I Finally Did It!

I am now in my early 50’s. I know you thought I was younger, but earlier this year, I pulled the trigger. After researching the best policies for my clients for years, my wife and I finally protected our assets with a Long Term Care policy. The policy we purchased is Asset-Based Long Term Care. The policy covers us both for our entire lifetimes, increases the benefit by 5%/yr, and will pay benefits for our entire lives. This could cover over a million dollars of care for each of us if needed. And if we never use the LTC, or only use a small amount, our kids will receive more than we paid in premiums as a tax-free death benefit. One of the biggest benefits of this policy, other than paying for our care, is the care coordinator. We don’t want our three sons to have to figure out the best solution for us if we ever need care (and we definitely don’t want them feeding us or helping us in the bathroom). We want them to get us the best possible care and be able to stay in our home and a care coordinator will help them figure everything out for free.

Many of our clients have decided to protect themselves with a similar policy over the past 30 years. Some of our clients have been through long-term care disasters. Consider this: (names have been changed to protect the guilty)

Suzanne was 78 and widowed and worth about $2,000,000 when she started to develop Dementia. Suzanne’s daughter Michelle was a single mom with a young daughter of her own. After about a year of home care costing over $12,000/month, Michelle finally had to move her mom to a memory care facility. Suzanne developed full Alzheimer\’s disease and lived at the facility for the next 12 years at a cost of approximately $10,000/month. Suzanne had done a great job of saving for her future and went right through the 2008 financial crisis while in the memory care facility. I met Michelle right after her mom entered the facility in 2007 and we made a plan to make sure that her assets were secure. At Suzanne’s death in 2018, what do you think Michelle inherited?

Unbelievably, $3,500,000. How did she have this amazing result while spending over $120,000/year on her care for over 10 years? Suzanne had the foresight and purchased an LTC policy in her early 60’s and it paid 100% of her care for 13 years. Her daughter Michelle got to give her the best care available and visit her whenever she wanted without thinking about the costs, and without having to try to take care of mom while working and raising her daughter. This was a happy ending to an unfortunate story, but sadly enough most people are in denial and think that it won’t happen to them.

 Don’t let it happen to you! Make sure your assets are protected and make sure your kids don’t have to help bathe, feed, or dress you. According to Lifehappens.org,

  • 50% of people over 65 will need LTC at some point in their lives, and 20% will need LTC for more than 5 years.
  • Women on average need 1.5 years more LTC longer than men because they live longer (and are more likely to live alone when older). 70% of assisted living residents are women.
  • Most Medicare policies don’t cover long-term or unskilled help with ADLs.
  • The average California nursing home costs about $110,000 annually. 

What can LTC cover?

  • Nursing home care
  • Assisted living facilities
  • Adult daycare services
  • In-home care
  • Home modification
  • Care coordination

Please let me know if you would like to discuss long-term care planning. 310-417-9040.

-Jeff Gurman

The information above is not to be construed as tax, legal, or investment advice. That advice can only be provided by independent tax, legal, or investment advisors. CA Insurance License #0815028.

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