click the link below to register: https://nylltc2020cc.eventbrite.com for an upcoming Online Long-Term Care Insurance Sales Presentation dates.

Here is the information about the Home Health Care plan being offered by National Reserve as part of the Kemper Insurance Company. This plan pays for both Home Care and Adult Day Care but not for assisted Living or a Nursing home. That is why the cost is so reasonable.  Concerning this plan, Mr. Parker stated, “So far, I’ve been able to help people with Parkinson’s, Autism, MS, pre- dementia, heart issues, cancer less than 1 year out from treatment, as well as individuals using walkers, canes etc. These plans are a gift for these people.”

Kemper offers two plans.  Each plan lasts for 365 days of care and pays up to $150 per day (or $4,5000 per month)  The reason to purchase the 2nd plan is to create uninterrupted care for as long as you pay the premiums. You can even overlap these plans for twice the benefit.

So what are the costs?

Kemper cost example: for a 65-year-old Male or Female.  The base plan is $27.25 per month. The inflation rider [5% compound] is $27.95 per month. That totals $52.20 per plan per month. Purchasing both plans  costs $110.40 per month, with the inflation rider included. This inflation rider guarantees that your benefit will increase to $232.00 a day or $6,960.00 a month in 10 years time.  The math is simple. You pay $110.40 per month for a $4,500 a month benefit initially, which  increases to $6,960 over time.

While the New York Life plan is nationwide, Kemper is only offered in 39 states. People 55 and older think that they might or will never need it. Kemper is different, as it offers lifetime benefits with just a 6 month waiting period. As long as you are making the premium payment, clients will have coverage of $150 per day today, and $232 per day after 10 years. With the inflation rider, benefit goes up every year.

So why are we at Well Beyond Care telling you about Long Term Care Insurance? Well, it is about letting you have more benefit without spending more money. Of course you can use a private duty agency and pay between $25 and $30 per hour, or you can use Well Beyond Care and do it yourself and pay between $15 and $18 per hour, or 35% to 50% less. That means you benefits go further.

As an example, if  you are receiving an $150 per day LTCI benefit and you care paying $25 per hour for care, you will receive reimbursement for 6 hours of care per day. Will Well Beyond Care, that turns out to 10 hours of care at $15 per hour. That is a 67% increase in the amount of care received. And this is huge.

Out company’s interest in LTCI started when we found that our client, Lois, had spent years and a fortune on LTCI but did not know how to get reimbursed and didn’t want to “bother” her daughter who lived out of town. She said to Lauren Tarrant, “She (my daughter) has better things to do than to hunt down signatures and forms, ahhh, just forget it.”

We could not just forget about it.

From our view at Well Beyond Care, people do not ask for reimbursement even when they have paid for years of coverage. If you have paid for the coverage for years, there should be an easy way to get reimbursement. Because of Lois, and many others since, we have simplifies Reimbursement Process for anyone who uses are system to hire and manage a caregiver. All you have to do is to complete the LTCI page with your LTCI information and your forms will be processed and waiting for you in the Finance Section. Payroll is performed weekly and the forms will only need to be printed and sent either by email, fax or mail by you for weekly reimbursement. Your choice.

We hope this has been informative, and thank you.

About Well Beyond Care
Well Beyond Care is the only company that teaches families and individuals how to find and manage affordable non-medical in-home care, while solving the chronic problems of caregiver truancy and turnover through the web application, WellBeyondCare.com. The Company’s platform combines the power of the internet with the personal touch of nurses to offer families a pathway to transitional care, allowing our elderly parents to safely age-in-place. Their solution lowers stress in hiring a caregiver and saves families tens of thousands of dollars per year in care costs.

 

Bank Fees and How to Avoid Them

Well Beyond Care’s dual mission is to save our clients $10K to $30K with caregiving costs compared to private duty care agencies and at the same time, increase a caregiver’s wages by 25% to 40% over working with those same agencies. With that said, we are always on the lookout for ideas and information that can save costs wherever we can find them. The that said, we have been given permission by Bankrate to reprint their article “9 ways banks may penalize you and how to avoid these pesky fees” authored by Matthew Goldberg. With the elderly on fixed incomes, and caregivers struggling to make ends meet, this advice can be a savvy way to make your dollars go further.

Jose Luis Pelaez Inc / Getty Images

In football, getting called for a penalty can result in lost yardage. But when it comes to banking, being charged a penalty can be costly for your hard-earned money. That’s why it pays to steer clear of triggering them.

Common penalties such as overdraft and non-sufficient funds fees are pricey. Consumers pay as much as $17 billion annually in these fees, according to 2017 Consumer Financial Protection Bureau (CFPB) estimates.

“They’re all avoidable as far as I’m concerned,” says Ashley Coake, certified financial planner, at Cultivate Financial Planning in Radford, Virginia.

Knowing the most common penalties and fees on banking products, and how you can avoid them, can help you save cash. Here are nine things to game plan against to help keep the money scoreboard showing in your favor.

1. Early withdrawal penalties on CDs

CDs typically charge an early withdrawal penalty if you close them, or take money out, before the term ends. Early withdrawal penalties are costly and can reduce your gains and can even cut into your principal. Some banks don’t allow partial withdrawals, so that all-or-nothing mentality needs to be a part of your planning process.

An early withdrawal penalty on a five-year CD may range from 150 days to 540 days. But these penalties may vary.

How to avoid this fee: Determining when you’ll need your money is the best way to avoid early withdrawal penalties. Also, knowing the purpose of the funds is critical to avoid this penalty. Put a portion of the money into a savings account or money market account if you think you might need some of it during the CD’s term. Also, you may want to consider a no-penalty CD.

“Just really think ahead,” says Pam Horack, certified financial planner, at Pathfinder Planning in Lake Wylie, South Carolina.

A one-year CD is probably not the best option if you’re currently looking to buy a house, Horack says.

“If you’re concerned that you might spend that money and that’s why you want to put it in a CD, put it in a savings account at a different institution than your regular checking — just to make it a little bit harder for you to get to,” says Horack, who previously worked as a branch manager, teller and customer service representative.

2. Early closeout fees on accounts

CDs aren’t the only banking products that charge a fee if you close them too soon. At some banks, closing an account too soon will cost you. Banks with this fee usually assess it if you close the account in the first 90-180 days.

How to avoid this fee: Research whether your account has one of these fees. Know that you’ll need to keep one of these accounts open for the required time to avoid the fee. Keep this, and the minimum balance, in mind before opening the account.

In reality, if you plan to close an account this quickly it might not be the right time to apply or the right fit for you.

3. Maintenance fees

Some banks charge a maintenance (or monthly) fee if you go below a certain balance in your account. Banks may charge these fees to encourage deposits or certain balances. This helps banks guarantee you’ll either have a certain amount in your account or you’ll be paying a fee.

Maintenance fees usually range from a few dollars to $25. Banks that have these fees usually waive them if you maintain your balance above a specified amount or have a direct deposit set up. Making a certain number of transactions or being a student may also waive the fee at some banks.

How to avoid this fee: Check the fine print and choose a bank that either doesn’t charge these fees or one with requirements you’ll be able to meet. Be strategic about your banking choices. Use your direct deposit to help waive fees in one account. For other accounts, look for banks with either no minimum balance requirement or a low one.

Online banks — banks that don’t have physical locations — usually don’t charge these fees. So these types of banks should be included in your search.

4. Overdraft fees

Overdrafting is spending more than you have, resulting in a negative bank account balance. This could be caused by mismanaging money or accounts. For instance, you may have plenty of money in savings. But you write a check out tied to a checking account and forget to transfer the money needed to cover it fully from your savings. Or it could be a cash flow issue, with income coming in the near future.

Keep an eye on your account and know the minimum balance needed, says Coake.

“Or [know] ‘I’m about to write a big check, and I don’t have enough to cover it,’” says Coake, a former assistant branch manager.

Making purchases with a credit card, instead of a debit card, can be a way to avoid overdraft fees. But you’ll need to pay off your balance every month in order to avoid interest, Coake says.

The average overdraft fee was $33.26, according to Bankrate’s 2019 checking account and ATM fee study.

How to avoid this fee: Know your checking account balance before using your debit card or writing a check. That’s the best way to avoid this fee. But that can be easier said than done.

Using a credit card for purchases will also avoid overdrafts. It buys you some extra time, since you don’t have to pay for these purchases until your statement payment is due. But make sure you pay it then, otherwise high annual percentage rates (APRs) could be more expensive than overdrafts over time.

Savings overdraft protection may have no transfer fee in some cases. Or it could have a lower fee than standard overdraft fees. Savings overdraft protection is when your savings backs up your checking account.

5. Sustained overdraft fees

Some banks may charge you this fee if you have a negative balance for too long. In some cases, you might not have the money so it’s just adding to the problem. However, if you have the money in another account, make sure you transfer it over quickly to avoid this fee. This may also be called an extended overdraft fee.

How to avoid this fee: Monitor your accounts and set up alerts. Being aware of your balances and budgeting can help make sure you have cash on hand for these circumstances.

Using a credit card for purchases during this time, and using cash to make your account positive quickly, can buy you some time until the statement balance is due. Just make sure you pay your credit card to avoid paying interest.

6. Excessive withdrawal fees

Savings accounts and money market account are subject to Regulation D. This means you can’t exceed six withdrawals in a month in these types of accounts.

Many banks will penalize you by charging you an excessive withdrawal fee if you exceed that limit. Some may close the account or move it to a non-interest-bearing account.

How to avoid this fee: Keep track of the number of times that you withdraw from your savings account in a month. Try to use your savings and money market accounts as infrequently as possible so that the funds are truly there for emergencies.

Since the limit doesn’t apply to ATM withdrawals or trips to the teller, stick to these methods for withdrawing money, if you’re getting close to the monthly limit. Put more of a buffer in your checking account, and less in your savings, if you’re needing to transfer money often from savings to checking.

7. Paper statements

Receiving statements in the mail can cost you, as many banks now charge paper statement fees. Some banks may waive the fee on their top-tier accounts. Typically, there isn’t a fee for electronic statements.

How to avoid this fee: Sign up for paperless statements when you open your account or when you first login to your new account. Check online or with your bank to make sure paper statements do not incur a monthly charge

8. Fees for transferring your money

Banks typically charge you for official bank checks and wire transfers. Sometimes a bank will even penalize you for receiving funds via wire transfer. So it’s important to know if your account charges this fee.

How to avoid this fee: Wire transfers are often used when you need to get money somewhere fast. Planning ahead could make these unnecessary. Also, see if a bank has free wire transfers or other payment options, such as Zelle, that will allow you to move money to others quickly. A service like Venmo may also help you reimburse others for smaller purchases.

Your bank may offer an Automated Clearing House Network (ACH) transfer option. Make sure it doesn’t have a fee and or limit the amount you can transfer.

9. ATM withdrawal fees

ATM fees can quickly add up. The total cost of withdrawing money from an out-of-network ATM was $4.72, on average, according to Bankrate’s 2019 checking account and ATM fee study. The ATM surcharge is $3.09 and the fee to use the other bank’s ATM is $1.63, on average.

How to avoid this fee: Many banks either have a large ATM network or waive ATM fees if you use another bank’s machine. Look for a bank that won’t charge you an ATM fee for machines convenient to you.

Planning can make a big difference

You’ll be able to avoid nearly all of the above penalties and fees by keeping track of your transactions and saving.

“A little bit of pre-thought into what you’re doing and making sure you understand the rules around your account will help save you a lot of money and frustration,” Horack says.

About Bankrate
Bankrate has over four decades of experience in financial publishing. Bankrate was born in 1976 as “Bank Rate Monitor,” a print publisher for the banking industry. In 1996, Bankrate made its online debut as Bankrate.com. Since then, Bankrate has grown to over 15 million monthly unique visitors, expanded its distribution outlets and added new content channels. Bankrate.com also publishes original and objective content to help individuals make smarter financial decisions. Their award-winning reporters and editors provide expert advice on nearly every major financial decision an individual or family may encounter — from purchasing a first home, to selecting a new car, to saving for retirement.