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Marketing for 55+ Older Adults, Seniors, Boomers, and their Families


Charles Kauffman CEO Atty. Ret.     
5101 River Road     
Bethesda MD 20816     
Phone 301-467-9336     
     
charles@kauffman.com     

Archive for November, 2011

IMAGINING AFFORDABLE RENTAL HOUSING

IMAGINING AFFORDABLE RENTAL HOUSING NOV 20TH 2011 

Jane Jacobs said “Old ideas can sometimes use new buildings. New ideas must use old buildings.”

 Michael Kimmelman’s provocative article in the Arts Section of the NY Times on November 17th 2011, should inspire the creation of a significant amount of affordable, well-located rental housing not only for the “homeless” but for our growing senior population to age in place and for younger students and workforce housing.  These potential residences will house one or at most two people who will eagerly swap space for small reasonably priced rentals,   walkable to shops, parks, libraries, offices and public transportation.  The need for truly affordable, accessible housing is made more pressing by the explosive growth of our senior population.

 Old factories, SRO hotels, loft buildings, depressed tenement buildings, schools and government buildings are now being converted into new luxury hotels  and new smaller residential housing units.  Such conversions are profitable and privately developed.  Private developers usually  respond quickly to simplified zoning, reduced   taxes and stimulation incentives allowing density.  Government must continue to control safety, zoning, building standards, upkeep and above all must maintain long term affordability.  Regulation is reminiscent of the 1960’s “Artist in Residence” rules which allowed conversion of unused commercial lofts to residences and studios.

 Older buildings require ideas and design innovation. New developments can be built with full floors in a high rise condominium containing more small l well designed units, perhaps containing  elements of universal design, owned and/or managed by a single entity which leases  those units and receives tax benefits in exchange for maintaining  quality units with affordable rents and increases based on cost of living .

 A coalition of developer, consumer and government groups is being organized  to  create the reality inspired by Mr. Kimmelman’s “imagination”.

 CHARLES KAUFFMAN

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“TOTAL LIFE CARE INSURANCE (“TLCI””):AFFORDABLE, PRIVATE SECTOR, POPULAR, PROFITABLE LONG TERM CARE INSURANCE

     “TOTAL LIFE CARE INSURANCE (TLCI) ”: AFFORDABLE . PRIVATE  SECTOR , POPULAR,     PROFITABLE LONG TERM CARE INSURANCE

     The insurance industry has dismally failed to address the unfulfilled demand for Long Term Care insurance policies. A huge market exists for this critical coverage, a market created by: (i) a growing demand to provide long term care services to a rapidly aging population; and, (ii) a need to relieve Federal and State governments of this significant financial burden. The dimming prospects of the CLASS Act should encourage insurance industry giants to exploit this lucrative unmet market with “new” modifications of highly profitable life insurance policies. Approximately 60% of individuals over the age of 65 will need long term care during their lifetimes, but most will not be able to afford it nor pass the physical requirement needed to obtain it. Consequently, most seniors will turn to Medicaid for government assistance.

     Insurance giants such as Genworth, Prudential and MetLife and AARP have not responded creatively to the lack of appeal  of stand-alone Long Term Care products. The few hybrid Long Term Care policies that do exist are based on an “annuity” template which requires allocations from personal savings and investments. However, these hybrids have limited appeal due to stringent life and long term care insurance requirements which exclude eligibility because of preexisting conditions. This, in turn, narrows the market to a very few affluent, eligible seniors. Another sales inhibitor that limits current market appeal is the fact that premiums already paid for stand-alone Long Term Care insurance policies are “lost’ if not used.

      The potential exists for privatization and making the long term care insurance industry profitable through a simple policy innovation and creative marketing to  expand  the insurance pool to include a large base of  younger families.

       SIMPLE MARKETING STRATEGY FOR “TOTAL LIFE CARE              INSURANCE (TLCI)”
      1. ADD A “NEW” BENEFIT AT MINIMAL COST. Merely adding a clause to conventional Term, Universal or Whole Life policies allowing prepayments for expenses needed for in-home or institutional Long Term Care. Lifetime advances would be deducted from the final death benefit. The risk to the insurer is minimized since most seniors regard institutional care as a desperate last resort. Statistically the average stay in a nursing home is 18 months at an estimated cost of $60,000 exclusive of medical payments. These factors and the “death benefit” cap reduce an insurer’s risk, resulting in a minimal increase in premiums for he additional coverage. Extending life through long term care might even prolong premium payments.
   2. TARGET A YOUNGER MARKET. Stop using the term “Long Term Care.” Young people simply do not contemplate Long Term Care as an inevitable or foreseeable future need. They see Long Term Care insurance as something for older people. What appeals to them is robust protection for life — for their families — and this added enhancement for only a slightly higher premium. The affordability of significantly more lifetime protection is an attractive selling point. Use “branding” to create customer loyalty.
   3. INSTILL LIFETIME LOYALTY. Facilitate premium payments using a simplified IRA payroll deduction plan, a roll-over with job changes and a COBRA type plan in the event of unemployment. Stability is achieved by maintaining the rates established at the inception of the policy at an early age.

     The insurance industry should wake up and realize that providing this much needed long term coverage is highly profitable, widely popular with consumers and beneficial to the national economy.
Charles Kauffman
November 2011

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