By the time you hit age 40 you should have saved some money for your future retirement. The problem is too many people forget to protect those retirement funds from the high costs of Long-Term Care. The US Department of Health and Human Services says if you the reach the age of 65 you will have a 70% chance of needing some type extended care service. Health insurance, Medicare and supplements will only pay for a small amount of skilled services and only for 100 days. They will pay nothing toward custodial services (help with activities-of-daily living) which most people will need as they age.
Often this means crisis management. Family members become caregivers. Caregiving is hard but when a family member must be a caregiver it adds more dimensions. This usually means the responsibility falls on the lap of a daughter or daughter-in-law. They generally have their own career and family responsibilities. Not to mention the emotional hardship that ties into a family member being a caregiver.
The financial costs and burdens of aging will impact your savings and your family. Affordable LTC insurance will safeguard your assets and ease the burden that is placed on family.
There are very few true specialists in long-term care insurance. This means you should seek the help of a true Long-Term Care Specialist. This person should have at least three years’ experience in Long-Term Care Insurance, represent the major insurance companies and have at least 150 clients with Long-Term Care Insurance.
Most financial advisors and general insurance agents do not have the skills required to design an affordable plan based on your specific needs. Plus, they usually do not understand underwriting requirements which each insurance company uses to determine if they will even offer a policy to you. They generally have never experienced a claim, so they don’t have a full understanding of how these policies actually get used at the time of claim.
This is why I assist consumers nationwide using my unique process where a client views my computer screen while we speak on the phone. A number of other top specialists will do the same thing. The key here is asking many detailed questions about your health, family history, retirement plans and concerns. Most financial advisors and general insurance agents may ask only a few questions. This means the recommendations they may give you are not appropriate and may even cost you more money than it should.
Since they don’t deal exclusively in Long-Term Care planning they usually don’t understand the products and the positive impacts they can have on your loved ones. They also tend to over-insure. A true Long-Term Care Specialist will make the appropriate recommendations and consumers discover that LTC insurance is very affordable and adds a tremendous amount of peace-of-mind as you plan for your future retirements.
If you are speaking to someone about Long-Term Care Insurance be sure to ask a few questions:
How long have you been working with Long-Term Care Insurance?
According to the American Association for Long-Term Care Insurance (AALTCI) no less than three years is acceptable.
How many clients do you have with LTC insurance?
No less than 100 is acceptable says the AALTCI.
How many companies do you represent?
The AALTCI says no less than three.
How many claims have you been involved with?
The more the better, keep in mind a person working three years may not have had any claims yet despite having more than 150 clients. Ideally you want a person who has experience 15+ claims.
What is your general philosophy when you design a Long-Term Care Insurance plan?
Listen to how they answer the question and make a judgement if it sounds like it is well thought out.
Here are a few warning signs you should be aware of:
1. The agent or advisor sends you quotes without asking many questions. A true Long-Term Care Specialist will spend a lot of time asking detailed health questions and family history, in addition to asking about your future (or current) retirement plans. If they only take five minutes or less you should run away.
2. The agent or advisor immediately starts talking about asset based or hybrid plans without asking you many questions. These are life insurance or annuities with riders for Long-Term Care. They can be an outstanding way to plan for some people but anyone who brings this type of solution to you without asking many questions should be avoided.
3. The agent or advisor doesn’t explain the Long-Term Care Partnership Program. Not all states have active partnership plans in place but most do. If they don’t mention it be sure to ask. If they can’t explain it move on.
4. The agent or advisor doesn’t have a website, or their website has very little information available, it is usually not a good sign. True LTC specialists will usually have a comprehensive website with many resources available for education.
5. The agent or advisor suggests you self-insure and put money in investments. For most people this places your money in too much risk, doesn’t provide tax benefits and doesn’t reduce the burden placed on family since most LTC policies have case management. It may make the advisor money but you should be more concerned how it will protect your money and reduce family burden. If they make this kind of recommendation ask them to put it in writing. Then ask how their plan would really benefit you and your family from the financial costs and burdens of aging.