Aaron Eisenach, CLTC
From my earliest memories I have known someone with Alzheimer’s Disease – the fatal illness that robs the mind and body, usually at advanced ages but sometimes much earlier in life. I remember occasionally visiting my grandfather, usually after Sunday morning church services, in the skilled nursing facility he lived in for 10 years. I can still breathe the smells and hear the groans for help from residents in the hallways of the facility. I could hardly wait to get in the car and escape the image of the man that I only knew as a prisoner to a crippling, horrific disease.
Imagine the heartbreak when we started to realize that my father was beginning to show symptoms of the same condition in his late 50s. Thankfully, before signs of dementia crept in like a mind-robbing thief, he took my advice and purchased long-term care insurance. Because of his familial experiences, my father realized that the coverage was not for him per se. It was for my mom, and his children and grandchildren more than it was ever for him. When dad resigned from his Presidentially-appointed position with the federal government, a few newspaper articles, banquets and receptions honored him while he was still mostly aware of his surroundings. When dad could no longer be left alone, my mom also quit her job at the local veterinarian clinic and began her new vocation: full-time caregiver.
Dad’s long-term care insurance policy was structured to cover care at home, in an assisted living or skilled nursing facility, adult day care or hospice. Its benefits were unlimited: the coverage could never be exhausted regardless of how long he might have needed care. Mom resisted turning on the benefits for many months (it seems that she held sacred the “…for better or worse, for richer or poorer, in sickness and in health” part of the wedding vows) until she finally realized that she needed help in caring for dad. Eventually a home care agency was hired to help take care of him a few hours per day, freeing her to go to the grocery store, the doctor’s office, or see a grandchild’s piano recital. In other words, the long-term care insurance gave her some of her life back.
Eventually the combined care provided by mom and the agency wasn’t enough. After a health scare of her own, mom called me and wanted to know my feelings about placing dad in a nursing home permanently. Realizing that my dad’s chronic care needs were making my mother chronically-ill herself, I told her that she had my absolute encouragement to do so. At that point she said that she had already talked to the other children and that they also agreed. A facility was chosen that was close to the homes of three of the four children. Mom and dad’s house was sold, allowing mom to live closer to the facility so that she could be there every day possible as his loving wife and his personal care advocate, which is so vitally important regardless of the quality and reputation of the facility in which your loved one resides. As an example of her compassion, after dad had passed away in the early morning hours she fed his roommate breakfast later that same day. All but $20 per day of dad’s 18-month stay was paid-for by his insurance policy. In fact, not a single penny of mom or dad’s retirement plans was spent.
These experiences and God’s hand led me to my passion for, and career in, telling others about the importance of planning ahead for the possibility of needing extended care services. For more than 18 years I have listened to clients tell me of their own stories of caregiving. The stories lead to similar conclusions: the emotional and physical strains and pressures of being a caregiver are devastating, adult children often do not contribute equally to the care needs of the parent(s) which can lead to resentment and in-fighting, the lifetime savings of the care recipient was depleted much quicker than ever imagined, relying on Medicaid should be avoided, the lack of planning leads to chaos, and more.
I believe that everyone needs a plan for care, not necessarily insurance. Without planning, your loved ones may be forced to make tough decisions and perhaps provide care services they may not be equipped to handle. Planning helps to mitigate the devastating emotional, physical and financial consequences of a long-term care event. Critical components of a long-term care plan include:
– Who will be my caregiver if I am to remain at home? Will this person be physically and emotionally able to take care of me? Will he/she leave a career to be my caregiver? Sometimes the bigger question is who do I not want to set aside his or her life to care for me?
– What type of care might I need? Care at home or in a facility? If I want to stay at home, is my home adaptable to such a situation? If I do not have a spouse/partner/child living with me, can I afford 24/7 home care?
– Where might I receive care? Will my children living in another community or state wish to move me closer to them?
– When is it likely to happen? Might I avoid dreaded diseases such as Alzheimer’s yet live long enough to become frail and fragile and need help as a normal part of aging?
– Why might I need extended care? Are there reasons to believe that I am more likely or less likely to need help than the average person?
– How will we finance and coordinate my care needs? If retirement funds and income are diverted to pay for care, how will our ability to meet ongoing obligations to loved ones be affected? Who will make decisions on my behalf?
I find that my clients’ planning goals often align nearly perfectly with my own goals:
1. Keep me at home for as long as possible without destroying the lives of my loved ones around me, especially my spouse if living, followed by my children
2. Preserve the retirement plan and other assets for my spouse and children and other worthwhile causes
3. Keep intact our other planning devices such as the estate plan, charitable giving plan, tax avoidance plan, business succession plan, the special needs of a disabled child, etc.
Not your parents long-term care insurance. As a care planning expert, I represent myriad solutions that often times involve insurance at some level. The main function of any of these products is to provide monthly cash flow to help the client stay at home if possible – for as long as possible – or afford the best facility in the area. The best-known solution, ‘stand-alone’ or ‘traditional’ long-term care insurance, has gone through significant change including higher premiums and fewer insurance carriers than before. Yet these policies still offer tremendous value and are now more responsibly priced than ever due to decades’ worth of claims data. Those of us specializing in LTC planning are seeing tremendous growth in products that combine long-term care protection with life insurance and annuity contracts. Clients are not necessarily interested in the life insurance of annuity portion of these policies – they are attracted to the guaranteed premiums, cash surrender values, and a death benefit if not used for care. Other products worth considering include short-term care insurance, critical illness policies, and enhanced income riders on fixed indexed annuities.
It’s not about you! It’s about your family. It’s about allowing your partner or child to serve as your family member instead of your care provider. It’s about telling the family that they need not worry because there is a written, funded plan in place in case something happens. And it’s about making sure your spouse/partner never has to turn to the children for support someday because income and assets were spent on care.
It’s not about statistics. We all like to think the worst will happen to someone else, not us. But as we age we realize that obligations to others do not subside, they increase. Clients, especially males, ask me about the average length of time spent in nursing homes, the average cost of care, and the likelihood the average person will use the policy. Does it really matter if the odds of needing extended care are, say, 25% after age 65, or if they are 70% as reported by the U.S. Department of Health and Human Services? NO! What matters are the consequences to your loved ones and your lifetime savings in the event you need extended care.
Living a long life is now a likelihood. Planning for it is a necessity. Explore the choices, and don’t be afraid to involve professionals. If you’ve endured difficulties in managing your parents’ or grandparents’ care, imagine for a moment delivering those same hardships to your children. It may be just the inspiration you need to plan a different course for yourself and your family.