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Why We Avoid the Hard Stuff: The Ostrich Paradox

October 17, 2018 by Honey Leveen Leave a Comment

ostrich burying head in sand ignoring problems

We fail to evacuate when advised and then we rebuild in flood zones. Helmets aren’t worn. We avoid the risk of “crying wolf” instead of sounding the alarm. In the face of certain disaster, many of us avoid the hard choices and bury our heads in the sand like the fabled ostrich. [BTW, that’s totally a myth.]

We also go to great lengths to avoid talking about long term care planning. Of the millions of Americans who qualify (by age and income criteria), only about 10% actually own long term care insurance (LTCi).

In his recent Forbes column (Sept 2018), Howard Gleckman reported on this avoidance behavior. He wrote,

“Americans are unable to plan for a catastrophe, even one we know is coming. Our brains cannot, for some reason, process this. Thus, in the face of an approaching calamity many of us…do nothing.”

There’s a Storm Coming

The residents along the Carolina coastline, for example, were given multiple warnings to evacuate before the arrival of Hurricane Florence. Despite the mandatory evacuation orders, many people chose to ignore the oncoming danger and stayed in their homes.

The Queen of Soul, Aretha Franklin, suffered from pancreatic cancer for years. Despite her worsening condition, she never made a will, leaving her $80 million estate vulnerable to hefty taxes before her children receive any inheritance. All because she never faced the need for advanced planning.

When We Avoid Information

“A person should never avoid information, because information can never hurt a decision”, states economist Joshua Tasoff. And yet, we go to great lengths to do just this. Listen to why in this wonderful Hidden Brain podcast.

Denial defies logic. Because it’s strictly emotional.

Mr. Gleckman refers to a book called “The Ostrich Paradox: Why We Underprepare for Disasters“, by Robert J Meyer.

From this book and Mr. Gleckman’s column, here are some reasonable explanations of why we often behave irrationally in the face of coming disaster:

Excessive optimism: They know the storm is coming and still believe that, magically, they will be unharmed. They see an aging population getting older and more frail and still believe that their own experience will somehow be different.

Herd thinking: Nobody else is preparing, so why should I? Saving isn’t sexy. Let’s plan our next exotic vacation!

Myopia: It’s easier to focus on our short term needs and desires. Planning for the long term might require sacrificing our current wants and channeling that money into some prudent investments. That’s inconvenient. (Oh, the stories I could tell you about this one.)

Amnesia: Our minds can block bad memories. We downplay how bad that last storm was. And we forget how hard it was watching our parents get all the care they needed in their later years.

Inertia and simplification: We’ve all experienced “Analysis Paralysis”. Faced with complicated matters, we freeze up and end up making no choice. Unfortunately, the long term care industry is also part of this problems. Policies can be difficult to understand. It’s easier to shove them into the desk drawer, unread and unsigned.

Not even the ostrich buries its head in the sand. Why should you? When you are ready to start taking some proactive steps for your future, click here. You will receive a no-obligation quote on your own Long Term Care insurance plan.

Denial of the Facts Does Not Make Them Less True

October 10, 2018 by Honey Leveen Leave a Comment

Resistance to planning for long term care and doubting that human activities have created global warming share some very interesting roots. What a revelation to me! Author Karie Marie Norgaard connected these dots in her book, Living in Denial.

In the book, Norgaard examines the thought processes behind those who choose to deny the existence of climate change. I read an essay by Andy Skuce in which he takes a deep dive into Norgaard’s research and understanding about Denial.

Types of Denial

The book divides denial into 3 categories:

Literal denial. This happens when people don’t trust the facts, even when overwhelmingly supported by objective and thorough scientific data. We often see this from “Climate Skeptics”.
Interpretive denial. This one gets slippery. It accepts the facts (climate change is real), but reinterprets the meaning so it doesn’t sound like a real threat. That removes their responsibility to make proactive changes, since it’s not a real problem.
Implicatory denial. In this case, the facts and the interpretations are generally accepted. But then, “the psychological, political or moral implications that conventionally follow” are discounted and ignored. Climate change is already too advanced for anyone to do anything about it, so I’m off the hook and don’t have to make hard choices.

Denying the Need for Long Term Care

If these thought processes sound familiar, these are exactly the same behaviors I’ve been writing about throughout my career as a Long Term Care Insurance Specialist. Let’s run through these again:

Literal denial. Not trusting the facts — No matter how many studies get funded, no matter how may reports get written. There are always going to be people who refuse to accept that they are probably going to need financial help to cover their future medical care.
Interpretive denial. Accepting the facts: Yes, we’re living longer. Yes, we’ll probably need help in our later years. BUT… we’ve always taken care of each other. Or our family is ready to step in to help. We’ll be fine.
Implicatory denial. I know, we’ve got some uncertain times ahead of us. BUT… ‘they’ say that there’s no real reliable coverage. Or it costs too much. What can I do at this point?

For almost 30 years I’ve had well-educated, affluent friends and acquaintances make excuses to avoid the conversation about reasonable, responsible long term care planning. Intellectually, these people know better. They are making sound decisions in other areas of their lives, but they refuse to accept the fact that after age 65, they might be one of the 70% of us are going to need some sort of long-term care.

Denial is not a river in Egypt and the first step is easy. Click here to receive your no-obligation quote on your own Long Term Care insurance plan.

It’s How You Say It

July 9, 2018 by Honey Leveen Leave a Comment

“It’s not what you say but how you say it.” This quote (or some version of it) is one of the many gems of Mae West. We love it because it’s true! We may have the most important, critical information to share. But if you can’t communicate, what’s the use? It’s like yelling down a well.

Margie Barrie, a long-time friend and colleague, writes on a variety of topics concerning long term care insurance (LTCi). Her latest article in ThinkAdvisor (June 2018) highlights the importance of the language we use when addressing topics that are hard to hear.

She has a gift for finding the right words to get our attention.

This is How You Say It

Margie lists some pointed questions and terms that truly draw peoples’ attention to the urgent need for long term care planning.

Here are some of my favorites, excerpted from her article:

What’s your plan for when you get a little older and a little sicker and you need help to put on your shoes and pants and get breakfast? (The imagery makes it very real.)
One day you are not going to be as healthy and good looking as you are today. (Suggested by Gene Cutler).
70-70-70: 70 million people are turning 70, and 70% will need long-term care.
What have you allocated in your retirement portfolio for long term care? (Until you have planned for long term care expenses, you have allocated everything for long term care expenses.)
If one of you has an extended health care need, which of your assets would you liquidate first?
This plan is not designed to make you rich. It is designed to keep you from being poor.
Put a wall of protection around your portfolio.
Wealth protection tool.
Having a plan in place gives you a map to follow.
Say when your health changes, instead of if. (Suggested by Linda Jobin).
Failing to plan is planning to fail.

Dr. Wade Pfau likes to used the term “Spending Shock” to describe the devastating emotional and financial effect from an unforeseen, expensive long term care event. He often writes how it “… can wreak unnecessary, avoidable financial, mental and physical havoc on families and estates.”

Do any of these points speak to you? Do they get you thinking about your plans? If so, take the first step: Click here to receive your no-obligation quote for your personal LTCi policy.

Dissolving Myths about LTCi, Part 2

February 7, 2018 by Honey Leveen Leave a Comment

Previously, on Long Term Care Insurance Myths…

We have seen multiple examples of the press misrepresenting the current state of the Long Term Care insurance (LTCi) industry. In my last blog post (you can read it here), I called out a specific article in the Wall Street Journal (Jan 2018) that predicted the imminent downfall of the industry. They cited financial instability and unexpected rate hikes as the central culprits.

Multiple experts from the LTCi industry penned their objections, offering well-sourced facts. Like me, they were compelled to present a number of articles in response. The status of long term care insurance is not only financially stable, but also more popular than ever.

Myths about LTCi (No Thanks to the Press), Part 1

February 1, 2018 by Honey Leveen Leave a Comment

In my almost 30 years as a Long Term Care insurance (LTCi) specialist, I have seen and shared multiple articles with you on the subject of faulty journalism. Some LTCi articles are more accurate than others. The press tends to have a negative view of long term care insurance. I work hard to help you sort the facts from fiction.

We know that negative news sells more papers. The press covers LTCi rate hikes in an often uninformed, inflammatory fashion, making it falsely appear that policyholders have no satisfactory in-between options. Journalists pretend to be expert financial advisors. This can lead policyholders to the conclusion they have no other option than to cancel their LTCi coverage. It discourages people who should and can afford LTCi premiums from considering it. Such non-factual, misinformed reporting has devastating results! We’ll talk about this in greater detail, later.

Here’s the other thing: LTCi is a complicated product with a lot of moving parts. One cannot become an expert overnight. These journalists (even at the more respected publications), in their zeal to bring you the story, get a lot of the information wrong.

Long Term Care Insurance Myths

Let’s talk about those rate hikes.

In January 2018, the Wall Street Journal published an alarming article that essentially reported the implosion of the LTCi industry. The journalist predicted that the increasing financial instability of the industry was going to result in massive rate hikes, for which most aging policy holders were unprepared. The fear over looming rate hikes is one of the prevailing Long Term Care Insurance myths.

FACT: It is almost never necessary to drop a LTCi policy due to a rate hike. We normally downgrade the policy instead, which lowers premiums while conserving high LTCi policy function.

FACT: Inciting panic over these policies results in dissuading people from acquiring this important coverage. It gives them one more excuse to avoid responsible and reasonable long term care planning in advance.

My colleague, Matt McCann, wrote a thoughtful piece to address the rate stability and affordability of LTCi:

“An insurance company can not ask for increases on current product series policy holders based on the mistakes of the older plans. This provides substantial peace-of-mind for those who are planning today.

“It is also not easy to raise premiums; the insurance company must show a substantial need based on actuarial data and have it based on a class basis only.”

FACT: The sale of LTCi policies is increasing. The real financial risk comes from lack of coverage, providing asset protection and peace of mind to families. McCann adds, “It safeguards their retirement accounts… while making their aging issues much easier on their family.”

Matt McCann’s complete article can be found here.

There are a number of well-intentioned articles providing misinformation. We’ll be addressing more of these in future blogs. Stay tuned!

In the meantime, if you’d like to get a free quote for your own LTCi policy, click here.

Request a Free, No-Obligation LTCi Quote

Why We Avoid the Hard Stuff: The Ostrich Paradox

There’s a Storm Coming

When We Avoid Information

Denial of the Facts Does Not Make Them Less True

Types of Denial

Denying the Need for Long Term Care

It’s How You Say It

This is How You Say It

Dissolving Myths about LTCi, Part 2

More Answers to Long Term Care Insurance Myths

Myths about LTCi (No Thanks to the Press), Part 1

Long Term Care Insurance Myths

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