Senior Living Today

Long-Term Care Insurance: Plan Early and Future-Proof Your Finances

• The Ohio Masonic Communities • Season 4 • Episode 11

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If you’re 65 or older, there’s a 70% chance you will need long-term care at some point in your life. Without preparation, long-term care can be a financial burden and source of stress for you and your loved ones. Thankfully, long-term care insurance can create financial security, improve your quality of life, and more. Hear an insurance professional explain everything you should know about long-term care insurance. We’re covering why you should have a policy, when to get one, what happens if you don’t have it, what it covers, how to find the right plan for you and your loved ones, and more. 

The Ohio Masonic Communities' Here to Help guides cover everything from what Alzheimer's is to what senior living community and contract types exist and more. You can access your free copy of the guides by visiting omcoh.org/sltguide. 

(music) Hi everyone. Welcome back to another episode of Senior Living Today. With me today is Cameron Titlow. Cameron, we're so excited to have you join us today. Yeah, thank you so much for having me on. Since this is your first time on our podcast would you mind just telling our listeners a little bit about yourself and your background? Yeah, absolutely. I'm a insurance agent here in Dayton, Ohio, and I moved from central Illinois a little over six years ago to, to be here. So I'm not born and raised in Ohio, but Dayton is now my home and plan to make it that way for a long time. I've been working in insurance since 2012. And, it's kind of all I've, I've known for the past decade or more. So, I have a wife and a daughter. My family keeps me busy and I guess my work does too, so. Well, I think you're going to be the perfect guest for today's episode. Because today we're actually going to be discussing long term care planning and why that's so important for older adults to consider as they plan for retirement. So long term care planning involves the preparation for the possibility of needing assistance with activities of daily living, whether that be due to aging, illness, or possibly disability. It encompasses the financial, legal, and social aspects to ensure that a person receives the necessary support and care that they need, whether that be in their home or in a different location such as a senior living community if the need should arise. So long term care has a multitude of benefits for both the individual needing care and also their loved ones. Can you walk us through what some of those benefits are, Cameron? Yeah, I think one of the biggest benefits is financial security for not only the individual themselves who may end up seeking long term care and help with that, but also their families, their kids, their grandkids. Without a plan in place that burden just falls on the person themselves or their loved ones. So it's definitely something that that people should have a conversation with a professional about just to see what their options are. The statistics in the U.S. for the last, you know, several years have said that those 65 and older have a 70% chance of needing long term care in their lifetime. So I think with that likelihood it's something that it should absolutely at least be a conversation with a professional or at the very least with family to, to figure out, hey, you know, if or when we need this how are we going to pay for this? Because trying to figure that out when when somebody really needs that, that health care and that help is a really hard time to do so on family and can stress, can stress people, so. And I think one of the biggest questions people have is when is the right time to begin having those conversations and planning for long term care? Yeah, I think the earlier the better. Like most things with insurance it's it's a lot harder to get the help when you, when you already need it. So planning ahead is, is really important, especially with just the, the cost of the health care itself, the cost of, of getting coverage to help pay for it is also not inexpensive. So the earlier that families can have a conversation the better. But, that way is as people age they can kind of plan for what their quality of life may look like and how they would want help. Do they want help in the home? Would they want help in a professional facility? And so planning that things out ahead of time makes it so that you don't have to rush decisions when or if the time comes. Yeah, I think that's such great advice. I think a lot of times we'll see families where they're kind of in crisis mode and they need it in that moment. And when you're planning ahead, that really does take a lot of the stress out of those moments should they arise. Yeah, absolutely. So there are also like several key components to long term care planning. Would you mind walking our listeners through what some of those aspects are? Yeah. So some of the things that that people would want to consider, I think first and foremost is that that financial burden. Providing some peace of mind with, with financial security, knowing that, hey, we have something to help pay for this. But things that people need to take into account as they're looking for

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budget will will obviously be a very big one. Is there anybody else that that can help out with this - family or others who may be having to help pick up the bill anyways, so I again think instead of waiting for something to potentially come and and having to figure it out then having those conversations with families can help them go a long way. Planning things like family history. Just so many things seem to run in families, whether that's sickness or length of life. And so, you know, my parents, for example, are a good example of that. Neither of their parents lived past 83. Neither of their grandparents live past 80. So as my parents kind of did their planning, even though I expect that they'll live longer than their parents or grandparents did, they have it in their heads that, you know, they may not make it to 90. So that changes some of their planning a little bit. But all these things we're going to have to take into mind, as well as just people's current health. There's typically some qualifications and underwriting that needs to be done. So those that may have just like in other forms of insurance, those that may have preexisting conditions or ongoing things already that are more likely to use long term care, more than likely going to have to pay more for it. But the only way to really find out is, is to get together with a professional and talk about the options available to you, and pretty much every place is going to do that at no cost to you. So having the conversation and planning won't cost you anything. Putting a plan in place will. But I don't think that burying the head in the sand and just kind of “we'll cross that bridge when we get to it” is the best idea. It's just going to put stress on families when, you know, planning this thing out can help provide a lot of peace of mind. Absolutely. And I know we've talked about some of the benefits of planning and long term care insurance, but there also are some drawbacks to it. And it might not be right for everybody. For example, you know, there is a high cost of premiums that needs to be considered, especially with the risk of increasing over time can be, you know, a deterrent for some people. There's also a chance that you could pay those premiums for years and never need to use the coverage. So can you walk our listeners through maybe what some of the drawbacks are to having long term care insurance? Yeah, I think you definitely nailed some of the the big drawbacks there. The the premium is one of those. And actually as we were we were scheduling this and talking about it one of the things I brought up is that, you know, no, no companies truly offer a standalone long term care policy anymore. Most often what you'll find is, is something like that would be wrapped up in an annuity or a life insurance policy or some other type of product as kind of a benefit or rider. But, far and away the biggest one is cost. I would say another drawback is, is that it's not truly a standalone policy. So if you're going to look into this, you're probably also going to have to look into some other things such as your your finances, your retirement, life insurance. Because more likely than not, in order to get some type of long term care coverage, you're going to be wrapping it up in some type of thing that is going to be there for your retirement or life insurance anyways. There may be a few companies out there that offer a true standalone long term care policy, but it will be really expensive. The underwriting will be pretty tough, and I would expect that those those rates in that cost continue to climb as the cost of that health care continues to climb. There is also that use it or lose that type of mentality where you could plan for this, you could pay the premiums and you can never end up needing it or using it. Like many things, though, I still think having a plan in place in the event that you needed to use it is is better than then just, you know, well, 30% of people may not use this so maybe I'm going to be one of those people. I still think having a plan in place is is necessary. And then along with not having a true standalone policy anymore every policy is going to have limitations. A policy for long term care or a rider that's wrapped up in an annuity may have different benefits or qualifications than one that's tied into a life policy compared to one that's tied into another product. So I think more and more now you won't find long term care policies that are so cookie cutter between companies. They’re gonna have a lot of their own differences, positive and negative, which is why I recommend getting with a professional who can point out, you know, here's the benefits of this, and here's the drawbacks. Here's another way that we could look at potentially helping provide this coverage. But here are the benefits. And here are the drawbacks. And so I think now more than ever you need somebody who can help walk you through the ins and outs of the policy and how it would work when coverage would kick in. How long you'd have a deductible or have to pay out of your own pocket before help would be provided? So all of those things are reasons that maybe there are some drawbacks to having some long term care insurance. Those are the biggest ones that that jump out at me. I know we briefly mentioned that that based on health, there can be some qualification hurdles too. Very similar to like a, a life insurance policy there's going to be underwriting to see where your health is at today. How likely is somebody going to end up needing this coverage and those that have ongoing things are going to find coverage more expensive, and those that don't have as many ongoing things are going to find coverage cheaper. But I think either way it's going to be pretty expensive. There are a lot of alternatives out there right now, though, and I think that's one of the benefits. Because previously if you were looking to get long term care coverage, you know, you had to get a long term care policy. Since so much of that is wrapped up into other types of products nowadays. There's a ton of options. And some of them may coincide with some of your other goals or long term planning that you're doing regardless anyways, so it's a great idea to at least have that conversation, see what options are available to you. But I do think that that is one of the benefits right now is there are a lot more alternatives and options than maybe there was 20 or 30 years ago. So what are some of the reasons that you frequently see individuals or their families seeking out information on long term care insurance and planning? Yeah. And I can expand on these a little bit, but I would say the the biggest reasons that we see people seeking this out

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protecting your assets, your financial security. Making sure that, you know, if you end up having to go into a facility or end up having a lot of hospital bills and other health care bills that you have a way to pay for it that's not just your checking account or taken from your retirement or other assets. So protecting what people have worked so hard to, to make and save during their lifetime and, and things that they've purchased and own - homes, houses, cars, whatever it may be - is a big reason that people look into the long term care. Another big reason is always just going to be the quality of life. Long term care policies are designed to help pay you, not a health care provider. And so the money is there to use it as you see fit. We don't, you know, say, hey, it has to go to this type of facility. And so it does give people more options. So that if they want in-home health care, which may be more expensive, but provide somebody independent living that's an option that they have. You know, they could also go into a facility, but, maintaining the quality of life that, that the individual wants to continue to live and, and frankly, what I see most is most people want to stay in their home. And so if you aren't having a plan in place for kind of that long term thinking, it makes it harder to stay in the home when you end up needing that help or care. Other reasons, along with the protecting assets, financial security is, is minimizing the financial burden that this may have on kids or grandkids, people that you rely on for help. And so having this, this plan in place or having a plan in place can absolutely help minimize the burden that families feel. And along with that the stress and everything that comes with that. When you have to make decisions quickly and without a prior plan in place, typically things are going to be a little bit more tense. You know, second guessing, did we make the right decision? Is this what's actually best? What do we need to do? And so trying to figure that out on the fly is always going to cause more stress and a bigger burden on families than having a plan in place, even if that plan ends up changing. So that can help provide a lot of peace of mind for the individual themselves, their families. Just having, you know, some type of plan or conversation in place. And the other thing that people plan with the long term care is, like we talked about, some people already have ongoing health issues, or some people may have helped an elderly family member or parent, aunts, siblings, somebody else through this already, and sometimes they have their mind made up on “well, I don't want this to happen.” And so without putting a plan in place and talking with your family and loved ones about that, you need to express those wishes for here's what I would like to do in the event that something happens. But there are also those that are due to health issues or health reasons don't have the luxury of of making all those plans. They're going to have to do the health care that's available to them at the time. So I especially think those that have ongoing issues that know I'm more than likely going to end up needing this than maybe my neighbor who doesn't have all these health issues is a big reason that people get together and plan. So if they already need some type of help or, you know, maybe it's mobility related, those types of things factor in too that we have to figure out, hey, how is this going to work ten years down the road if you end up needing more help with with mobility, daily living, whatever it may be. I know we talked a little bit long term care insurance might not be right for everybody. There are certain instances such as, you know, age or family history that might need to be looked at. So who should be considering long term care insurance? I really do think everybody should be considering it. I think age is a pretty great equalizer in that, that nobody can escape from that. So I, you know, even somebody who that was kind of in peak health at 65 getting ready to retire I don't think it's a conversation that should wait until they start to see their health decline. So as early as, as, you know, 45, 50 years old especially, you know, 50 to 65, those, those approaching retirement or considering retirement, these are absolutely people that that need to be having that conversation. The more time that you have to actually, you know, explore your options and make a thorough decision helps you make a better decision and give you greater peace of mind with your decisions. So also, individuals that already have either an illness or have a family history of illness, whether it's dementia, Alzheimer’s, anything like that that that typically would require help with activities of daily living. Those are ones where, you know, my family hasn't had to deal with really much of, of dementia and Alzheimer's, but my wife's family, you know, on her mom's side, that seems to be a common thing, you know, going back to, you know, her great grandparents. And so it's more than likely that, you know, somebody in her family is also going to be dealing with that. And so having the the time to actually have an open conversation about that and at least playing for it is really important. Also people who have significant assets to protect, you know, whether it's a home or a retirement, savings, whatever it might be, those are ones that they want to make sure that that money was set aside for living and paying bills and helping taking care of of all of that. And it's, you know, one common thing I talk about with people is if you have this pile of money and and whatever it's in-retirement savings, assets, anything like that, is it worth taking a little bit of that money at the bottom that you may never spend in order to help protect the whole stack? Because if we don't think about protecting the whole stack, you know, there could be whether it's a health crisis or a family emergency, there are things that can very quickly use up your funds and your money that you had planned for other purposes. So. And I would say another big one is those who want to be independent and maintain independence and make their own decisions. When things get into kind of that crisis mode of, hey, we, you know, mom or dad needs help and we need to figure this out right now, some of the, the wishes of the individual themselves gets put to the wayside a little bit because the number one thing we're thinking about is how do I help take care of of a loved one and get them the best care. But oftentimes we find from some older long term care policies when claim time comes, there is a lot of times where there's a bit of a disagreement as to what the individual wants versus what the family wants. And so having that conversation out on the front end helps give you a better idea of, hey, here's my wishes, here's what I would want. And that doesn't mean that it always ends up being practical or possible, but at least discussing that so that if somebody wants to stay in their own home that they've been in for a long time that they have memories of, gives them a better ability to do so if they plan for that. And I want to go back to something that you touched on a little bit earlier. So long term care planning really gives the individual options as to where they can receive some of those services that they need. So this can be, you know, community based care or even in-home care. Can you talk a little bit about the different options that can be available to them through long term care insurance? Yeah. So there is a lot of different types of care. I think what is most traditionally thought of is some type of assisted living facility is what many people's minds jump to. But I would I would say from our end when I see people actually needing to use this, far and away what what most people want is home health care. They want to stay in their home. They want to have a nurse or somebody come by, you know, if it's daily, every other day, a couple times a week and help them with the things that they need help with. For the most part, I think, and I would probably feel the same way, most people want to stay in their home versus go into a facility. It's just a lot of change, giving up some independence. So people want to stay in their home so that home health care is, is an option where skilled nurses are going to come in and help you with your activities of daily living, make sure you're taken care of, check on you and and help out. So, that is probably the one that people want the most. Along with that, you're going to have like your home care or your personal care is most often going to be helping with the activities of daily living. So things like eating, bathing, dressing, cooking, cleaning, getting to and from A and B or all of those big things. Another thing that we often see and when we don't have a plan in place, or in some people this is the plan, but a lot of times that home health care ends up being a family member. And so, somebody who's coming by and helping mom or grandma, dad and grandpa, helping them out with just all the things they need on a daily basis. There are some really great benefits to that, too. Just family taking care of family. But the big downside is, is it is a big time, financial burden, and commitment on those family members. There are also going to be things like an adult daycare. So kind of like senior, senior centers and places for people to go and get a little bit of community, get a little bit of help with with things that they need done.

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just kind of provide a little bit of support and community for, for people all of similar age group, activities to do together. But it also gives them care, medical support and some others checking in to just say, hey, you are are you okay? How are you doing? And then there's also going to be facilities. Those facilities are sometimes long term, and sometimes they're short term. So, you know, examples would be somebody falls and breaks their, their hip or breaks a back. And for some people that ends up resulting in a longer stay. For others, maybe it's six months in the facility where they can get back on their feet and get moving better before they're they're sent back home and enable to resume, you know, living at home there. So there's a lot of different ways that health care can be provided. Some of those are going to be more expensive than others. Facilities and at home care are absolutely going to be two of the most expensive. And I would say oftentimes a way that that families kind of Band-Aid that large expense is through just care from the family themselves, and help from the family themselves. So when someone decides that it's the right time for them to consider purchasing long term care insurance, who should they talk to? Are there resources out there for that, or what's your advice for those who are in that next step? Yeah, I think anybody who's in that next step a great place to start is to maybe just ask somebody who has gone through it before if if you know of somebody or somebody who's recently gone through that planning. They would most likely have somebody that they could introduce you to that helped them with that conversation. Now, of course, you can go online and and go, go search for that and find professionals that you can talk to in your local area. But also reach out. I mean, most people will have home and auto insurance. So reach out to your current company who has that. If they do not have options to help out with your long term care planning, they would likely be able to point you in the right direction. But but I think getting introductions from just friends and family, people you already know is a great place to start. You can go online and and do some searching and find maybe a provider or an insurance company that that can help have that conversation with you. And I think assuming that you're able to, the best thing to do would be to go in person and do it together. And that way you can sit down with somebody and look at everything they have to offer. I think it's a lot easier to ask questions that are on your mind in person than it is maybe over the phone or through email. It's also a lot easier to check for understanding. Just make sure, hey, some of these terms may be a little bit different than what we've seen in insurance before. And so knowing what those terms are, how the policy coverage is used, when it can or can't kick in, what types of things it can or can't help with, finding out all those limitations is huge. So, going to find a professional in person that you can talk to would be my biggest recommendation. And that conversation can start over the phone and then transfer to in person. I would also absolutely recommend bringing somebody with you that may end up being a part of that process later. So whether that's a kid or a sibling, some other family member or a loved one, assuming that you're okay with that bringing them along to at least be a part of that conversation so that years down the road, if and when they end up needing things, they're a little bit more up to speed on, on what is in place, who to contact, where to ask questions and get answers. So, you know, don't go and just try and do this by yourself. Bring somebody who may end up be helping you out for when that time comes from needing long term care help. Yeah, I think that's such great advice. Cameron, I just want to thank you for joining us today and sharing all that information with our listeners regarding long term care insurance and the planning process. I think you shared a lot of insightful pieces of information today, and hopefully you've encouraged some of our listeners to take that next step and start exploring their options as they age. Yeah. Thank you so much for having me on. And I think it's an important topic to, for people to plan around. And so absolutely reach out to a professional, find somebody who can help out and help answer your questions and give you and your family some peace of mind. Absolutely. For our listeners, please be sure to like and subscribe to the Senior Living Today podcast so that you never miss a new episode. And we will be back again in two weeks.(music)

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Alexandria Rohrbaugh

Host
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Cameron Titlow

Guest