February 23, 2020

Learn More About Long Term Care Insurance

Don’t count on Medicare to pay for the costs of at-home nursing, an assisted living facility or nursing home care. Medi-Cal helps, but only if you are low-income.

Long-term care insurance covers the cost of care if you develop dementia or can’t physically perform daily activities, such as eating and bathing. The federal government estimates that more than two-thirds of people over age 65 will eventually need long-term care. But be advised that the insurance is very expensive.

For general information, go to www.longtermcare.gov. A fee-only financial planner can be found at www.napfa.org. Local insurance agents can be found at www.independentagent.com.

Help Your Family Stay Out of a Caregiver Crisis

November is Long-Term Care Awareness Month. And it is time for everyone to get real and make a caregiving plan. This week, I caught up with the leadership team at Genworth and asked them about a recent survey they published that talks about the state of planning in America.

I boiled down their insights into 3 basic steps that will help everyone benefit from the power of planning. It is an important and urgent matter.

As a species we are on a quest to live forever. We pursue all manners of diets, medical regimes and spiritual paths to push the boundaries of our lifespan. And while we have been successful in spanning into our 100s, we have yet to catch up on the quality of life that we want to accompany these added years. We are a nation of the chronically ill.

In a recent survey released by Genworth, it showed that Americans over the age of 65 have a 70% chance of needing long-term care. Yet nearly 60% of Americans fail to have a caregiving plan in place. This is an epic fail that has serious financial ramifications.

Usually people enter their caregiving in a crisis mode. This puts fierce pressure on the next generation to juggle between work, children and eldercare commitments. This can trim up to 10 years off a caregiver’s life span due to stress and cost them up to $300,000 in lost wages, out of pocket expenses and savings. To avert going over this elder cliff and to shift gears into care planning, it is necessary to do 3 basic steps.

Every family, regardless of their starting point, can benefit from these 3 steps.

The single biggest challenge to planning is to break the silence around the topic. It is taboo. It makes us face the prospect of disease and the certainty of death. Dr. Barbara Nusbaum, a psychologist who helped analyze the findings of the Genworth survey, says that it is possible to talk about the topic.

Dr. Nusbaum acknowledges that it is a thorny issue that sparks anxiety. She says that talking about the topic during a time of strength is the key to having successful conversations. She highlights that people who are healthy and are earning have more emotional resilience to navigate family dynamics which emerge during the planning process.

My fellow c0-founder of the Caregiver Relief Fund, Ryan Whitmore, says that this journey demands patience and persistence. He encourages families to follow a wash, rinse and repeat as needed approach. For him, talking sooner rather than later is essential to avert dealing with this in a crisis mode.

The second step is to build your care team. Whitmore points out that the best care teams consist of your family, close friends and a group of the highest quality professionals. He emphasizes the need to work with reputable professional providers. He says that quality matters when you consider that financial elder abuse is widespread at $2.3 billion per year, according to a Metlife funded study.

The stronger your team, the easier it will be to thrive during the caregiving journey.

The final step is to take action. It takes time, effort and energy to educate yourself on the different aspects of caregiving.
There are many elements to designing a care plan that works for your circumstance. As such, the time to start planning is now. Act on it.

This is a complex issue that I will help simplify in my upcoming Care Corner series here at Forbes. These articles will help family’s navigate this life chapter. I will interview leading minds in the caregiving field. These insights will help family’s build strong financial and emotional foundations that transform caregiving from a time of crisis to a time of coming together.

Choosing a Long Term Care Policy for Retirement

Over the past few years, long-term-care insurance policies have become more restrictive and premiums have spiked. Generous benefits, such as lifetime payouts, are extraordinarily expensive or have disappeared from policy menus.

With the cost of long-term-care insurance soaring, many people are taking a new approach to covering the risk, by covering a portion of the anticipated expense and calculating how much they can pay from savings. Insurers are also offering more-affordable policies. For example, some are selling policies with benefits that rise with the consumer price index or provide 3-percent compound inflation protection, rather than 5-percent compound inflation protection, and such policies can cost thousands of dollars less per year.

Be sure to check the insurer’s home-care requirements. It’s better to buy a policy that doesn’t require you to use only licensed caregivers from an agency, who tend to cost more than informal caregivers. “If you’re in a nursing home, it doesn’t matter very much what company you use. But home care is where the rubber meets the road,” says Mike Ashley, of Senior Benefits Consultants, in Prairie Village, Kan.

Also, look at how the policy counts days of care toward the waiting period, which is often 60 or 90 days. Some policies start the clock as soon as your doctor certifies that you need help with two out of six activities of daily living (such as bathing and dressing) or have cognitive impairment. Others count only the days that you receive care. Note that if you use less than your maximum daily benefit, you can extend the benefit period.

Some insurers are a lot stricter than others about which medical conditions disqualify you for a policy. John Ryan, of Ryan Insurance Strategy Consultants, in Greenwood Village, Colo., recommends that agents review your medical history and then find companies likely to provide the best deal for someone with your health conditions. For his clients, Ryan tends to work with Genworth, United of Omaha and MassMutual. John Hancock, New York Life and Northwestern Mutual are also big players in the long-term-care insurance business.

Premiums vary wildly, so it’s essential to comparison shop. Recently, a policy for a 55-year-old with a $150 daily benefit, three-year benefit period and 3-percent compound inflation protection had an average premium of $2,110 — but there was a 50-percent difference between low and high premiums, according to the American Association for Long-Term Care Insurance 2012 Price Index. To find agents who can offer quotes from several companies, visit the association’s website (http://www.aaltci.org).

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