The way we approach aging, as individuals and as a society,
continues to evolve, dramatically.
At Genworth, we released a new study, Beyond Dollars 2018. But before I tell you more about it — and share some of the eye-opening results — I think it’s important to share why we did it in the first place.
Aging in America Has Come Full Circle
In the 1800s, it was common for older adults to rely on family. While the wealthiest families could fund a comfortable retirement, those who labored on farms or in factories often worked until they were physically unable to work any longer. They worked because it allowed them to maintain their independence and grow older in their own home.
When old age eventually forced their hand, many moved in with their children, who then took over as head of the household — creating a sense of dependency. While there were benefits to multi-generational households, they tended to come about not by choice, but by necessity.
During the 1900s for some people, aging was, in effect, outsourced.
First, it was outsourced to hospitals. Older adults needed care, but it wasn’t necessarily for the types of medical conditions that required 24/7 monitoring by physicians. The care they really required was not medical care, but long term care — help meeting their most basic needs, like eating, bathing, and getting dressed.
Long term care needs are more common than most of us know or admit. According to the Department of Health and Human Services, the majority of us will need long term care services as we age — and the longer we live, the more likely we are to have a need for it.¹
As I wrote in “The Downside of a Miracle,” the blessing of longer life expectancies also burdened more people with diseases and conditions that can lead to a long term care need — like Alzheimer’s, cancer, or stroke. Doctors manage the treatment of these conditions, but who takes care of meeting everyday needs?
Suffice it to say, hospital stays are expensive — especially for someone who might need long term care for months or even years. “By the early 1950s, long-term stays in the hospitals were common for older people,” reads the Encyclopedia for Elder Care.
America needed another option, and in 1954 a change in federal law incentivized the construction of nursing homes designed to deliver round-the-clock elder care. Of course, many people needed less care and wanted more independence. Over the following decades, this increased demand led to the creation of still more options, like assisted living/residential care facilities and adult “daycare” centers.
You might expect all this to have led to a decrease in hospital admissions, and that’s what has happened. Even though the U.S. population has only increased since 1981,² the number of times Americans have checked into hospitals has actually decreased. As Ezekiel J. Emanuel wrote in The New York Times, “The number of hospitals is also declining because more complex care can safely and effectively be provided elsewhere, and that’s good news.”
Although nursing homes, assisted living, and adult day care facilities can provide the right care, according to a NCOA study, “approximately 90 percent of seniors intend to continue living in their current homes.”³ So aging in place is still the optimal choice for many.
With that in mind, the results of a recent survey⁴ won’t come as a surprise. Researchers asked health care industry executives about where they’re investing most. Some — 7 percent — are looking to innovate within existing long-term care facilities, McKnights wrote. But far more — 44 percent — are investing in home health.
Aging in America has come full circle — with one important caveat. Growing older at home was once the only option. Now, it is the first choice.
Today, our goal is to help people age independently, on their own terms, with children and family members providing support. Our Beyond Dollars Study⁵ points the way to making that happen. Let’s look first at the dollars themselves.
The Cost of Aging in Place
Aging at home means bringing long term care services home. Like it or not, this care comes at a cost, and the financial costs are just the beginning.
Those who wish to age in place might hire a home health aide or homemaker service. In-home care assistance averages around $4,000 a month. (That’s based on a national median. You can use Genworth’s Cost of Care web app to see what costs are like in your area⁶.)
As discussed in “The Downside of a Miracle,” long term care is different from health care. It’s not covered by regular health insurance, and it’s not covered by Medicare except for a limited time after a hospital stay. To get insurance to cover long term care expenses, you need to get a long term care insurance product.
Those who don’t purchase long term care insurance have a few options. Those who are wealthy enough can spend down their retirement savings. And others who spend down enough of their assets can qualify for Medicaid — the government health care program designed for the destitute, which covers long term care.
But many families are caught in the middle: too wealthy to qualify for Medicaid but not wealthy enough to comfortably cover the cost of care without spending the savings that would have supported a comfortable retirement or provided an inheritance for the next generation.
Many turn to family and friends to provide care without compensation. But uncompensated doesn’t mean cost-free.
Caring for a friend or loved one can be an experience that is both rewarding and challenging. When considering this option, it’s important to understand what’s required of caregivers. Unpaid care still comes with financial costs, as well as emotional ones. And that’s what the Genworth Beyond Dollars Study 2018⁷ is all about.
The Cost of “Free” (Unpaid) Care
In some cases, the need for long term care can arise unexpectedly, and immediately, like after a stroke or a fall. In other cases, it can become increasingly necessary over time — for instance, as a person living with dementia comes to rely more and more on the people around them.
As our Beyond Dollars Study⁸ shows, about one-in-five indicate they or a close relative (over the age of 25) have experienced an extended healthcare event in the past 12 months.⁹ Spouses, children, friends, and neighbors are often quick to offer help. They shop for groceries and cook meals. They help with dressing and getting out of the house. They schedule appointments and drive to them.
Help meeting these basic needs doesn’t just make a meaningful difference for those who receive care; it can also benefit the caregiver. When we talked to unpaid caregivers for the study, 82 percent of them said they experienced some positive aspects of providing care.¹⁰ Many said it was a source of pride to be able to provide support at a time when someone needed it most. Others found that the experience strengthened their spiritual life and improved their perspective on life in general.
But Beyond Dollars found that caregivers experienced downsides, as well. Giving care also means giving up other things in the process. It can mean putting life and relationships on hold, as well as putting their own health and finances at risk.
Our data show that unpaid caregivers make four key sacrifices:
- Their time: On average, caregivers spend 21 hours per week providing support. More than 20 percent report that they’re regularly late to work or absent from work for more than 10 hours a week — a quarter of a 40-hour work week. More than half of caregivers report losing a third of their annual income in the process. Over the three years of a typical long term care need, that means sacrificing an entire year’s paycheck.
- Their income and savings: When the care is unpaid, caregivers end up taking money out of their own pocket to cover needed costs — more than $10,000 total, on average. To cover the cost of supplies, transportation, and other basic needs, the majority of caregivers go so far as to cut back on their own spending and tap into their own savings or retirement funds. Savings that would have gone to college funds, home repairs, or vacations are redirected to long term care.
- Their other relationships: Although providing care can deepen a relationship with the person who receives that care, other important relationships can suffer. Most caregivers are married with children under 18. Time spent caregiving is time that could have been spent helping with homework, going to sports events, or traveling for vacation. It’s remarkable that 40 percent of those surveyed said caregiving strained their relationship with their spouse.
- Their own health and well-being: For caregivers who are also juggling family and career, all the sacrifices add up. Caregiving can take a toll on physical, mental, and emotional health: 41 percent experienced negative feelings — including depression; 46 percent said that caregiving affected their overall health and well-being; 50% of caregivers report having less time for their spouse/partner, children and themselves.¹¹ And more than half experienced an increase in stress.
At its most fundamental level, long term care is about being there to support someone who needs help to meet their basic, everyday needs. It doesn’t require a special degree or expert skills. Practically anyone can do it.
And yet, Beyond Dollars indicates that unpaid caregivers — friends, family, neighbors — would benefit from having easier access to expert advice. More than half say they don’t feel qualified for the job. They wish they had a firmer foundation on which to base their decision making, to help them get past confusion and focus on providing care. If they have questions, they might reach out to someone they trust; if that fails, they often turn to Facebook or WebMD to get more information.
Fortunately, there are a growing number of nurses skilled in providing long term care. Demand for registered nurses, home health aides, and personal care aides is growing. “Because many older people prefer to be treated at home or in residential care facilities, registered nurses will be in demand in those settings,” noted the Bureau of Labor Statistics¹². BLS predicts the number of aides, specifically, to grow 41 percent between 2016 and 2026 — and will continue to grow “as the baby-boom population ages and the elderly population grows.”¹³
Of course, the care nurses and aides provide isn’t free. But as we now know, unpaid care isn’t free, either. There are emotional costs, as well as financial ones, and it’s important to plan for both.
When it comes to financing a potential long term care need, families ideally plan for more and hope they’ll need less. And that’s where insurance comes in.
Making a Plan that Includes Long Term Care Insurance
Long term care insurance is different from health insurance. It does what Medicare and typical private health insurance plans do not: it reimburses the beneficiary for what they spend on eligible long term care services.
But insurance also does much, much more.
As discussed above, unpaid caregivers take a number of risks to help loved ones age in place. They tend to sacrifice their time, their other relationships, and their own health and well being. Many have to work fewer hours in order to provide care, reducing their own income or drawing down their own savings in order to cover the costs that come up.
Long term care insurance is there to help mitigate these risks.
Instead of draining their own savings, the care receivers’ insurance policy can provide reimbursement for care expenses. Rather than managing care entirely on their own, they can bring a skilled provider into the home. In this way, insurance may help lift a financial burden and relieves emotional stress. It frees up time and resources for caregivers to continue investing in all the people and things that are important to them — including to provide best possible care for the loved one who needs it.
America is better off when more Americans can enjoy the sense of security that comes with being insured.
At Genworth, we are working to increase the accessibility of long term care insurance by simplifying the product design and making it easier for people to understand and purchase it.
In the past, the insurance companies, including us, tended to focus on top-tier plans for those who wanted the gold standard. Now, we offer a range of insurance options designed to meet the needs of a wider range of people — including those who appreciate that some coverage is better than no coverage.
We’re also committed to helping people understand all their options, in addition to private long term care insurance. I’ve mentioned elsewhere that the wealthy can afford to self-insure (but they often purchase insurance anyway to help protect their nest egg). I mentioned other alternatives above: spending down assets and retirement income in order to qualify for Medicaid, or relying on family, friends, or neighbors for unpaid care.
It Pays to Plan
No matter what — no matter who you are or what your income level is — it’s important to plan ahead.
In fact, caregivers we talked to for our Beyond Dollars Study said that if they could rewind the clock and relive their caregiving experience, one thing they would have done differently would be to plan better.
Some would have researched more options. Others wished they’d sought help sooner rather than later. Aging affects us all — and not just in the ordinary way, in which we all get older. When someone needs long term care, it has significant impact on the way their loved ones live and work.
There are benefits. Helping a family member navigate the aging process can give a new perspective on life and better spiritual grounding.
And there are challenges, too — financial, emotional, and social. So many of us know someone who, in caring for others, so often fail to take care of themselves.
Planning ahead for long term care means being aware of all of these potential costs and how to mitigate them. It can make for a retirement that is as well-lived as the rest of life.
What is a premium audit for business insurance?
To begin to understand what a premium audit is and why it’s important, let’s take a walk down memory lane.
When you first set up your commercial insurance policy or the last time you completed a business insurance review with your agent, you may remember your agent asking you to predict certain things your business might experience in the coming year, such as the makeup of your workforce or annual revenue.
This prediction or estimate is an important part of the process to insure your business. It helps set a price, or premium cost, for your commercial insurance policy so you are paying an adequate amount for your business’s unique needs.
Later on, your insurance company, in conjunction with TJ, your agent at Shield, will check how close the prediction was to the business you actually had for that policy year. This is a premium audit. A premium audit is performed regularly by your insurance company to determine the correct premium (i.e. cost) for your business insurance.
Why does business insurance have premium audits?
Unlike personal insurance policies for a car or home, which have more stable and predictable changes in property value and risks, a business is very dynamic. Its income, operations and risk levels can change all the time, and sometimes in unpredictable ways.
Commercial insurance can cover a business’s physical location and property as well as its liability. Physical location and property can be more predictable to insure. However, business liability tends to be impacted by a business’s growth or shrinking, which is more unpredictable. As a business grows or shrinks, it increases or decreases the chances that the business could be liable to others.
This means that parts of your commercial insurance policy are built to change with the ebbs and flows of your business.
How does a premium audit affect my insurance costs?
During a premium audit, if your business grew more than the amount estimated, the resulting increase in things like sales and payroll means your insurance premium will likely increase.
The same is true in reverse. If your business saw a reduction in business from the policy estimate, you will likely see a reduction in your premium cost.
When an insurance company performs a premium audit, it is looking for accuracy — for both the insured business and the insurance company.
Here’s why: The insurance company needs accurate information to determine things like claims reserve calculations and ratemaking. When the insurance company collects accurate data from its commercial policyholders, it leads to a more financially-sound insurance company.
Accurate data also leads to a fundamentally more sound insurance system overall since the premium data collected by insurance companies is reported to the Insurance Services Office (ISO), the National Council on Compensation Insurance (NCCI) and state government entities, who then use the data to provide guidance, rules and regulations back to insurance companies.
How can my business prepare for a premium audit?
Keeping organized business records is the best way to be ready for a review of your business insurance. When properly kept and provided to the auditor, these records can help keep your insurance cost in line with your actual business needs and may even allow you to take advantage of exclusions or lower rates.
The following bookkeeping practices can help you prepare:
- Payroll records – Track and show actual payroll by type of work for each employee and business owner. Track overtime, severance and other payroll items.
- Subcontractor records – Use insured subcontractors when possible. Request and keep a copy of their Certificates of Insurance. Track and show payments by type of work.
- Sales records (e.g., income statements) – Track and show sales by product. Track sales by customer, returns and other sales items.
You can also speak with your independent insurance agent commercial business specialist, TJ Simmons, to learn more about premium audit, how it may affect your premium cost and steps you can take now to prepare for it.
This article is for informational and suggestion purposes only. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies.
Have you ever had a moment — while looking at your insurance policy or shopping for insurance — when you’ve thought, “What is insurance? And do I really need it?”
You’re not alone.
Insurance can be a mysterious and puzzling thing. How does insurance work? What are the benefits of insurance? And how do you find the best insurance for you? These are common questions, and fortunately, there are some easy-to-understand answers for them.
To help, here are a few simple insurance explanations:
What is insurance?
Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. When you purchase insurance, you’ll receive an insurance policy, which is a legal contract between you and your insurance provider. And when you suffer a loss that’s covered by your policy and file a claim, insurance pays you or a designated recipient, called a beneficiary, based on the terms of your policy.
The most difficult thing about insurance is that you’re paying for something you hope you never have to use. Nobody wants something bad to happen to them. But suffering a loss without insurance can put you in a difficult financial situation.
What are the benefits of insurance?
Insurance is an important financial tool. It can help you live life with fewer worries knowing you’ll receive financial assistance after a disaster or accident, helping you recover faster. When it comes to life insurance, this could mean your family doesn’t have to move out of the house or that your kids can afford to go to college. For auto insurance, it could mean you have extra cash in hand to help pay for repairs or a replacement vehicle after an accident. Insurance can help keep your life on track, as much as possible, after something bad derails it.
Your independent agent is a great resource to learn more about the benefits of insurance, as well as the benefits in your specific insurance policy. For example, you may have access to perks such as free roadside assistance, risk control consulting for businesses or cash value in a life insurance policy, in addition to your insurance coverage.
And in some cases, like auto insurance and workers’ compensation, you may be required by law to have insurance in order to protect others.
How does insurance work?
Insurance is essentially a gigantic rainy day fund shared by many people (called policyholders) and managed by an insurance carrier. The insurance company uses money collected (called premium) from its policyholders and other investments to pay for its operations and to fulfill its promise to policyholders when they file a claim.
Because of the unpredictable nature of natural disasters — like tornadoes, hail, wildfires and hurricanes, and everyday disasters such as fender benders and kitchen fires — an insurance company’s main goal is to remain financially strong enough to handle anything that comes its policyholders’ way.
How do I choose an insurance provider?
Here are a few things to consider when choosing an insurance company to work with:
- Insurance coverage. What types of insurance does the company offer? Can you buy all of your insurance through the company and receive a discount?
- Financial strength. Would the company be able to pay your claim? Look to U.S. credit rating agency AM Best to determine the company’s financial strength.
- Agency model. Would you prefer the help of a local agent? Or would you prefer to manage your insurance on your own?
- Customer service. Do others recommend this company? What are people saying about it in online customer reviews?
When in doubt, contact Shield Agency and ask them any questions you have about insurance. Shield agents are insurance experts with the knowledge to guide you through the process and help you find the best protection for you and the people and things you care about most.
Not on my porch: How to avoid package theft
Package Theft: For all the convenience that ordering online gives us, there is an unfortunate downside – our delivery may be taken by someone else before we’re able to get our hands on it.
Package theft, especially around the holidays, is a growing inconvenience for many consumers. Approximately 26 million Americans say they’ve experienced package theft, with the number increasing every year as “porch pirates” get bolder and ordering online grows in popularity.1
No one wants to fall victim to the antics of a porch pirate – including you. Consider implementing these low-cost solutions so your package makes it off the porch and into your home.
- Ship it to work.
Keep your package off the porch in the first place. If your company allows, consider shipping your packages to your workplace instead of your home.
- Enlist a neighbor’s help.
Do you have a neighbor or a friend that’s usually home? If so, see if they can wait for your package or keep an eye out for it.
- Require a signature.
Consider requesting a signature for your package to be dropped off. That way, your package won’t be left on your porch exposed to potential thieves.
- Be proactive.
If you’re sending a package, ask the recipient to share information on the safest way for them to receive deliveries.
- Take advantage of alternative delivery options and alerts.
FedEx, the U.S. Postal Service and UPS all have alternative pickup and delivery options available. Visit their websites to explore your options and update your delivery preferences. You can also sign up for delivery alerts to track your package and stay up-to-date on delivery times.
- Get technical.
Consider investing in low-cost technologies like automatic light timers and motion-censored lights.
- Keep your porch clear and visible.
It may seem counter-intuitive, but if a thief has no place to hide, they’re less likely to take the risk of going up to your porch in the first place.
- Ask for your box to be nondescript.
Ordering from a high-end store? Consider marking the “gift” checkbox when you purchase so the package comes in a plain box. You can also request this of friends and family so your box doesn’t grab attention.
- Find strength in numbers.
Neighborhood groups on social media or community apps like Nextdoor can provide your neighborhood a system for reporting suspicious activity to each other.
- Visit the UPS article on How to keep packages safe from box bandits
It may not be a low-cost option, but our list wouldn’t be complete without the recommendation of a home security device. Signs announcing the presence of a home security system can go a long way in your efforts to scare off a thief. In fact, homes without security systems are 300% more likely to be broken into or vandalized.2 Bonus: You may be able to receive a discount on your homeowners’ insurance. Contact one of our agents for details.
Strategically-placed security cameras, or devices like video doorbells and lock boxes, can also go a long way in mitigating package theft and have increased in popularity for their ability to catch thieves in the act.
As long as you’re shipping products to your door, there’s a chance your package will be a target. Use these strategies to deter package theft and finally get rid of porch pirates for good.