My good friend and client Bruce had good intentions of taking care of his ailing 80-year-old father who came to live with him. After all, Bruce is a teacher and has summers off; however, after three sleepless nights while trying to provide care for his dad, Bruce hired help. Seven years and $600,000 later his father passed and during that process Bruce came to clearly understand that even though his health was excellent , one day it would change and the last thing he wanted to do was burden his daughter and spend down his life savings as his father had done. At age 51, Bruce decided to buy long term care insurance.
Understanding LTC insurance is like learning a new language. There are moving parts and decisions to make. In general, you can think of it as buying a pool of money or leveraged dollars. Over a thirty year time frame Bruce will have paid $51,000 in premiums and will have a benefit worth $820,000. He hopes he will “waste” every premium dollar and never need long term care, but just in case, he now has a plan for his future, which has also bought him peace of mind.
My goal is to EDUCATE my clients and that is what I did with Bruce. I guided him through this difficult process, and helped him realize that because one’s health can change in the blink of an eye, there is a real need to formulate a backup plan today.
I worked with Bruce in a unique way using state of the art software and an easy to use screen sharing program to educate him on the issues and definitions of LTC insurance. Once we completed that process I showed him all the insurance companies available to him in his state. Every insurance company selling LTC insurance appeared on his computer screen, from the least to the most expensive .Last of all, I explained to him how the benefits differed among the different companies. I completed this whole process with Bruce without ever entering his home. When his policy was approved, I delivered it to him.
So you may ask, was Bruce the right age to buy LTC insurance? Absolutely! The younger you are and the better your health, the lower the premiums. My youngest client is 38 but most of my clients bought their insurance in their mid-40s to mid-50s. If you wait too long certain health conditions become uninsurable.
I must admit that it was well over a year after his father’s death that Bruce bought his policy. The next year his 80-year-old aunt passed, but in addition, his 45-year-old sister was diagnosed with breast cancer and also passed that year. Any lingering notion of denial, of believing that he will never need care, quickly left his mind. Our health does change without warning. My good friend truly had a difficult year.
I ask you to put on your “business hat” and look at all the assets that you have accumulated over your lifetime as YOUR business. Long term care is the greatest risk you will face down the road. Does it make sense to protect against this risk?
Richard Herman has been in the insurance business for 30 years and has specialized in LTC for 15 years. He can be reached at (413) 519-1786 or richard.herman@ltc-associates.com.
