Planning for longevity is smart, some financial advisors say "no"?

More families than ever before are affected by long-term health care. Due to the COVID-19 virus crisis, more attention has been paid to this. However, this is not a new problem. Advances in medical science ensure longevity. With longevity comes the cost and burden of aging. These health problems can be the result of illnesses, accidents or simply the effects of aging.

Family care is always difficult for relatives. The caregiver role is physically and emotionally demanding. You really can’t depend on a partner because when you’re older, so is your partner. Adult children will have their own careers, families and responsibilities. A recent poll by the Associated Press-NORC Center for Public Affairs Research says many young adults already provide long-term health care to elderly loved ones. It’s not easy for them.

The poll shows that one-third of American adults under 40 have already provided care to elderly relatives. A further third expect to be called upon to do so within the next five years.

The risk of needing long-term care is high and increases as you get older. Once you pass 40, you will notice changes in your health. You see changes in your body. As you get older, you see a decline in your memory.

What this means is that the likelihood of comprehensive health care is less of an “if” and more of a “when” and “how long.”

The fact is that the risk of needing comprehensive health care is simple: it will happen, or it won’t happen.

If you need long-term care, someone is responsible for finding a family member to provide or procure care, either at home or in an institution. The vast majority of long-term care is of a custodial nature. Home care is when you need help with the normal activities of daily living or when you need supervision because of a cognitive problem such as Alzheimer’s disease or another form of dementia.

Health insurance or, when you’re 65, Medicare and your Medicare Supplement only pay for 100 days of expert care. Long-term care is both a cash flow problem and a family problem.

Still, some financial planners and insurance agents would prefer you not research long-term care insurance. Many do not understand the product, underwriting, policy design and power of the LTC Insurance Partnership Program, which is available in 45 states.

Why? There are several reasons. Some just don’t know the facts. However, most of them are very aware of the impact of the financial costs and burdens of ageing. Why not long-term care insurance?

There is a major misconception about the costs of policy. You may have even read some articles. They indicate high premiums or premium increases over time.

The fact is premiums are very affordable for most people. Of course, if you are 75 when you take out a policy, the premium will be based on that age and your health at age 75. However, people add LTC Insurance to their retirement plan before they retire, with the majority in their 50s. Most of my clients are between 45 and 67 years old. At these ages, premiums are very affordable, especially if you are in good health and your policy is well designed.

Premiums can vary more than 100% between insurance companies for the same level of coverage.

Policy design is critical. Most claims are for home care, which usually costs less than a skilled nursing home. Policies pay for quality care in the environment you want. There are several long-term care facilities, including home care, adult day care, assisted living, memory care, and a traditional nursing home.

The American Association for Long-Term Care Insurance says most claims are for services at home. The big corporations paid more than $11.6 billion in benefits to American families in 2020. The policy works and works very well. They give families choices and reduce the enormous burden placed on loved ones.

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Partnership LTC policies provide additional dollar-for-dollar asset protection. With a Partnership LTC policy, you can buy just enough long-term care benefits to safeguard your assets without overbuying and overspending.

Some insurance agents and financial planners may want you to buy expensive life insurance instead – or worse – do nothing and insure yourself.

Self-financing is not the best way to deal with the future costs and burdens of ageing.

There are a handful of excellent “hybrid” policies available. These are life insurance policies or annuities designed specifically for long-term care. For some people this could be the best solution. But usually a non-life insurer or financial planner is not the person to talk to about these options.

You need an experienced LTC Insurance specialist. There are a handful of specialists nationwide. These are people, like myself, who represent all major companies, understand policy design and underwriting, know the power of the partnership program and have processed claims so they know how policies are actually used.

In my case, I have thousands of clients across the country in the 21 years of helping people plan for aging. Remember that premiums are based on your age and health at the time of application, as well as the number of benefits you wish to receive. These policies are custom designed, so you need a specialist who works with all major companies to help you find the right cover.

So what about premium increases. Yes, it’s true that older policies sold decades ago have seen premium increases. These “legacy” policies were priced and marketed prior to rate stabilization rules now in effect in most states.

Today’s LTC insurance policies have insurance that is much more scientific and conservative than ever before. Premiums now also take into account low interest rates, low lapse rates and actual claims. According to the Society of Actuaries, current long-term care insurance policies have a much smaller chance of future premium increases.

Regardless of these facts, it is not easy for insurance companies to raise rates on the products sold today. This should give consumers a great deal of peace of mind as they plan a way to safeguard their savings and reduce the burden of comprehensive care for their loved ones.

Perhaps the biggest difference between a long-term care specialist and a financial planner or non-life insurer is that they view long-term care insurance as a financial decision only. Yes, money is important. However, a long-term care specialist knows that it’s all about family, your family.

Yes, long-term care is a cash flow problem. However, the consequences of long-term care also affect your family.

Without a plan that covers your future lifespan, your family will be responsible for everything. The first thing my clients’ adult children tell me at the time of the claim is that their father’s or mother’s policy gave them time to be family. They are always grateful for the help that allowed them to be loving and supportive. This way they can spend quality time with mom or dad and not have to worry about where the money will come from or, even worse, having to provide the care themselves.

By working with a specialist, you get the right information you are looking for. There are several research reference websites:

LTC News offers articles and resources:

US Department of Health and Human Services:

Long-term care affects you, your family, your savings and your lifestyle. LTC Insurance is convenient and affordable asset protection. These plans not only protect your savings, but also reduce the burden on family members. Let your financial planner handle your mutual fund, stocks, and bonds. That is their expertise. Let a general insurance agent get you the best deal on your home and car insurance. But for long-term care, seek the help of an expert. Trade before you retire to take advantage of lower premiums and your overall better health.