What your Investment Strategist, Financial Planner or Family Lawyer May Not Tell You…



David Myers

ABOUT A YEAR AGO, when I was interviewed by the Family Entertainment Network on the dour subject of Long Term Care, the main thrust of the conversation was that no one discusses it until it’s too late: “What do we do now… that a parent, companion or spouse needs help?”

Long term care also happens to be very much a women’s issue. Researchers in the New England Journal of Medicine recently wondered why 52% of women appear to need long term care in a nursing home, while only 35% of men do, since that didn’t support medical statistics indicating that the need should in fact be gender-equal. But 17% fewer men end up in  the nursing home statistics because their wives were their long term care plan, and no money was left for him to have nursing care, or for her to be at home, either cared for by aides, let alone as the caretaker.

Most of the time, when I call a family to talk about long term care, the husband  tells me they’re not interested—after I’ve already spoken to his wife for half an hour. Often, the wife was surprised how much less it cost than she thought (people think the annual premium is the monthly one) and asked me to email them more information—which the husband then sometimes intercepts.  Once again, long term care is nipped in the bud, as in denied.

The critical point that often gets missed is that you don’t get a long term care plan now because you might need it anytime soon. You get a plan now because the odds are overwhelming that you will need one eventually (the federal government estimates that at least 70 percent of people over age 65 will require some long term care services). And at some point, you might not be able to qualify for any long term plan policy, which could  be catastrophic not only for the spouse who needs care, but  the one who’s left behind at home, struggling with the family’s financial resources diminished, or gone. Many large insurance carriers, like Prudential and MetLife, have already backed out of the long term care this business, which indicates how consumer-friendly the plans were. Too good to last apparently…

The companies that still offer long term care policies are likely to scale back the benefits they offer, which is another reason that many financial publications suggest  jumping on these insurance contracts available… now.  They’re contracts—the people who get plans that work in their favor will keep them.

Besides, from a purely financial planning standpoint, it never pays to wait. If you wait 10 years to get a plan and use that plan in the next 10 years, you’ll end up paying twice as much in those 10 years than if you already had one now, and paid for the prior 20 years. Furthermore, your daily benefit will be about two-thirds less than if you purchased a plan 10 years ago and allowed your benefit coverage to grow over that period.

Finally, if you think your assets are safe from Medicaid if kept in a trust, think again. Take a look at a March 2010 Elder Law Review article about Medicaid seizing trust and life estate assets to recoup its expenses, 5-year look back or not. The days of Medicaid providing in-home care are fading with budget cuts, and many of us are going to end up in any facility Medicaid chooses.

The moral of the story:  if you are in your forties or fifties and are thinking about long term care… act soon.

David Myers is the founder of Reality Unlimited, which specializes in improving how people work and live. He has led three national companies’ sales organizations in different industries, taught every level from 1st grade to post-doctoral psychologists, spoken at business conferences far and wide, and interviewed luminaries throughout the arts. Contact: get2learn@optonline.net.

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