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The Continuum of Care

January 20, 2016 by Honey Leave a Comment

Forbes has recently done some outstanding, insightful reporting on long-term care (LTC). I am very grateful for this. It’s a welcome and deserved change from typical error-riddled LTC coverage.

Their contributor Wade Pfau, a professor at The American College and principal at McLean Asset Management, really “gets” LTC. More importantly, he has a writing style that makes complicated concepts clear and simply understood by readers.

In is January 7, 2016 column he lists and describes the LTC continuum. I don’t remember ever having seen it laid out so clearly and accurately.

He explains why Medicare only pays for short duration skilled needs under certain conditions. He explains the difference between skilled and custodial care. It’s custodial care that is bankrupting so many Americans financially, emotionally, and health-wise.

He lists excellent questions to ask of facilities.

I am very grateful for Mr. Pfau’s columns. They do the public a true service.

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!

Long-Term Care Insurance Can Be Costly but Effective

December 26, 2015 by Honey 1 Comment

Why doesn’t this New York Times article report on what its title promises it will, which is the effectiveness of long-term care insurance (LTCi)?

While being factually correct, this article puts the wrong “spin” on things.

It starts by giving the wrong title. LTCi is not necessarily costly. What can easily be far more costly is needing long-term care for anything but a short length of time and not owning LTCi.

The article “hooks” readers in the first paragraph by describing how LTCi preserves wealth. From there, this article gives readers excuses to avoid responsible LTC planning.

The truth is, the most important reason to own LTCi is not to preserve wealth. It is to preserve family integrity by reducing family resentment, stress and discord. The fact that LTCi also preserves wealth, and does it so well, is “icing on the cake.”

Families and governments are in budgetary crisis due to skyrocketing LTC costs.

Reporters and editors need to get the above perspectives corrected. Reporting needs to be done – now – on the hundreds of thousands of families collecting from LTCi and the radical qualitative difference that LTCi creates in their lives.

Here are some examples of the harmful “spin” I’m talking about:

The article hints that Ms. Cheng’s father is collecting enormous amounts from his LTCi policy, but it is not explicit about this. Why not? Why isn’t any space devoted to describing the extraordinary, qualitative difference LTCi has made not only for Ms. Cheng, but for her father?

Does Ms. Cheng own LTCi herself? Her advice about needing correct professional assistance with choosing LTCi, having a holistic outlook about the role of LTCi in estate planning, and asking children for input and help is sage. The reporter (Mr. Wasik) should have asked her to comment about her own LTCi (if she doesn’t own LTCi, I just don’t understand why not, based on her personal experience and how wise she seems to be).

Instead, Mr. Wasik sidetracks readers with some “red herrings.”

There’s an irrelevant sentence describing how Keith Singer recommends clients with more than $500,000 should own LTCi. (I doubt he has any clients with less than a $500,000 net worth; most financial planners don’t.) This sentence is harmful to readers, giving lower net-worth people one more excuse to dissuade themselves from doing responsible LTC planning. Such people are far more prone to catastrophe resulting from unplanned LTC needs. Here’s a story about a solid middle class couple with a 0,000 net worth that was devastated by unplanned LTC costs. This couple probably could have purchased very reasonable LTCi while they were insurable.

This sentence does not report on the effectiveness of LTCi (as the title purports) and is again potentially harmful to readers : “After a 90-day “elimination” period (often partly covered by Medicare for people whose need for extra care is hastened by a stroke or other medical emergency), the policy covers all assisted living, community and home care.” This perspective is incorrect, and further goads the American public to avoid responsible LTC planning by hinting that Medicare might assist with LTC costs. Medicare-paid LTC is not only paltry and inadequate; most people are not entitled to it.

Shame on Mr. Wasik and the NYT editors, whom I otherwise hold in high esteem. For the sake of the American public, reporting needs to be done now on the extraordinary, qualitative, transformative difference LTCi has and will make for hundreds of thousands of us.

The Continuum of Care

Examining Long-Term Care Insurance

The Importance of Planning for Long-Term Care

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

Long-Term Care Insurance Can Be Costly but Effective

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