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Long-Term Care Conversation

What is Long Term Care?

  • It is not a Place (Assisted Living, Nursing Home, etc.)
  • It is not Insurance
  • Long Term Care is simply a disabling event that happens as we age. And if we don’t plan for it, it will have severe consequences on our family's well-being

What is the Risk?

  • A Long Term Care event is simply a longevity risk
  • If you live into your 80’s, 90’s or even 100, it is reasonable to assume that just due to the “frailty of aging” that you might need some stand-by assistance for a period of years

What are the Consequences?

  • The issue is NOT the risk of you needing care
  • The issue is the severe consequences (Emotionally, Physically & Financially) to your family if you do need care and there is no plan

Personal Consequences

  • If you ever need care, your life doesn’t end. However, someone else’s life or lifestyle will end
    • Providing care for a chronically ill person often makes healthy caregivers chronically ill themselves (Is that the plan?)
    • If a child has to step up, it will severely impact them, requiring them to change the way they conduct their own life, family and career (Is that the plan?)

Financial Consequences

  • Paying for care disrupts every plan created to secure financial commitments/lifestyle (Is that the plan?)
  • A  Long Term Care event is simply a monthly cash flow issue

 

Creating a Plan of Care

All we want to do is create a “Plan of Care” for you that:

  1. Allows you to remain safe in the comfort of your own home
  2. Protects the emotional and physical well-being of your spouse and children by allowing them to manage/supervise your care, NOT provide your care
  3. Protects the financial commitments that you have set up for your family, which will allow them to maintain their lifestyle

What is going to pay for the Plan?

Medicare

  • Is Health Insurance
  • Even if you get through all the red tape, which there is a lot of, the best case scenario is that Medicare will pay for up to 100 days of care, which is “short term care,” not “long term care”
  • In addition, the care is received in a Skilled Nursing Facility, not in your Home. It doesn’t fit your plan.

Medicaid

  • Is a viable solution for clients that don’t have any money (welfare program). Which means it is often a very expensive solution for clients with money.
  • In addition, the care is received in a Skilled Nursing Facility, not in your Home. It doesn’t fit your plan.

Self Pay

  • Long Term Care is a “new expense” that creates a monthly cash flow issue
  • The only way you can consider self paying  is if you can come up with an “additional” $4,000 ‐ $8,000 a month (or more) of income without disrupting any previous financial commitments/lifestyle
  • Even if you can cash flow the new monthly expense, do you really want to pay full retail cost for the care? (especially knowing whole sale cost is available)
  • Where do we pull the money from? (what about Market Timing/Conditions, Liquidity or Taxes?)

Long Term Care Insurance

  • Transfer some of your money in some form or fashion and transfer some or all of the Long Term Care risk to an Insurance Company
  • Keep in mind that Long Term Care Insurance is NOT the Plan, rather it helps pay for the Plan

 

A reasonable person will realize that Long Term Care Insurance is the only viable solution to help pay for their “Plan of Care” and it should be at least considered.