August 4, 2025 • 34 mins
Long-term Care Insurance: One size does not fit all – Linda Thalheimer of Long Life
Planning (see website link below) joins Jeff Perry and Russ Ball to dig into the topic of long-
term care insurance. The podcast begins with a detailed discussion of who needs long-term care insurance. Linda answers questions regarding how these policies work, what they cover, and
typical limits. The conversation shifts to an in-depth conversation about new and hybrid policies that can work in certain circumstances.
#financialplanning #longtermcare #longtermcareinsurance #estateplnning #homecare
#assistedliving
www.longlifeplanning.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to something more with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president, financial advisor at Wealth
Enhancement Group.
One of the nation's largest registered investment advisors.
We call it something more because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod across
the country.
Here's your host, Jay Christopher Boyd.
Hello, and welcome to another edition with something
more with Chris Boyd.
My name is Jeff Perry.
I'm here with Russ Ball, my co-host
today.
Chris Boyd has the day off, so we're
(00:43):
sitting in the big seats trying to carry
the load.
Russ, thanks for joining me and co-hosting.
Good to be here.
And for this episode, we have Linda Tallheimer
with us.
Linda, thank you so much for joining us.
You are one of our experts that we
turn to when we have questions regarding long
-term care insurance.
So thanks for making the time to talk
to us and our listeners today.
(01:05):
Thank you.
My pleasure.
Practically every financial plan that we do, not
everyone, you know, sometimes we're doing a plan
for a 25-year-old married couple, right?
But with the exception of the younger clients
that we have, and we've, you know, some
of those we touch on it, but for
most people, most people we deal with are
entering retirement, thinking about retirement, or in retirement.
(01:28):
And so for every financial plan we have,
for every annual review we do, the subject
of the potential need for long-term care
comes up.
And if, when we go through the plan
and we start asking the what-ifs, those
questions that we're using to stress test a
plan, you know, plans look pretty good when
(01:49):
you have just the things that you hope
happen, happen.
But when we start stress testing, what if
one of you needs a long-term care
setting?
Or what if one of you pre-deceases?
Or all these things that nobody likes to
talk about.
Long-term care often has the largest impact
on the likelihood of a successful financial plan.
(02:12):
And so let's start with when is long
-term care insurance appropriate?
What category of people, if you will, broadly,
and then we can go into specifics, is
long-term care insurance an appropriate option for
people to consider as they're thinking about the
potential for long-term care needs?
(02:33):
Excellent question.
So really long-term care is the financial
product that protects your assets and gives you
more choices.
So the age at which we're thinking about
this is less relevant than the financial picture
for any individual.
So what we want to do is we
look at anyone at any age that they
can say, if I continue on this trajectory
(02:56):
and I have no bad debt, that I
will be self-sufficient in old age.
And what I mean by self-sufficient, I
mean not on Medicaid, relying on the government
for funding.
Right.
And nobody wants to be in that category
of like not having enough money or not
having enough money to actually qualify for Medicaid
(03:18):
because you're pretty destitute at that point between
assets and income.
Exactly, exactly.
So and then it becomes a question of,
you know, just determining how much you need
and how long you want a product to
last.
Right.
So that's where the actual wealth comes into
(03:39):
it and goals and perceptions of individuals of
what their needs may be.
But I'll be honest, I actually have long
-term care insurance from my children and I
had it back when they were in college
because I know that you're only as healthy
as you are today and we don't know
what tomorrow holds.
Right.
That's an interesting topic because we typically, you
(04:02):
know, we live in a world of like
typical things, but we typically think of long
-term care.
Somebody retires, you know, and they have a
healthy runway.
It looks like they have no health issues.
Who knows?
But they have a healthy family history and
they may live very well, may live to
95 or longer.
And so the likelihood of having a long
(04:22):
-term care need increases.
Right.
Absolutely.
But we all know from our life experience,
friends, if it's not your own family, somebody
you know where there's someone younger who has
that need for a long-term care setting,
either temporary or permanent.
Right.
So it is broader than what we typically
think about.
Linda, you touched on people at the Medicaid
(04:47):
level, which they can't afford any product, likely.
Right.
And so then we have the other end
of the spectrum and where people have accumulated
so much wealth that a long-term care
event could very well be handled with their
assets and their income that they've generated.
So, you know, if they have a, you
(05:09):
know, do the projections, you can shed some
light on the average cost of long-term
care, perhaps.
But just for sake of discussion, $100,000
a year of long-term care needs for
10 years, which would be a long time.
You know, we have many clients who their
plan can handle that.
It's not what they want.
(05:29):
They can handle that.
So insurance probably isn't something that they're going
to consider.
It's the folks who are not at the
super low end and not at the super
high end that long-term care insurance might
be a good option for them.
Is that fair to say?
(05:50):
Yes.
So actually it's the difference between want and
need.
So people who have moderate savings and investments,
you know, less than two million, those people
are really need long-term care because a
long-term care event can wipe them out,
change the lifestyle for a healthy spouse or
impact their ability to leave money to assets
(06:12):
or to even have a quality of care
throughout a very long, long-term care event.
And for the wealthier people, it's a question
of choice.
And most wealthy people, although they could afford
to pay for long-term care, didn't get
wealthy because they paid after-tax dollar for
everything and always paid full price.
(06:34):
So long-term care insurance is like getting
a discount to pay for long-term care.
And wealthy people like discounts just as much
as people who need to have that discount.
Explain that a little further.
I think I know what you're saying, but
explain how the discount would play into this.
So certainly.
So for example, depending on your age, you
(06:55):
can leverage long-term care insurance, you know,
five times, six times, sometimes even seven times
greater than a rate of return that a
financial planner would typically estimate on a, you
know, saying that, you know, there's 95%
chance that we can depend on, for example,
(07:17):
a 5% rate of return over a
lifetime.
Sure.
No, we can all say, yes, the market
can be higher, the market can be lower.
But if I said to a financial, if
I say to you, you know, what would
you say to your clients is a solid
rate of return that you could feel comfortable
saying with 95% accuracy, you know, many
(07:38):
financial planners on average would say around 5%,
right?
Some might say a tiny bit higher, some
might say a tiny bit lower.
And if we take that number and we
use it to compare to the returns on
a long-term care policy coming in tax
-free, that can be quite a significant leveraging
(07:59):
of that money.
So instead of having, you know, if you
doubled your money with investment, you could, you
know, five times your money potentially with long
-term care.
And depending on age and health, it could
be more, or it could be a little
bit less.
And so, you know, the question is, even
if you used a tiny bit of your
long-term care policy, you would do it,
(08:20):
you would be doing as well as if
you had invested that money.
And so when we think about long-term
care insurance, the reason people don't purchase it
is because they don't want to spend the
money, right?
So, you know, it's almost like a catch
-22 or an oxymoron, really, when we think
about wealthy people who can afford anything, that
(08:41):
they can pay dollar for after-tax, dollar
for long-term care, and then say, well,
I don't want to spend the money on
insurance, right?
It's not about the cost.
It's about their perception.
And often it's a perception that I don't
believe I'm ever going to need long-term
care.
And that's what drives it.
Because if there's any perception that they will
actually need long-term care, you know, it's
(09:03):
a very logical decision to have more for
less.
Yeah, you're totally correct.
And we hear our clients, and they're being
sincere.
I'm not trying to pick on any one
of them who might say this, but we're
not going to need that because we're married
and I'm going to take care of him,
and she's going to take care of me.
So we're just not going to do that.
(09:25):
You know, I love when people say that.
I know.
And they mean it with all the proper
intentions.
Do.
And I explain that long-term care insurance
helps you take care of each other better
and longer.
My mom has been in claim for nine
years.
And when she first went, when she first
(09:46):
started to have care needs, you know, she
came to the house and I provided her
care.
My background, I'm an occupational therapist.
Very easy for me to care for people.
I understand adaptive technique and adaptive equipment.
I had everything adapted.
And I'm telling you, I was tired, right?
So when I woke up in the morning,
I got her out of bed.
(10:07):
I got her, you know, ready and in
the bathroom and showered and dressed, and it
was time for breakfast.
And then, you know, it was an hour
and a half later, I'd run upstairs, get
myself showered and dressed, run down and do
breakfast.
And I said, you know, this just doesn't
make any sense.
So she had a long-term care policy,
but I figured, you know, I'm the daughter,
I can do this.
Oh, all the right intentions again.
(10:29):
All the right intentions.
And it's so much better.
And I changed it.
I said, you know, let's just use your
long-term care insurance for this.
And even when she was at my house,
I would have someone come in and get
her up in the morning.
I'd get dressed, she'd get dressed, I'd get
showered, you know.
And then we sat down and had a
nice breakfast.
It's a nice quality time, yeah.
All the more time to enjoy the positive
aspects of the day.
(10:49):
You know, you touched on something, which is
another, I think it's a misconception or maybe
just how people view things, like all or
nothing all the time.
I think when people, you're talking to them
about long-term care, they're thinking, well, that's
my insurance if I go into a nursing
home, right?
That's my insurance.
If I have this big expense, you know,
I need to be there because cognitive issues
(11:13):
or physical issues or whatever the case is.
And so that's my insurance program for that.
And maybe back in the day when this
started, that's what it was.
I've heard people call it nursing home insurance.
I'm sure you have.
But can you just briefly outline the broadness
of these policies today?
Absolutely.
And what it covers?
(11:34):
Yeah.
So first of all, I call this nursing
home avoidance policy.
Fair enough, yeah.
Right?
Because we don't want to go to a
nursing home.
Nursing homes have become very challenging places.
For the most part, they are where the
very poor and the very sick go to
live, and that's not a great financial mix.
And a lot of people end up, if
they do need nursing homes, go to private
(11:55):
nursing homes.
So it's very challenging.
Now, the reason why we think of long
-term care and nursing homes is it wasn't
until the late 80s that assisted livings even
came into place.
So in fact, some of these older policies
that talk about home care and nursing home
have terminology in there that says custodial and
skilled nursing.
(12:15):
So those old long-term care policies cover
assisted livings because custodial nursing homes are, in
fact, assisted livings.
Yeah, so they're very broad, and they allow
people even to spend more money.
So let's talk about cost of care.
Massachusetts, you're talking an average now of about
$40 an hour with a minimum of a
(12:37):
four-hour shift.
So you're talking, you know, $4,800 a
month, you know, for one shift of care.
And then, if you need someone to put
you back to bed at night, you know,
you're over $9,000.
You need someone to help you 15 minutes
in the middle of the night, you're talking
an eight-hour shift.
You know, so if you needed morning, evening,
(12:57):
and 15 minutes in the night, you're talking
$18,000 a month.
That's not even 24-hour caregiving.
So people then transition into assisted livings.
And assisted livings have gotten so much more
expensive.
You know, a really nice assisted living in
Massachusetts runs about, you know, $8,000 on
average.
They can be up to $10,000 or
$12,000 just for a traditional assisted living.
(13:18):
And dementia units are much higher.
I mean, I have clients in $14,000
a month assisted livings for dementia.
And that's not the be-all and end
-all of long-term care.
Now, if you're the kind of person who
likes to get up at, you know, 7
.30 in the morning, be showered before you
go down to breakfast, you'll be hiring a
private aide to subsidize the care and the
(13:39):
assisted living.
Because the assisted living's busiest time is getting
people ready in the morning to get down
to breakfast, getting people ready for lunch, getting
people ready for dinner.
So the showers are typically, you know, between
9.30 and 11.
And, you know, 12.30 and 4 o
'clock, right?
So they're in these off-peak times that
people are getting their showers.
So for people who don't eat breakfast or
(14:02):
like to get up late, you know, that's
not as much of a problem.
But for those who are, you know, eager
beakers in the morning and want to get
up, they'll be hiring an additional caregiver to
the assisted living.
So you can see how the cost of
care is much higher than most people will
predict.
(14:22):
Yeah, definitely.
The cost is a big part of it
that we're, you know, trying to model when
we do the stress testing.
You know, we look at some of the
Genworth studies of the area.
And for example, Cape Cod, you might have
more updated numbers than us, but we use
about $180,000 a year for nursing home
coverage on Cape Cod.
(14:43):
And anyway, obviously a huge expense.
I think a lot of people do get
a little bit overwhelmed by the amount of
options when it comes to long-term care
insurance.
And we were talking about it just before
the show that there are a lot more
options now that there might've been in the
past.
So can you walk us through some of
those that you work with, whether it be
(15:03):
the traditional long-term care insurance or hybrid
solutions?
Sure, sure.
And before I do that, I think it's
important to talk about the duration of care.
So we have the expense.
Let's talk a little more about duration.
So we can talk about averages of long
-term care about 3.7 years, but the
reality is that that number means nothing because
long-term care is a U-shaped curve
(15:24):
as opposed to a bell-shaped curve, right?
So what happens is, and it makes a
lot of sense, people who need care are
either very sick, they enter into care, 40
% of them have died within the first
three years.
And then it sort of stays low.
And then those people who make past that
period of time keep on going, keep on
going, keep on going.
And 16% of people will use five
(15:45):
years or more.
I think I mentioned my mom, in her
ninth year of care.
Ninth year, yeah.
And if you had asked me on day
one, I would have guessed two years and
if we were really lucky, three.
And if you asked me again, I would
have said two years and if we're really
lucky, three.
And after six years, I was like, who
knows, right?
Who knows, right?
And my dad is 98.
(16:06):
He went into claim at 96 and he
has committed to make it to make it
to 100.
So that was four years of care minimum
because he's a very committed type guy like
that.
So you don't know whether you start young
or you start old, how long people actually
go into need care.
And so when we look at policies, we
look at the availability of funds.
(16:28):
So people who don't have a lot to
put into a long-term care policy, smaller
policies still have tremendous value.
Small policies are done best with traditional policies.
They're tightly underwritten.
In Massachusetts, we have the MassHealth Lean Law,
which protects over a million dollars in a
primary home.
(16:49):
And in other states, we have Partnership, which
protects dollar that you receive in your benefits.
And so small policies really help those people
who need a lot of money and we
do a short period of time so that
they can co-fund every part of that
long-term care policy.
There's no sense in having a long policy
(17:09):
and finding out they run out after the
third year in supplementing.
So Linda, just to clarify for the people
who may not have much experience in this,
in Massachusetts, as you indicated, if you have
a qualifying long-term care policy, your primary
residence will not be automatically leaned to secure
(17:31):
the funds if you had to go on
Medicaid.
Yeah.
So clarify that.
Your house can still have a lien upon
it, but upon the death of the person
in claim, the funds will not be recovered.
The lien is removed and the home is
returned to the estate.
Okay.
Thank you.
And typically, I think when people have maybe
(17:51):
heard about long-term care traditional policies, they
say three years or $300,000 or whatever
the number is, right?
And so go ahead.
Yes.
So I usually start off, so if we're
looking at a minimum long-term care policy
to meet MassHealth lien is just $125 a
(18:12):
day.
So they're in $10 increments, so $130 a
day would get someone to that MassHealth lien
protection, put a little inflation protection on it
so that it can have some real value
going out in addition to protecting their home.
And then we go up from there based
on that premium and affordability.
Once they get to about $5,000 or
(18:32):
$6,000 a month in benefit, then I
start to enhance to three years, four years,
five years, depending on their, again, on their
wealth and their ability to co-fund these
policies for the full cost of care.
But the wealthier population, I usually start at
six years and go up from there.
Uh, couples, I love shared policies, uh, and
(18:55):
there are two different ways to share policies.
For example, a couple of each could have
four years of coverage and they could share
each other's where one could use eight and
there would be nothing left for the healthy
spouse, but it's a great way to protect
the estate for the healthy spouse.
And if the first spouse doesn't use any
care, it's all left for the, for the
other spouse and protects the estate for, for
(19:16):
whatever, whoever else would be their heirs or
beneficiaries.
And, um, and then we have, uh, shared
policies that actually have an extra pool of
money so that each of them would say
have four years.
And then there's a four year pool where
one could use eight and there's still four
for the healthy spouse.
And these are the strongest leverage policies out
in the marketplace.
(19:37):
So, um, in terms of policies, there's basically
three ways to fund long-term care.
There's traditional, which is generally use it or
lose it.
They are most cost-effectively paid for via
an annual premium.
And you know, that you pay until you
enter into claim.
A hybrid, which is a combination of a
life insurance long-term care policy or annuity
(19:59):
long-term care policy.
And those have inflation throughout the entire policy.
And it's really seamless to the client that
it is life and long-term care and
the return of, um, premium is basically a
death benefit that is right around the cost
(20:20):
of the premium.
And, and that would be left to the
heirs if that person never needed them, needed
the, the policy.
So basically for every dollar you receiving claims
comes off the death benefit.
And many of these policies have a residual
death benefit from five to 20%.
So those are designed to deal with the
hesitancy about, I'll never going to use this.
(20:41):
I'm going to lose all this money.
Why should I, why should I do it?
Right.
Exactly.
So one of the things that these policies
does is it checks off the boxes on
the win-win scenario, right?
So obviously if you need long-term care
and you have a long-term care policy,
that's a win, right?
Because you've leveraged your money.
You have many more choices.
It's a feel good in a really feel
(21:02):
bad situation.
Now, um, because of that return of premium,
if you purchase a policy and you never
use it, your estate that would have supplemented
that long-term care policy has been protected
by your good health.
So that's a win.
And then the kids or your beneficiaries also
get a death benefit.
So it's another win.
So it's another feel good, whether you use
(21:24):
long-term care or not, it's a win
for the family, right?
So that's, you know, makes it much, much,
much easier to make that decision, especially knowing
that if you don't have long-term care
insurance and you enter into claim, it is
an immediate panic on the side of the
family, which is, we don't know how much,
and we don't know how long this is
going to cost.
And how do we start managing and trying
(21:46):
to figure out how much we should allocate
along the way?
Absolutely.
So, um, the other question you had was,
uh, all the policies that are out there.
So there's the hybrid.
And then I also want to mention there's
a life with a long-term care rider
and you, and a lot of people are
going to start seeing this in their worksite.
Um, and these policies have great value for
(22:07):
people who don't have good health because they're
guaranteed underwritten in the worksite.
So great products to have.
And, um, and they're also especially good for
the younger population who needs life insurance.
And, and once they reach 70, the, the,
uh, the death benefit decreases to about 30%,
but they kept to keep the long-term
(22:27):
care benefit.
Now there's no inflation on these policies and
the older you get, the more competitive a
traditional policy would be.
And, and hybrid policies would be to these
types of policies.
So I always say, whenever you're in a
worksite, you got offered a product, make sure
you do a comparison, uh, with the general
marketplace to make sure that you're making the
(22:48):
right decision.
Right.
Okay.
Great.
Uh, and, and I'm just thinking at high
level, we didn't touch on it yet, but,
uh, what does it, you know, what are
the requirements to, to qualify for a long
-term care, uh, claim?
Okay, good.
So traditional policies are the most strictly underwritten.
And so the, basically insurance companies all across
(23:09):
the board are generally looking for stability.
So, um, you know, they don't worry about
high blood pressure as long as it's stable
and you're managing your meds.
They don't like meds going up and down.
They don't like new diagnoses.
Um, they want to ensure things that they
understand.
So, uh, COVID for example, is a scary
thing to insurance companies.
(23:29):
So when people have, uh, uh, you know,
long COVID, uh, it's very difficult to, and
actually I'm working with that right now.
I have two companies that will insure long
COVID, right?
That's it because they just don't know enough
about it and makes them nervous.
Maybe 10 years from now, they'll feel more
comfortable.
(23:50):
Lyme disease.
Another one is another one that that's really
tough.
You have long Lyme, uh, with all those
extra symptoms, very difficult to get underwritten.
The good news is that we do have
products now that have simplified and even guaranteed
underwriting so that everybody has an opportunity for
something.
It's just a question of, of what and
how much.
(24:11):
Yeah, that's great.
And, and what about, uh, you know, as,
as you age, like what would qualify you
for, for getting that coverage?
Oh, I see.
That was, that was another question I had.
So I got it back.
Yeah.
I was thinking about qualified from underwriting and
qualified for claim.
So, um, all the longterm care policies are
the same, which is when you need help
(24:32):
in two out of six daily living skills.
So those two out of six are bathing,
dressing, toileting, continence, transferring, which means like moving
from a bed to a chair, um, or,
uh, uh, feeding oneself.
And that's from the table to your mouth.
It's not preparing food.
So it's typically when you have tremors like
(24:53):
Parkinson's or if you're on a feeding tube,
that that would go into play or a
cognitive impairment, uh, such that you need substantial
supervision.
So it's not when you need somebody organizing
your schedule, um, it's, or can't drive it's
when you don't want to leave someone alone
in the house.
Cause you don't know what they're going to
do, right?
They could leave the stove on.
(25:13):
Um, you don't know if they're going to
shower and if they shower, if they're just
going to put their clothes back on, um,
you know, those types of things.
Now, while it seems like those are very
high bars and they are high bars, 30
% of people will use their longterm care
policies, even with a 90 day elimination period.
And 50% of people will use their
policies with a zero day elimination period.
(25:35):
So still very, very high utilization of longterm
care.
And here's the catch 22, the longer you
live, the greater the risk of dementia.
Sure.
So it's the catch 22, you know, you're
healthy, you're feeling good.
You feel like, you know, why would I
ever need longterm care?
I am so healthy.
I do everything right.
But unfortunately that brings you into very old
(25:57):
age and very old age itself is what
often brings people into claim.
Linda, one of the objections that we traditionally
hear from people who were talking about the
likelihood of a longterm care policy being helpful
to their plans and to reach their goals
is the premiums.
It's not a steady premium, right?
(26:18):
So you're not saying your premium is $3
,000 a year.
The premium is not fixed for most, if
most, if not all policies, is that correct?
And there was a period where there was
some premium increases that were maybe higher than
people had thought.
So there are policies that do have guaranteed
(26:38):
premiums.
So all of the hybrid policies are guaranteed
premiums.
And it's important to understand what caused those
rate increases.
Those earlier policies were grossly underpriced.
I have one of those older policies.
And if I get a 400% rate
increase over my lifetime, it's still a good
deal.
(26:59):
I mean, that's how significantly underpriced those early
policies were.
And it was, and so it's actually important
that those increases take place so that the
companies will be able to be there to
be able to pay out those claims when
people go into claim.
And what I try to help people understand
(27:19):
when they do get rate increases is to
not look at the absolute dollar amount, but
look at the relative value, right?
And they were so smart to have purchased
it when they did.
And even if they have to lower their
values a little bit, the cost benefit of
these are incredible.
And we used to cover the total cost
of care.
I mean, you know, with, you know, $200
(27:41):
a day, 5% compound inflation and unlimited
benefits.
I mean, crazy, right?
You know, so now we're doing, you know,
we look at, I try to have at
least four hours of home care covered.
So if somebody says, you know, I expect
to live till, you know, I would go
into claim about 85.
Some might say 80, some might say 90.
We pick an age, we do the projections,
(28:03):
and we say, we'd want to know that
you could cover at least four hours of
home care.
Why?
Because this makes it easy for everybody.
So when you first need care, you bring
in that first four hours, because if you
don't have long-term care insurance, what happens
is you need one hour, one and a
half hours of care.
And then you find out that you have
to spend $160 for, you know, that one
(28:24):
and a half.
And then families say, well, we'll just do
it ourselves.
And that is the beginning to the end,
right?
It's just overwhelming to families.
So to have that four hours covered, magical.
And that four hours isn't just for home
care.
It's for when you visit your children or
visit friends.
You can stay at a friend's house and
bring your caregiver, so to speak, with you.
(28:45):
So you're never a burden to anyone that
you're visiting.
You can go to weddings, you can go
to, you know, graduations, and you bring your
caregiver, you know, once again.
So this is, you know, people think about
that once you need care, it's all over.
It's not true.
I travel with my parents all the time.
And, you know, when we go to hotels,
(29:05):
we have an aid, we call up the
individual home care agencies in the different states
that we visit, and have a caregiver come
into the hotel and provide the care.
And, you know, then you don't mind doing
little things like a little helping with the
toileting or going back to sleep because that
major care in the morning is taken care
of.
So four hours of care is where I
(29:26):
start.
It's typically about half the cost of assisted
living.
So it makes sense as a good starting
point.
And then if we have to go a
little lower, we'd do like three quarters of
the cost of care because most people would
have paid for that one hour anyways.
So at least the other three hours are
there to make it easy to accept that
full four hours of benefit.
(29:46):
This certainly isn't a financial issue, but I
bring it up because it's my mom.
She had home care for actually a billion
back when she retired, she was a home
health agent as a second as a post
retirement job.
So she did the work.
And then later in life, when she was
around 90, she needed home care.
(30:06):
But the reason that she would tell us
that she needed home care is she needed
help and she didn't want her family providing
her the type of help that she needed.
Absolutely.
You know, I don't want you to give
me a bath, son.
Right.
And, you know, I don't want I would
just want some helper, some companion to help
me do the work.
So it's more this this this issue is
(30:27):
more than a financial issue.
It's also, from my perspective, a quality of
life to have the resources or the insurance
that you can live a dignified life and
not be that burden to I hate to
use the word burden because a lot of
people don't think of that, but be that
need for the family to have to step
in and do things that just, you know,
(30:48):
better done by someone who's trained and someone
who has the temperament and experience to do
it.
Yeah.
And I think the other thing is that
when you have a long term care policy,
you're setting a direction to your children, right?
You're telling them I've already prepaid for my
caregiving.
I do not want you I never intended
(31:08):
for you to care for me.
Here's the plan.
So it's all set up for them.
I have a gentleman who has like over
thirty five million and he bought a long
term care policy for himself and his wife
because he wanted twenty four hour home care
and he didn't want the family to have
to think about what liquidate what to sell.
(31:31):
He wanted to make it easy.
And so, you know, people can spend, you
know, you know, ninety thousand dollars a year
on long term care if they have the
money because it is value.
So, you know, they just the more you
have, the more you can spend, because when
you have the money, it's a want and
not a need.
Right.
So he wanted to make it easy on
(31:52):
his children.
He knew he could make it easy on
his children.
And so he's making it easy on his
children.
And oftentimes when people are in those higher
wealth categories, they often can take more tax
deductions.
They may own businesses and they can take
tax deductions on the premiums and the benefits
are still tax free, regardless of whether or
not you take the premiums as deductions.
(32:14):
So we often talk to our clients when
they're talking about legacy planning.
We talk about a variety of subjects, whether
it's state planning or long term care planning
that, you know, although it's difficult to think
about these topics as you get older, it's
actually a gift that you're giving to your
family to resolve these things and resolve these
(32:34):
questions, resolve these care issues so that you're
if the time comes, you're not having to
have them rush around and have the stress
and potential strife avoidance as well.
So Linda, you're a great guest.
Lots of information there.
Can you give our listeners a website or
a way if they want to follow up
with you for questions, how they can reach
(32:56):
out to you?
Yeah.
So my website is longlifeplanning.com and you
can also email me at linda at longlifeplanning
.com.
Great.
We'll put both of those in the show
notes.
So if you're listening and you didn't catch
that, just open up the show notes and
you'll see how to reach out to Linda.
(33:18):
Linda, thank you for your time.
Thanks for the work that you do.
And Russ, thanks for co-hosting with me.
Of course.
Please tune in next week when we'll continue
on with various financial planning topics.
Until then, keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
(33:39):
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll free at 866
-771-8901, or send us your questions to
amr-info at wealthenhancement.com.
(34:02):
You're listening to Something More with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
provide investment advice on an individual basis to
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
(34:24):
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
Welcome to something more with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president, financial advisor at Wealth
Enhancement Group.
One of the nation's largest registered investment advisors.
We call it something more because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod across
the country.
Here's your host, Jay Christopher Boyd.
Hello, and welcome to another edition with something
more with Chris Boyd.
My name is Jeff Perry.
I'm here with Russ Ball, my co-host
today.
Chris Boyd has the day off, so we're
(00:43):
sitting in the big seats trying to carry
the load.
Russ, thanks for joining me and co-hosting.
Good to be here.
And for this episode, we have Linda Tallheimer
with us.
Linda, thank you so much for joining us.
You are one of our experts that we
turn to when we have questions regarding long
-term care insurance.
So thanks for making the time to talk
to us and our listeners today.
(01:05):
Thank you.
My pleasure.
Practically every financial plan that we do, not
everyone, you know, sometimes we're doing a plan
for a 25-year-old married couple, right?
But with the exception of the younger clients
that we have, and we've, you know, some
of those we touch on it, but for
most people, most people we deal with are
entering retirement, thinking about retirement, or in retirement.
(01:28):
And so for every financial plan we have,
for every annual review we do, the subject
of the potential need for long-term care
comes up.
And if, when we go through the plan
and we start asking the what-ifs, those
questions that we're using to stress test a
plan, you know, plans look pretty good when
(01:49):
you have just the things that you hope
happen, happen.
But when we start stress testing, what if
one of you needs a long-term care
setting?
Or what if one of you pre-deceases?
Or all these things that nobody likes to
talk about.
Long-term care often has the largest impact
on the likelihood of a successful financial plan.
(02:12):
And so let's start with when is long
-term care insurance appropriate?
What category of people, if you will, broadly,
and then we can go into specifics, is
long-term care insurance an appropriate option for
people to consider as they're thinking about the
potential for long-term care needs?
(02:33):
Excellent question.
So really long-term care is the financial
product that protects your assets and gives you
more choices.
So the age at which we're thinking about
this is less relevant than the financial picture
for any individual.
So what we want to do is we
look at anyone at any age that they
can say, if I continue on this trajectory
(02:56):
and I have no bad debt, that I
will be self-sufficient in old age.
And what I mean by self-sufficient, I
mean not on Medicaid, relying on the government
for funding.
Right.
And nobody wants to be in that category
of like not having enough money or not
having enough money to actually qualify for Medicaid
(03:18):
because you're pretty destitute at that point between
assets and income.
Exactly, exactly.
So and then it becomes a question of,
you know, just determining how much you need
and how long you want a product to
last.
Right.
So that's where the actual wealth comes into
(03:39):
it and goals and perceptions of individuals of
what their needs may be.
But I'll be honest, I actually have long
-term care insurance from my children and I
had it back when they were in college
because I know that you're only as healthy
as you are today and we don't know
what tomorrow holds.
Right.
That's an interesting topic because we typically, you
(04:02):
know, we live in a world of like
typical things, but we typically think of long
-term care.
Somebody retires, you know, and they have a
healthy runway.
It looks like they have no health issues.
Who knows?
But they have a healthy family history and
they may live very well, may live to
95 or longer.
And so the likelihood of having a long
(04:22):
-term care need increases.
Right.
Absolutely.
But we all know from our life experience,
friends, if it's not your own family, somebody
you know where there's someone younger who has
that need for a long-term care setting,
either temporary or permanent.
Right.
So it is broader than what we typically
think about.
Linda, you touched on people at the Medicaid
(04:47):
level, which they can't afford any product, likely.
Right.
And so then we have the other end
of the spectrum and where people have accumulated
so much wealth that a long-term care
event could very well be handled with their
assets and their income that they've generated.
So, you know, if they have a, you
(05:09):
know, do the projections, you can shed some
light on the average cost of long-term
care, perhaps.
But just for sake of discussion, $100,000
a year of long-term care needs for
10 years, which would be a long time.
You know, we have many clients who their
plan can handle that.
It's not what they want.
(05:29):
They can handle that.
So insurance probably isn't something that they're going
to consider.
It's the folks who are not at the
super low end and not at the super
high end that long-term care insurance might
be a good option for them.
Is that fair to say?
(05:50):
Yes.
So actually it's the difference between want and
need.
So people who have moderate savings and investments,
you know, less than two million, those people
are really need long-term care because a
long-term care event can wipe them out,
change the lifestyle for a healthy spouse or
impact their ability to leave money to assets
(06:12):
or to even have a quality of care
throughout a very long, long-term care event.
And for the wealthier people, it's a question
of choice.
And most wealthy people, although they could afford
to pay for long-term care, didn't get
wealthy because they paid after-tax dollar for
everything and always paid full price.
(06:34):
So long-term care insurance is like getting
a discount to pay for long-term care.
And wealthy people like discounts just as much
as people who need to have that discount.
Explain that a little further.
I think I know what you're saying, but
explain how the discount would play into this.
So certainly.
So for example, depending on your age, you
(06:55):
can leverage long-term care insurance, you know,
five times, six times, sometimes even seven times
greater than a rate of return that a
financial planner would typically estimate on a, you
know, saying that, you know, there's 95%
chance that we can depend on, for example,
(07:17):
a 5% rate of return over a
lifetime.
Sure.
No, we can all say, yes, the market
can be higher, the market can be lower.
But if I said to a financial, if
I say to you, you know, what would
you say to your clients is a solid
rate of return that you could feel comfortable
saying with 95% accuracy, you know, many
(07:38):
financial planners on average would say around 5%,
right?
Some might say a tiny bit higher, some
might say a tiny bit lower.
And if we take that number and we
use it to compare to the returns on
a long-term care policy coming in tax
-free, that can be quite a significant leveraging
(07:59):
of that money.
So instead of having, you know, if you
doubled your money with investment, you could, you
know, five times your money potentially with long
-term care.
And depending on age and health, it could
be more, or it could be a little
bit less.
And so, you know, the question is, even
if you used a tiny bit of your
long-term care policy, you would do it,
(08:20):
you would be doing as well as if
you had invested that money.
And so when we think about long-term
care insurance, the reason people don't purchase it
is because they don't want to spend the
money, right?
So, you know, it's almost like a catch
-22 or an oxymoron, really, when we think
about wealthy people who can afford anything, that
(08:41):
they can pay dollar for after-tax, dollar
for long-term care, and then say, well,
I don't want to spend the money on
insurance, right?
It's not about the cost.
It's about their perception.
And often it's a perception that I don't
believe I'm ever going to need long-term
care.
And that's what drives it.
Because if there's any perception that they will
actually need long-term care, you know, it's
(09:03):
a very logical decision to have more for
less.
Yeah, you're totally correct.
And we hear our clients, and they're being
sincere.
I'm not trying to pick on any one
of them who might say this, but we're
not going to need that because we're married
and I'm going to take care of him,
and she's going to take care of me.
So we're just not going to do that.
(09:25):
You know, I love when people say that.
I know.
And they mean it with all the proper
intentions.
Do.
And I explain that long-term care insurance
helps you take care of each other better
and longer.
My mom has been in claim for nine
years.
And when she first went, when she first
(09:46):
started to have care needs, you know, she
came to the house and I provided her
care.
My background, I'm an occupational therapist.
Very easy for me to care for people.
I understand adaptive technique and adaptive equipment.
I had everything adapted.
And I'm telling you, I was tired, right?
So when I woke up in the morning,
I got her out of bed.
(10:07):
I got her, you know, ready and in
the bathroom and showered and dressed, and it
was time for breakfast.
And then, you know, it was an hour
and a half later, I'd run upstairs, get
myself showered and dressed, run down and do
breakfast.
And I said, you know, this just doesn't
make any sense.
So she had a long-term care policy,
but I figured, you know, I'm the daughter,
I can do this.
Oh, all the right intentions again.
(10:29):
All the right intentions.
And it's so much better.
And I changed it.
I said, you know, let's just use your
long-term care insurance for this.
And even when she was at my house,
I would have someone come in and get
her up in the morning.
I'd get dressed, she'd get dressed, I'd get
showered, you know.
And then we sat down and had a
nice breakfast.
It's a nice quality time, yeah.
All the more time to enjoy the positive
aspects of the day.
(10:49):
You know, you touched on something, which is
another, I think it's a misconception or maybe
just how people view things, like all or
nothing all the time.
I think when people, you're talking to them
about long-term care, they're thinking, well, that's
my insurance if I go into a nursing
home, right?
That's my insurance.
If I have this big expense, you know,
I need to be there because cognitive issues
(11:13):
or physical issues or whatever the case is.
And so that's my insurance program for that.
And maybe back in the day when this
started, that's what it was.
I've heard people call it nursing home insurance.
I'm sure you have.
But can you just briefly outline the broadness
of these policies today?
Absolutely.
And what it covers?
(11:34):
Yeah.
So first of all, I call this nursing
home avoidance policy.
Fair enough, yeah.
Right?
Because we don't want to go to a
nursing home.
Nursing homes have become very challenging places.
For the most part, they are where the
very poor and the very sick go to
live, and that's not a great financial mix.
And a lot of people end up, if
they do need nursing homes, go to private
(11:55):
nursing homes.
So it's very challenging.
Now, the reason why we think of long
-term care and nursing homes is it wasn't
until the late 80s that assisted livings even
came into place.
So in fact, some of these older policies
that talk about home care and nursing home
have terminology in there that says custodial and
skilled nursing.
(12:15):
So those old long-term care policies cover
assisted livings because custodial nursing homes are, in
fact, assisted livings.
Yeah, so they're very broad, and they allow
people even to spend more money.
So let's talk about cost of care.
Massachusetts, you're talking an average now of about
$40 an hour with a minimum of a
(12:37):
four-hour shift.
So you're talking, you know, $4,800 a
month, you know, for one shift of care.
And then, if you need someone to put
you back to bed at night, you know,
you're over $9,000.
You need someone to help you 15 minutes
in the middle of the night, you're talking
an eight-hour shift.
You know, so if you needed morning, evening,
(12:57):
and 15 minutes in the night, you're talking
$18,000 a month.
That's not even 24-hour caregiving.
So people then transition into assisted livings.
And assisted livings have gotten so much more
expensive.
You know, a really nice assisted living in
Massachusetts runs about, you know, $8,000 on
average.
They can be up to $10,000 or
$12,000 just for a traditional assisted living.
(13:18):
And dementia units are much higher.
I mean, I have clients in $14,000
a month assisted livings for dementia.
And that's not the be-all and end
-all of long-term care.
Now, if you're the kind of person who
likes to get up at, you know, 7
.30 in the morning, be showered before you
go down to breakfast, you'll be hiring a
private aide to subsidize the care and the
(13:39):
assisted living.
Because the assisted living's busiest time is getting
people ready in the morning to get down
to breakfast, getting people ready for lunch, getting
people ready for dinner.
So the showers are typically, you know, between
9.30 and 11.
And, you know, 12.30 and 4 o
'clock, right?
So they're in these off-peak times that
people are getting their showers.
So for people who don't eat breakfast or
(14:02):
like to get up late, you know, that's
not as much of a problem.
But for those who are, you know, eager
beakers in the morning and want to get
up, they'll be hiring an additional caregiver to
the assisted living.
So you can see how the cost of
care is much higher than most people will
predict.
(14:22):
Yeah, definitely.
The cost is a big part of it
that we're, you know, trying to model when
we do the stress testing.
You know, we look at some of the
Genworth studies of the area.
And for example, Cape Cod, you might have
more updated numbers than us, but we use
about $180,000 a year for nursing home
coverage on Cape Cod.
(14:43):
And anyway, obviously a huge expense.
I think a lot of people do get
a little bit overwhelmed by the amount of
options when it comes to long-term care
insurance.
And we were talking about it just before
the show that there are a lot more
options now that there might've been in the
past.
So can you walk us through some of
those that you work with, whether it be
(15:03):
the traditional long-term care insurance or hybrid
solutions?
Sure, sure.
And before I do that, I think it's
important to talk about the duration of care.
So we have the expense.
Let's talk a little more about duration.
So we can talk about averages of long
-term care about 3.7 years, but the
reality is that that number means nothing because
long-term care is a U-shaped curve
(15:24):
as opposed to a bell-shaped curve, right?
So what happens is, and it makes a
lot of sense, people who need care are
either very sick, they enter into care, 40
% of them have died within the first
three years.
And then it sort of stays low.
And then those people who make past that
period of time keep on going, keep on
going, keep on going.
And 16% of people will use five
(15:45):
years or more.
I think I mentioned my mom, in her
ninth year of care.
Ninth year, yeah.
And if you had asked me on day
one, I would have guessed two years and
if we were really lucky, three.
And if you asked me again, I would
have said two years and if we're really
lucky, three.
And after six years, I was like, who
knows, right?
Who knows, right?
And my dad is 98.
(16:06):
He went into claim at 96 and he
has committed to make it to make it
to 100.
So that was four years of care minimum
because he's a very committed type guy like
that.
So you don't know whether you start young
or you start old, how long people actually
go into need care.
And so when we look at policies, we
look at the availability of funds.
(16:28):
So people who don't have a lot to
put into a long-term care policy, smaller
policies still have tremendous value.
Small policies are done best with traditional policies.
They're tightly underwritten.
In Massachusetts, we have the MassHealth Lean Law,
which protects over a million dollars in a
primary home.
(16:49):
And in other states, we have Partnership, which
protects dollar that you receive in your benefits.
And so small policies really help those people
who need a lot of money and we
do a short period of time so that
they can co-fund every part of that
long-term care policy.
There's no sense in having a long policy
(17:09):
and finding out they run out after the
third year in supplementing.
So Linda, just to clarify for the people
who may not have much experience in this,
in Massachusetts, as you indicated, if you have
a qualifying long-term care policy, your primary
residence will not be automatically leaned to secure
(17:31):
the funds if you had to go on
Medicaid.
Yeah.
So clarify that.
Your house can still have a lien upon
it, but upon the death of the person
in claim, the funds will not be recovered.
The lien is removed and the home is
returned to the estate.
Okay.
Thank you.
And typically, I think when people have maybe
(17:51):
heard about long-term care traditional policies, they
say three years or $300,000 or whatever
the number is, right?
And so go ahead.
Yes.
So I usually start off, so if we're
looking at a minimum long-term care policy
to meet MassHealth lien is just $125 a
(18:12):
day.
So they're in $10 increments, so $130 a
day would get someone to that MassHealth lien
protection, put a little inflation protection on it
so that it can have some real value
going out in addition to protecting their home.
And then we go up from there based
on that premium and affordability.
Once they get to about $5,000 or
(18:32):
$6,000 a month in benefit, then I
start to enhance to three years, four years,
five years, depending on their, again, on their
wealth and their ability to co-fund these
policies for the full cost of care.
But the wealthier population, I usually start at
six years and go up from there.
Uh, couples, I love shared policies, uh, and
(18:55):
there are two different ways to share policies.
For example, a couple of each could have
four years of coverage and they could share
each other's where one could use eight and
there would be nothing left for the healthy
spouse, but it's a great way to protect
the estate for the healthy spouse.
And if the first spouse doesn't use any
care, it's all left for the, for the
other spouse and protects the estate for, for
(19:16):
whatever, whoever else would be their heirs or
beneficiaries.
And, um, and then we have, uh, shared
policies that actually have an extra pool of
money so that each of them would say
have four years.
And then there's a four year pool where
one could use eight and there's still four
for the healthy spouse.
And these are the strongest leverage policies out
in the marketplace.
(19:37):
So, um, in terms of policies, there's basically
three ways to fund long-term care.
There's traditional, which is generally use it or
lose it.
They are most cost-effectively paid for via
an annual premium.
And you know, that you pay until you
enter into claim.
A hybrid, which is a combination of a
life insurance long-term care policy or annuity
(19:59):
long-term care policy.
And those have inflation throughout the entire policy.
And it's really seamless to the client that
it is life and long-term care and
the return of, um, premium is basically a
death benefit that is right around the cost
(20:20):
of the premium.
And, and that would be left to the
heirs if that person never needed them, needed
the, the policy.
So basically for every dollar you receiving claims
comes off the death benefit.
And many of these policies have a residual
death benefit from five to 20%.
So those are designed to deal with the
hesitancy about, I'll never going to use this.
(20:41):
I'm going to lose all this money.
Why should I, why should I do it?
Right.
Exactly.
So one of the things that these policies
does is it checks off the boxes on
the win-win scenario, right?
So obviously if you need long-term care
and you have a long-term care policy,
that's a win, right?
Because you've leveraged your money.
You have many more choices.
It's a feel good in a really feel
(21:02):
bad situation.
Now, um, because of that return of premium,
if you purchase a policy and you never
use it, your estate that would have supplemented
that long-term care policy has been protected
by your good health.
So that's a win.
And then the kids or your beneficiaries also
get a death benefit.
So it's another win.
So it's another feel good, whether you use
(21:24):
long-term care or not, it's a win
for the family, right?
So that's, you know, makes it much, much,
much easier to make that decision, especially knowing
that if you don't have long-term care
insurance and you enter into claim, it is
an immediate panic on the side of the
family, which is, we don't know how much,
and we don't know how long this is
going to cost.
And how do we start managing and trying
(21:46):
to figure out how much we should allocate
along the way?
Absolutely.
So, um, the other question you had was,
uh, all the policies that are out there.
So there's the hybrid.
And then I also want to mention there's
a life with a long-term care rider
and you, and a lot of people are
going to start seeing this in their worksite.
Um, and these policies have great value for
(22:07):
people who don't have good health because they're
guaranteed underwritten in the worksite.
So great products to have.
And, um, and they're also especially good for
the younger population who needs life insurance.
And, and once they reach 70, the, the,
uh, the death benefit decreases to about 30%,
but they kept to keep the long-term
(22:27):
care benefit.
Now there's no inflation on these policies and
the older you get, the more competitive a
traditional policy would be.
And, and hybrid policies would be to these
types of policies.
So I always say, whenever you're in a
worksite, you got offered a product, make sure
you do a comparison, uh, with the general
marketplace to make sure that you're making the
(22:48):
right decision.
Right.
Okay.
Great.
Uh, and, and I'm just thinking at high
level, we didn't touch on it yet, but,
uh, what does it, you know, what are
the requirements to, to qualify for a long
-term care, uh, claim?
Okay, good.
So traditional policies are the most strictly underwritten.
And so the, basically insurance companies all across
(23:09):
the board are generally looking for stability.
So, um, you know, they don't worry about
high blood pressure as long as it's stable
and you're managing your meds.
They don't like meds going up and down.
They don't like new diagnoses.
Um, they want to ensure things that they
understand.
So, uh, COVID for example, is a scary
thing to insurance companies.
(23:29):
So when people have, uh, uh, you know,
long COVID, uh, it's very difficult to, and
actually I'm working with that right now.
I have two companies that will insure long
COVID, right?
That's it because they just don't know enough
about it and makes them nervous.
Maybe 10 years from now, they'll feel more
comfortable.
(23:50):
Lyme disease.
Another one is another one that that's really
tough.
You have long Lyme, uh, with all those
extra symptoms, very difficult to get underwritten.
The good news is that we do have
products now that have simplified and even guaranteed
underwriting so that everybody has an opportunity for
something.
It's just a question of, of what and
how much.
(24:11):
Yeah, that's great.
And, and what about, uh, you know, as,
as you age, like what would qualify you
for, for getting that coverage?
Oh, I see.
That was, that was another question I had.
So I got it back.
Yeah.
I was thinking about qualified from underwriting and
qualified for claim.
So, um, all the longterm care policies are
the same, which is when you need help
(24:32):
in two out of six daily living skills.
So those two out of six are bathing,
dressing, toileting, continence, transferring, which means like moving
from a bed to a chair, um, or,
uh, uh, feeding oneself.
And that's from the table to your mouth.
It's not preparing food.
So it's typically when you have tremors like
(24:53):
Parkinson's or if you're on a feeding tube,
that that would go into play or a
cognitive impairment, uh, such that you need substantial
supervision.
So it's not when you need somebody organizing
your schedule, um, it's, or can't drive it's
when you don't want to leave someone alone
in the house.
Cause you don't know what they're going to
do, right?
They could leave the stove on.
(25:13):
Um, you don't know if they're going to
shower and if they shower, if they're just
going to put their clothes back on, um,
you know, those types of things.
Now, while it seems like those are very
high bars and they are high bars, 30
% of people will use their longterm care
policies, even with a 90 day elimination period.
And 50% of people will use their
policies with a zero day elimination period.
(25:35):
So still very, very high utilization of longterm
care.
And here's the catch 22, the longer you
live, the greater the risk of dementia.
Sure.
So it's the catch 22, you know, you're
healthy, you're feeling good.
You feel like, you know, why would I
ever need longterm care?
I am so healthy.
I do everything right.
But unfortunately that brings you into very old
(25:57):
age and very old age itself is what
often brings people into claim.
Linda, one of the objections that we traditionally
hear from people who were talking about the
likelihood of a longterm care policy being helpful
to their plans and to reach their goals
is the premiums.
It's not a steady premium, right?
(26:18):
So you're not saying your premium is $3
,000 a year.
The premium is not fixed for most, if
most, if not all policies, is that correct?
And there was a period where there was
some premium increases that were maybe higher than
people had thought.
So there are policies that do have guaranteed
(26:38):
premiums.
So all of the hybrid policies are guaranteed
premiums.
And it's important to understand what caused those
rate increases.
Those earlier policies were grossly underpriced.
I have one of those older policies.
And if I get a 400% rate
increase over my lifetime, it's still a good
deal.
(26:59):
I mean, that's how significantly underpriced those early
policies were.
And it was, and so it's actually important
that those increases take place so that the
companies will be able to be there to
be able to pay out those claims when
people go into claim.
And what I try to help people understand
(27:19):
when they do get rate increases is to
not look at the absolute dollar amount, but
look at the relative value, right?
And they were so smart to have purchased
it when they did.
And even if they have to lower their
values a little bit, the cost benefit of
these are incredible.
And we used to cover the total cost
of care.
I mean, you know, with, you know, $200
(27:41):
a day, 5% compound inflation and unlimited
benefits.
I mean, crazy, right?
You know, so now we're doing, you know,
we look at, I try to have at
least four hours of home care covered.
So if somebody says, you know, I expect
to live till, you know, I would go
into claim about 85.
Some might say 80, some might say 90.
We pick an age, we do the projections,
(28:03):
and we say, we'd want to know that
you could cover at least four hours of
home care.
Why?
Because this makes it easy for everybody.
So when you first need care, you bring
in that first four hours, because if you
don't have long-term care insurance, what happens
is you need one hour, one and a
half hours of care.
And then you find out that you have
to spend $160 for, you know, that one
(28:24):
and a half.
And then families say, well, we'll just do
it ourselves.
And that is the beginning to the end,
right?
It's just overwhelming to families.
So to have that four hours covered, magical.
And that four hours isn't just for home
care.
It's for when you visit your children or
visit friends.
You can stay at a friend's house and
bring your caregiver, so to speak, with you.
(28:45):
So you're never a burden to anyone that
you're visiting.
You can go to weddings, you can go
to, you know, graduations, and you bring your
caregiver, you know, once again.
So this is, you know, people think about
that once you need care, it's all over.
It's not true.
I travel with my parents all the time.
And, you know, when we go to hotels,
(29:05):
we have an aid, we call up the
individual home care agencies in the different states
that we visit, and have a caregiver come
into the hotel and provide the care.
And, you know, then you don't mind doing
little things like a little helping with the
toileting or going back to sleep because that
major care in the morning is taken care
of.
So four hours of care is where I
(29:26):
start.
It's typically about half the cost of assisted
living.
So it makes sense as a good starting
point.
And then if we have to go a
little lower, we'd do like three quarters of
the cost of care because most people would
have paid for that one hour anyways.
So at least the other three hours are
there to make it easy to accept that
full four hours of benefit.
(29:46):
This certainly isn't a financial issue, but I
bring it up because it's my mom.
She had home care for actually a billion
back when she retired, she was a home
health agent as a second as a post
retirement job.
So she did the work.
And then later in life, when she was
around 90, she needed home care.
(30:06):
But the reason that she would tell us
that she needed home care is she needed
help and she didn't want her family providing
her the type of help that she needed.
Absolutely.
You know, I don't want you to give
me a bath, son.
Right.
And, you know, I don't want I would
just want some helper, some companion to help
me do the work.
So it's more this this this issue is
(30:27):
more than a financial issue.
It's also, from my perspective, a quality of
life to have the resources or the insurance
that you can live a dignified life and
not be that burden to I hate to
use the word burden because a lot of
people don't think of that, but be that
need for the family to have to step
in and do things that just, you know,
(30:48):
better done by someone who's trained and someone
who has the temperament and experience to do
it.
Yeah.
And I think the other thing is that
when you have a long term care policy,
you're setting a direction to your children, right?
You're telling them I've already prepaid for my
caregiving.
I do not want you I never intended
(31:08):
for you to care for me.
Here's the plan.
So it's all set up for them.
I have a gentleman who has like over
thirty five million and he bought a long
term care policy for himself and his wife
because he wanted twenty four hour home care
and he didn't want the family to have
to think about what liquidate what to sell.
(31:31):
He wanted to make it easy.
And so, you know, people can spend, you
know, you know, ninety thousand dollars a year
on long term care if they have the
money because it is value.
So, you know, they just the more you
have, the more you can spend, because when
you have the money, it's a want and
not a need.
Right.
So he wanted to make it easy on
(31:52):
his children.
He knew he could make it easy on
his children.
And so he's making it easy on his
children.
And oftentimes when people are in those higher
wealth categories, they often can take more tax
deductions.
They may own businesses and they can take
tax deductions on the premiums and the benefits
are still tax free, regardless of whether or
not you take the premiums as deductions.
(32:14):
So we often talk to our clients when
they're talking about legacy planning.
We talk about a variety of subjects, whether
it's state planning or long term care planning
that, you know, although it's difficult to think
about these topics as you get older, it's
actually a gift that you're giving to your
family to resolve these things and resolve these
(32:34):
questions, resolve these care issues so that you're
if the time comes, you're not having to
have them rush around and have the stress
and potential strife avoidance as well.
So Linda, you're a great guest.
Lots of information there.
Can you give our listeners a website or
a way if they want to follow up
with you for questions, how they can reach
(32:56):
out to you?
Yeah.
So my website is longlifeplanning.com and you
can also email me at linda at longlifeplanning
.com.
Great.
We'll put both of those in the show
notes.
So if you're listening and you didn't catch
that, just open up the show notes and
you'll see how to reach out to Linda.
(33:18):
Linda, thank you for your time.
Thanks for the work that you do.
And Russ, thanks for co-hosting with me.
Of course.
Please tune in next week when we'll continue
on with various financial planning topics.
Until then, keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
(33:39):
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll free at 866
-771-8901, or send us your questions to
amr-info at wealthenhancement.com.
(34:02):
You're listening to Something More with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
provide investment advice on an individual basis to
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
(34:24):
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
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