Please Explain The Impact Covid-19 Has Had On Your Finances Planning for Longevity is Smart, But Some Financial Advisors Say "No"?

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Planning for Longevity is Smart, But Some Financial Advisors Say "No"?

More families than ever are affected by chronic health care. Due to the Covid-19 virus crisis, more attention has been focused on this issue. However, this is not a new problem. Advances in medical science bring longevity. With longevity comes the costs and burdens of aging. These health problems can be caused by diseases, accidents, or simply the effects of age.

Caring for family members is always difficult. The role of caregiver is physically and emotionally demanding. You can’t really rely on a spouse because if you are older, so is your spouse. Adult children will have their own careers, families and responsibilities. A recent survey by the Associated Press-NORC Center for Public Affairs Research found that many young adults already provide long-term health care services for elderly loved ones. It is not easy for them.

Surveys show that one-third of American adults under the age of 40 already provide care for elderly family members. Another third is expected to be called upon to do so within the next five years.

The risk of needing long-term health care is high and increases with age. After reaching the age of 40 you will notice changes in your health. You notice changes in your body. As you get older, you notice that your memory is decreasing.

What this means is that the likelihood of needing extended health care is less “if” and more “when” and “how long.”

The fact that the risk of requiring extended health care is simple: It will either happen, or it won’t.

When you need long-term care, someone will be responsible for finding a family member to provide care or buy-in care at home or in a facility. The clear majority of long-term care services are custodial in nature. Custodial care is when you need help with normal activities of daily living or need supervision because of a cognitive problem such as Alzheimer’s or another type of dementia.

Health insurance or, when you are 65 years old, Medicare and your Medicare Supplement will only pay for 100 days of skilled care services. Long-term care is both a cash flow problem and a family problem.

Still, some financial planners and insurance agents want you to avoid exploring long-term care insurance. Many don’t understand the power of the product, underwriting, policy design, and LTC insurance partnership program, which is available in 45 states.

Why? There are many reasons. Some people are ignorant of the facts. However, most of them are very aware of the economic costs and burdens of aging. So why not have long-term care insurance?

There is a huge misconception about the cost of policies. You may also have read some of the articles. They indicate higher premiums or premium increases over time.

The fact is that premiums are very affordable for most people. Of course, if you are 75 when you get the policy, the premium will be based on that age and your health at age 75. However, people are adding LTC insurance to their retirement plans before retirement, most of them in their 50s. Most of my clients are 45 to 67 years old. At these ages, the premiums are very affordable, especially if you are in good health and your policy is properly designed.

Premiums can vary by more than 100% between insurance companies for the same level of coverage.

Policy design is critical. Most claims are for in-home care, which typically costs less than a skilled nursing home. Policies pay for quality care in the setting you want. At home, there are many settings for long-term care services, including adult day care, assisted living, memory care, and traditional nursing homes.

The American Association for Long-Term Care Insurance says most claims are for services at home. Big companies paid more than $11.6 billion in benefits to American families in 2020. Policies work and work very well. They choose family and ease the heavy burden placed on loved ones.

Partnership LTC policies provide dollar for dollar asset protection. With a shared LTC policy, you can purchase enough long-term care benefits to protect your assets without spending too much.

Some insurance agents and financial planners want you to buy expensive life insurance policies instead—or worse—do nothing and self-insure.

Self-funding is not the best way to address future costs and the burden of aging.

There are some excellent “hybrid” policies available. These are life insurance policies or annuities designed specifically for long-term care. For some people this may be the best solution. But generally, a typical insurance agent or financial planner is not the person to talk about these options.

You need an experienced LTC insurance specialist. There are a handful of nationwide experts. These are people, like me, who represent all the major companies, understand policy design and underwriting, know the power of the partnership program, and have processed claims, so they know how the policies are used.

In my case, I have thousands of clients nationwide in the 21 years I’ve been helping people plan for aging. Remember, premiums are based on your age and health at the time of application, as well as the amount of benefits you want to receive. These policies are custom designed, so you need an expert who works with all the major companies to help you find the right coverage.

So how does the premium increase? Yes, it is true that premiums have increased on older policies sold decades ago. These “legacy” policies were priced and marketed prior to the price stabilization regulations that are now in place in many states.

Today’s LTC insurance policies are more scientific and conservative than ever before. Premiums now also consider lower interest rates, lower lapse rates, and actual claims experience. According to the Society of Actuaries, today’s long-term care insurance plans have very little chance of future premium increases.

Regardless of those facts, it’s not easy for insurance companies to raise rates on products being sold today. This should give consumers more peace of mind as they plan how to secure savings and ease the burden of extended care placed on their loved ones.

One of the biggest differences between a specialist in long-term care and a financial planner or general insurance agent is that they view long-term care insurance only as a financial decision. Yes, money is important. However, a long-term care specialist knows it’s all about family, your family.

Yes, long-term care is a cash flow problem. However, long-term care outcomes affect your family as well.

Without a plan to address your future longevity, your family will be responsible for everything. The first thing my clients’ adult children tell me during claims is that their mom or dad’s policy gave them time to be a family. They are always grateful for the support that allows them to be loving and supportive. This way, they can spend quality time with mom or dad and not worry about where the money is coming from or, worse, having to provide the care themselves.

Working with an expert will allow you to get the exact information you are looking for. There are several reference websites for research:

LTC News offers articles and resources at: http://www.ltcnews.com

US Department of Health and Human Services: https://longtermcare.acl.gov/

Long-term care will affect you, your family, your savings and your lifestyle. LTC insurance is easy and affordable asset protection. These schemes not only protect your savings but also reduce the burden on family members. Let your financial planner deal with your mutual funds, stocks and bonds. That is their expertise. Allow a general insurance agent to get the best deal on your home and auto insurance. But for long-term care, seek the help of a specialist. Act before you retire to take advantage of lower premiums and your overall better health.

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