Last week, I received a phone call from an 80-year-old woman who was perplexed about continuing her long term care insurance policy. She’d been paying into it for 15 years, but now, they were raising rates again. It would mean shelling out, every month, about $752 for her husband and herself. When she read the fine print on how she’d eventually qualify for payments, she was shockedby the criteria …not able to perform 2 out of 7 Activities of Daily Living.
“By the time I get there, I’ll be in my last month or so of life, anyway,” she complained. “What’s the point? I can pay for several months of care out of my own pocket and it won’t hurt my bank account at all.”
Exactly.
She and her husband own their home, have substantial savings, a trust fund and somehow were talked into buying long term care insurance. Their purchase guaranteed them some safety in the face of the greatest fear of all, growing old, suffering, and having no money.
The truth is, insurance is sold based on the “what if’s.” There is no guarantee that a “what if” is actually going to happen. Though, you’d never know that talking to an insurance salesman or financial advisor.
Needing long term care is not an inevitable fact of aging.
All the statistics that are thrown at us…well, it’s overwhelming bleak and futile…we’re all going to die demented, in pain, alone and of cancer. Right?
Look around and see what’s happening to your parents, your friends and the elders you know. If people ever need home care or assisted living, it’s in the very last part of life. In my experience, that is usually about a year or so. But, most often, it’s only been a couple of months.
I also know plenty of folks who had long term care insurance and never used it at all. They died quickly, unexpectedlly or didn’t qualify for the services up until the very end. One very dear 95 year old friend always pulled up her long term care insurance as the “asset in the hole.” She never used it. Instead, she went unto Hospice (a covered Medicare benefit) and died within 30 days, never qualifying for the 100 day window of the long term care insurance benefit. She estimated that she’d paid into her insurance policy over $30,000 in the past twenty years. That’s three times her out of pocket costs in the last month of life.
But, it’s not always a matter of money. Or, is it?
I’d be curious to know the percentage of long term care policies that have been utilized in the past decade, as compared to those that have been purchased. And, how much money has actually been spent, vs. invested, in long term care.
Does anyone have those figures? And, I’d like that compared to other insurances…health, auto, and homeowners, for example.
I tell people to take a look at their life circumstances, their health, family support, bank accounts and be realistic about who/what might be needed as they age.
Maybe just setting aside money in a special account for “old age” is the best idea of all. That way, it can be used as needed, rather than jumping through hoops of qualifying for a number of activities of daily living.
Or, how about forming relationships and networks of support that can help out in times of need? Not all of us are destined to live in assisted living facilities, or have a home care attendant coming in on a daily basis.
Long term care insurance didn’t exist 30 years ago. Why do you think it does, now?
I think there are numerous factors to consider before making a decision to purchase long term care insurance. And, I recommend that each of us look at our circumstances and plans for aging.
I read today about a 75-year-old skateboarder. He took it up at age 65. I doubt that he’s going to need long term care insurance, when he goes, it’ll probably be very quickly. But, it’s all a guess..a risk…and, it’s about fear, life and aging.
And, that’s why it’s important to look at what the insurance industry is telling us to expect in the future, and then live to prove them wrong.
That’s why we’re called Born To Age. Our business is about all of us…not just seniors, or “them” that are different than us. How do we want our world to look as WE age?
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