‘Tis the Season to Start Planning
by Brian Vestergaard
Mr. Vestergaard is Vice President of Product and Marketing for LifeSecure Insurance Company, based in Brighton, Mich. The company’s insurance products are sold through a network of independent marketing organizations, brokers and agents. Connect with him by e-mail: [email protected]; Please visit www.YourLifeSecure.com.
Long-term care (LTC) planning: most of us know we need to do it, but far too many don’t want to talk about it. It’s true – an overwhelming majority of Americans understand they need to plan with solutions like long-term care insurance (LTCI), or an alternative funding method, should they require long-term care services at some point. But rather than plan ahead, more than a third of people would prefer to simply avoid thinking about getting older or losing their independence, according to a study by the AP-NORC Center for Public Affairs Research.
This November, take advantage of two great opportunities to discuss LTCI with your clients and encourage them to begin an LTC conversation with their families.
First, November is Long Term Care Awareness Month, an industry-wide effort to educate consumers on the importance of proper LTC planning and financial solutions.
Second, the holiday season is about to get under way – don’t let it slow you down. Speak with clients this month and remind them how holiday visits can also be an important opportunity to check in on aging parents and older relatives with an eye toward their potential LTC needs. Where should they start? Here are a few things to keep in mind before hosting a LTC discussion with family.
Evaluate how loved ones handle everyday tasks or activities of daily living. Are they struggling to get dressed or bathe without help? Are they able to lend a hand in the kitchen when preparing a holiday meal or feed themselves during dinner? If visiting a loved one’s home, be sure to also check how they get around the house – including up and down stairs – or if the home presents any safety issues.
Simply asking, “How are you?” can start a conversation that sheds a little light on everything from daily issues to recent doctor visits that give a clearer picture their health. Also, simply observe if they are maintaining their personal health and well-being.
Consider their emotional state. Do they have a positive attitude or do they require encouragement to accomplish ordinary tasks? Are they still interested in their usual hobbies or activities? It’s also a good idea to be on the lookout for red flags such as memory lapses that disrupt their lives. Examples include struggling with vocabulary (such forgetting names of relatives or household items), misplacing belongings and finding them in odd places, or repeatedly asking the same questions.
Know the Facts About LTC Planning
When you’re preparing clients for potential LTC discussions, don’t send them away empty handed. While most Americans understand the likelihood of needing care, more than 75 percent age 30-65 think they should know more about LTC coverage. But don’t wait until it’s too late for choosing LTCI. Individuals who are already showing the types of symptoms or red flags noted above are often too late to be considered for LTCI coverage.
In order to create a plan that provides the right protection and care options for themselves or for their family, your clients need to understand how much long term care could cost and their options to pay for it. For many, the first step in learning about potential solutions like LTCI involves learning the basics. Start by shedding light on a few common misconceptions.
“We can rely on a government program for long term care”
Government programs often don’t meet LTC needs. Medicaid can help pay for some LTC services, but only under certain circumstances due to requirements about which LTC services are covered and state-specific poverty guidelines, which can require a family to spend-down their assets. Medicare is a senior health insurance plan that covers skilled care designed to improve an individual’s health condition. It does not cover custodial care. Additionally, these programs often don’t provide home care.
“I’m covered because I have health insurance”
Long term care is the assistance, care or services a person needs when they are unable to perform basic activities of daily living – such as bathing, dressing or eating – a need which often increases over time. To help explain long term care, think “care vs. cure.” This type of care is not covered by health insurance plans, which are designed to cover skilled or acute care needed to return someone to good health. Therefore, long term care generally focuses more on caring than on curing.
“We can pay for long term care with our savings”
It can be very difficult for most individuals to save and pay for long term care costs on their own. Paying out-of-pocket for just a few years of long term care can quickly deplete a lifetime of savings and threaten a retirement decades in the making. The average annual costs for long term care services nationally are:
- $20,800 for care at home (based on a four-hour visit, five times a week)
- $42,000 for care in an assisted living facility; and
- More than $87,000 for care in a nursing home
Considering that the average need for long term care is three years, it’s easy to see that most people will have a harder time affording long term care services without insurance.
“LTCI only covers nursing home care”
Many LTCI plans provide the flexibility that allows policyholders to receive care in a variety of settings, such as their own home, adult day care, hospice care, an assisted living facility or a nursing home. Alternatively, waiting for a crisis or going without a LTC plan severely limits one’s options for choosing where care is received.
“We can’t afford LTCI”
Without insurance, your clients may have a harder time affording long term care services. Many LTCI plans can be designed to fit a range of personal budgets and benefit levels to fit personal needs. Having some protection from the financial demands of long term care is better than having none – it doesn’t have to be an all-or-nothing decision.
“We can take care of each other”
Family and friends play an important role in long term care situations. According to AARP, more than 42 million Americans provide care to an adult with limitations in daily activities. This care, when prolonged, can result in significant strain on the caregiver – physically, emotionally and financially. LTCI can help support and supplement such informal care, as well as ensure care is received if a spouse or family member isn’t physically capable of providing care.
Another Opportunity: What’s Their Plan?
There’s a reason that LTC planning has become a hot topic for baby boomers. If you’re having this conversation with your clients, there’s a good chance they’re part of the sandwich generation – individuals (mostly boomers) who care for both their own children and their elderly parents. Use this opportunity to make sure they’re keeping their own financial objectives in mind and ask them to consider how LTCI fits into their retirement plans.
After all, another common misconception is that LTCI is only for older seniors. Putting off LTC planning, however, can be a costly mistake. Age and health make a big difference when applying for LTCI, so the earlier your clients start planning for long term care, the better. In general, applying at a younger age will help make LTCI more affordable and provide more coverage options (the average age for new LTCi applicants is 57).
Be a Conversation Starter
Long term care doesn’t have to be an overwhelming experience. Unfortunately, many families often don’t discuss care options for loved ones until there is an LTC event and care is needed – which leads to hasty decisions that might not produce the best options and, in turn, can impact the entire family’s financial, emotional, and physical health. That’s why planning ahead and including solutions like LTCI is crucial to ensuring care can be received in a preferred setting, such as at home, and reducing the serious consequences that the demands of care can have on a family.
Start a LTC conversation with your clients. Remind them that while the holidays are often enjoyed in the company of family and friends, catching up on the year’s events and reliving fond memories, it might also be the right time to have an honest discussion about LTC planning and how solutions like LTCI can ensure their family’s health and financial needs are met.