Archives for January 2016

Examining Long-Term Care Insurance

January 19, 2016 by Honey Leave a Comment

In his January 14, 2016 column, Forbes contributor Wade Pfau describes what traditional health-based long-term care insurance (LTCi) is. He describes what determines LTCi prices and gives sound advice on when to buy it.

Mr. Pfau has keen insight that enables him to make complicated things easy to understand.

I love that Mr. Pfau hints at what can happen psychologically to affluent families who must self-insure when a LTC event occurs. He describes this in more detail in his December 22, 2015 Forbes column.

I also love the fact that Mr. Pfau is a financial planner. Far too many financial planners, just like the public in general, do not address LTC planning. After all, LTCi is complicated, and planning for it is a highly unpleasant subject for many.

He states, “At some point, wealth may be sufficient to self-fund long-term care expenses, but reasonable individuals may still decide to include insurance in their plans as part of an overall risk management strategy.”

An unforeseen, expensive “spending shock,” caused by an unplanned long-term care event, can wreak unnecessary, avoidable financial, mental, and physical havoc on families and estates.

The Importance of Planning for Long-Term Care

January 13, 2016 by Honey Leave a Comment

Forbes has recently published some explicit, straightforward and accurate columns on long-term care (LTC). These columns are a great service to the public and a refreshing break from the typically neglected, error-riddled, negatively slanted coverage of LTC.

Wade Pfau is a professor at The American College, Principal at McLean Asset Management, and Forbes contributor.

Mr. Pfau is my new LTC hero!

In his December 22, 2015 Forbes column on the importance of planning for LTC, he states most retirement income planning is focused on income needs and market volatility and longevity.

A major retirement risk, which receives far less coverage and is often ignored, is that of spending shocks: having to spend significantly higher amounts than planned. Mr. Pfau states, “Long-term care (LTC) spending represents one of the most severe spending shocks that can impact retirees.”

He continues, “An expensive LTC event could derail an otherwise well-built retirement plan. This problem is growing as people are living longer, since it becomes more likely that care will be needed for longer as well. Older individuals suffer from higher rates of physical and cognitive problems, and they may have fewer family members or friends who are in a position to provide sustained daily assistance.”

I love that Mr. Pfau also accurately describes the psychology of denial that causes the failure and refusal to properly plan for LTC. He goes on to explain that lack of LTC planning “can create strains as long-term care depletes household assets, bankrupts a surviving spouse, or adds burdens for other family members who may end up making large sacrifices to provide care.”

Mr. Pfau then continues to clearly, accurately describe what LTC is.

I am very grateful to Mr. Pfau and believe this column is of great value to readers.

You Can’t Insure A Barn Once It’s on Fire!

January 5, 2016 by Honey Leave a Comment

The following is a guest blog by my dear friend and trusted colleague Tobe Gerard of www.tobegerardinsurance.com:

During Chanukah, my brother-in-law greeted us with the unexpected news that he had been diagnosed with Parkinson’s Disease. He is 62. As we were coming to grips with his diagnosis, whispers at a holiday party related that one of our favorite neighbors had also been diagnosed with Parkinson’s Disease. He is 60. Last week, while attending a seminar, I ran into an insurance colleague who I haven’t seen in 10 years and he mentioned that he too has Parkinson’s. He is 59. These ages are all the norm for the onset of PD.

According to the Parkinson’s Disease Foundation, there are 1 million Americans who have PD, with men more than 1½ times more likely to have PD than women.

My brother in law and our neighbor are both divorced with no children. I had discussed long-term care insurance (LTCi) with each of them 10 years ago, 5 years ago, and even 1 year ago. Here’s the gist of our most recent conversation: “I’m asking this, but I already know what you’re going to say. It’s too late to purchase a policy – right?” Unfortunately, the answer is always: “Yes, it’s too late.” With the work that I do, more and more people are asking me that same question, and the only answer that I have is: “Yes, it’s too late.”

Dread diseases such as: Parkinson’s, Muscular Dystrophy, MS, ALS, and early onset Alzheimer’s, are rearing their ugly heads younger and younger. Your clients don’t have to have a family history with any of these to be hit. Encourage your clients to consider LTCi around the time they turn 50; waiting until they are in their 60’s can be risky business these days in LTCi land!

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Archives for January 2016

Examining Long-Term Care Insurance

The Importance of Planning for Long-Term Care

You Can’t Insure A Barn Once It’s on Fire!

From My Blog

Podcast Illuminates LTC Need

LTCI is Magical at Time of Need!

Testimonials