LONG-TERM CARE

According to the administration of aging, 70% of people who are 65 today will require some type of Long-Term Care in the future, which makes sense because most of us have personally experienced a loved one needing some type of custodial care (eating, bathing, dressing, transferring, toileting, and ability to control movements of the bowels and bladder). Benjamin Franklin famously said, “If you fail to plan, you’re planning to fail.” Do you have a plan?

Truth About Self Insuring Long Term Care. Book an Appointment to Learn More

The Reality of Long-Term Care

Americans spend around $500 billion annually on LongTerm Care, the average length of stay is around three years, and people must spend down their assets to almost nothing before going on Medicaid. Currently, the cost of Long-Term Care is around $150,000 per year with an average of three years of care. Which means to selfinsure for Long-Term Care you need $450,000 per individual, and $900,000 for a couple; and you will need this to keep up with inflation and not be subject to much arket risk. This is not chump change the Long-Term Care planning discussion is real, and it is complicated.

The Shift in Long-Term Care

The Myth of Family Care

Sometimes willful ignorance can get the best of us ever heard this one: “My spouse will take care of me, and our kids will take care of them”? Think about your oldest living relatives right now who are married, could either one of them pick the other up and put them into a chair? Did your parents, grandparents, aunts, and uncles probably think the same thing? What really happened?

The Reality of LTC Rate Increases

Look, the 800lb gorilla sitting in the corner is the fact that traditional Long-Term Care policies sold in the past have had rate increases. Why did the rates increase? Because more policyholders activated their long-term care benefits, and the actuaries at the insurance companies made a miscalculation, oops, sorry. Insurance companies had to increase the premium it is cause and effect, premiums collected to the monthly LTC benefits paid to policyholders. Did the insurance companies intentionally do this?relatives right now who are married, could either one of them pick the other up and put them into a chair? Did your parents, grandparents, aunts, and uncles probably think the same thing? What really happened?

The Benefits of LTC Insurance

No, they underestimated the claims, more policyholders triggered benefits than expected. Does it matter now? Not really, if anything it proves the importance of proper planning around long-term care. So, what about the policyholders who didn’t have a bad experience? They made out like bandits, because policyholders received way more in tax-free benefits than they ever paid in premiums. Hopefully their children send thank you cards to the agent who convinced their parents to purchase the policy because they didn’t have to deal with a nightmare. “Heaven forbid” these people speak up, or we listen to what they have to say about their experience. Naw! Let’s focus on the people who haven’t triggered their benefits and complain about LTC insurance companies increasing premiums and ripping off the policyholders. do this?relatives right now who are married, could either one of them pick the other up and put them into a chair? Did your parents, grandparents, aunts, and uncles probably think the same thing? What really happened?

Evolving Views on LTC Insurance

In the past people understood the risk and were open to LTC insurance. In fact, the conversation was around who has the best deal for Long-Term Care insurance? Was it GE Capital, John Hancock, or CNA? Today the conversation has changed, is it a good idea to purchase LTC insurance or self-insure? I am not sure when or how the conversation transformed, but it definitely changed.

Misconceptions About Self-Insuring

If you said you were going to self-insure twenty-five years ago on the golf course, these people would have laughed at you. Nowadays if you ask them all four will likely say “I am just going to self-insure, yeah me too, me too, me too. But they have no idea what that even means!

New Solutions for Long-Term Care

Good news! There are more options now than ever when it comes to using insurance products to plan for long-term care. New “Leveraged Long-Term Care” solutions have guaranteed non-cancellable premiums that can never increase, provide tax-free benefits, and return your money if you don’t trigger long-term care benefits. How many people really understand these policies? Not very many because they are out over their skis tips. Ok, so you might be thinking, “who is this Carter Gray and why is he so passionate?” You can thank my parents for that one. My first memories are from the early 1980’s are crawling around my mom’s feet while she was making calls to people who requested information about LTC insurance. Ask anyone of my three siblings, the only time you were allowed to interrupt mom on a phone call is if you needed to go to the hospital.

IT IS BETTER TO LOOK AHEAD AND PREPARE, THAN TO LOOK BACK AND REGRET

Self-Insured Long-Term Care Plan

Here’s the real deal, a lot of people cannot qualify for long-term care insurance because it involves medical underwriting, so they are forced to “self-insure” for LongTerm Care. If your only option is “self-insuring”, we at Pacific Insurance Group have come up with a “Long-Term Care Self-Insured Plan”, but it will likely involve collaboration with family members and does not provide tax-free benefits. Our “Long-Term-Care Self-Insured Plan” has to do with utilizing section 213 of the IRS tax code, but, just like the “Big Mac sauce” we are trying to keep it a secret for as long as we can. Give us a call or reach out and we would be happy to show it to you.

Leverage Tax-Free LTC Benefits

If you think you are insurable, now is the time to take advantage to the tax code and grandfather a policy. With American’s unfunded obligations regarding our national debt, social security and Medicare issues, it is likely the tax code will be less favorable in the future. We encourage people to explore “Leveraged Long-Term Care” products and guarantee tax-free long-term care benefits. “It is better to look ahead and prepare, than to look back and regret.” – Jackie Joyner-Kersee