Millions of American families need Long-Term Care Insurance to provide them with their choice of quality care at home or a facility. Yet, they erroneously think LTC Insurance is too expensive or have much of their savings tied up without a way to pay for a premium.
Sometimes an insurance agent or advisor has shown them plans that cost too much money. In some cases, they just tell an individual that Long-Term Care Insurance is not for you. Is the industry being snobbish, lazy, or both?
LTC Insurance Can be Affordable for the Masses
Millions of consumers who think they cannot afford Long-Term Care Insurance actually can! So why don't you know this? For at least the last fifteen years, I have considered myself a "senior advocate."
As a national voice in the reverse mortgage industry, I have been truly blessed to have been accepted into many segments of the national Long-Term Care Insurance industry. These are the noblest group of professionals who genuinely consider their client's needs above all else.
It has always concerned me that the Long-Term Care Insurance industry is geared toward the upper-middle-class and above. Maybe that is why most Long-Term Care Insurance experts agree that their market penetration is about 7%. This, of course, means that 93% of seniors that can protect themselves with this great product don't have it.
How sad, how truly sad.
Before I go further with this article, I must disclose that I am not a licensed insurance agent. Nor by any means do I consider myself a long-term care industry expert. But I do have what I feel is a unique perspective.
I also feel compelled to point out that it is the "industry" I am questioning, not the individual agents (remember, you can hate the game but don't hate the players).
A Unique Perspective from the Outside
In fact, over the last 15 years, I have had the privilege of meeting some of the most incredible professionals, thanks to my "connection" to the Long-Term Care Insurance industry.
So, what is this unique perspective, and exactly how did it come to be?
I am a career mortgage professional. Just last month was my 40th anniversary in the mortgage business. Fifteen years ago, my passion turned to reverse mortgages.
Let me give you a little summary of the reverse mortgage industry.
It is totally misunderstood by the public, the financial advisor world, and the press. All its detractors are relentless in spreading misinformation and half-truths about the product, and the major underwriters in the industry seem to come and go every five years. And our penetration of potential clients is around 6%.
Two Days in Texas Changed My Life
And then it happened, almost exactly twelve years ago. I was invited to speak at an event hosted in Texas by the National Long-Term Care Network (an industry organization of major agencies nationwide that market Long-Term Care Insurance.)
Those two days in Texas literally changed my life.
Now, the National Long-Term Care Network wasn't exactly "excited" to have a speaker, at their national event, on the topic of Reverse Mortgages. But as I said, I had an ace in the hole, and his name was Peter Gelbwaks, Chairman and one of the original founders of the Network. He introduced me to Mr. Terry Truesdell, the President of the Network.
Skilled Professionals with the Same Goal - Helping Families Prepare for Longevity
Thanks to Peter and Terry, I spoke to 100+ of the best of the best in the Long-Term Care insurance world. And it was an extraordinary one-hour session! In that hour, many of us realized that the goal of both our industries was almost exactly the same - to increase the quality of life for seniors, help them "age in place," and help "finance longevity."
I spent two days with these incredible people. And you know what I learned about the Long-Term Care Insurance industry? Do you know what so many of them told me?
They told me that Long-Term Care Insurance is totally misunderstood by the public, the financial advisor world, and the press. They said its detractors are relentless in spreading misinformation and half-truths about the product and the major underwriters in the industry seem to come and go every five years. And their penetration of potential clients is around 7%.
And I remember saying to myself, "am I at a reverse mortgage convention or a Long-Term Care Insurance convention?
And then I remember thinking, hmmm ...
So that brings us to today, twelve years later, and guess what? Nothing has changed in either industry!
Getting the Truth Out
Why can't these two incredible industries, whose intentions are so very noble, get the correct message out to the masses?
I'm not going to discuss why the reverse mortgage industry has failed to get its message out correctly. That would be boring to the LTC NEWS audience (and very sad for me.)
I will, however, give you my opinion on why a great industry like Long-Term Care Insurance hasn't done a good job communicating to you - the consumer.
And here it goes!
The Long-Term Care Insurance industry doesn't appeal to the masses because they don't show any desire whatsoever to deal with the masses (or at least I do not see it.)
I read so much content from so many great representatives of the Long-Term Care Insurance industry. And this is what I see from many of them:
Rather than letting your money sit in a low-interest CD or annuity, you can place a lump sum, say $50 or $100 thousand or more, into a Single Premium Life Insurance product with a Long-Term Care Insurance rider." They then talk about multiples of coverage based on your investment.
In my opinion, LTC Insurance is truly one of the best and safest products a person could ever own. Doesn't the Long-Term Care Insurance industry realize that the masses don't have tens of thousands or hundreds of thousands lying around in CDs or annuities?
Here is another very popular quote; "rather than let the money sit in your portfolio, yadda, yadda, yadda …."
The Masses Don't Have Portfolios
How about this one? "Traditional Long-Term Care Insurance is still very much alive, and for X amount of dollars per month, you can have incredible protection!"
The masses, most of us, are worried about inflation, gas prices doubling since last year, increases in their real estate taxes, homeowner's insurance, homeowner's association fees, increased medical costs, and a myriad of other rising costs.
Too Many People Think LTC Insurance is Only for the Affluent
Most people know they need this coverage; they know they need it badly, but they are scared to "increase" their monthly cash flow. The problem is that most people are not buying what the insurance industry is selling because they think Long-Term Care Insurance is only for the affluent. They get this idea from the industry, financial advisors, and insurance agents.
Now, just for a few minutes, please look at this like I do.
Mortgage Debt Holding Down Many Families
Millions of people age 65 and older still have mortgage debt which is holding them down financially. The average monthly mortgage payment is $1,487.
What if there was an option for the masses to eliminate their monthly mortgage principal and interest payment? How much of a difference could that make in the quality of anyone's retirement years?
Could most people now afford that Long-Term Care Insurance that they thought was "out of their financial reach for years?" In most cases, even after purchasing a Long-Term Care Insurance policy, an individual's monthly debt service still decreased.
You can have the needed protection and still have more money in your pocket!
If you are an insurance agent, would not a Reverse Mortgage be an option for clients to afford your great product? If you are a consumer - if you eliminated your mortgage payment, would your lifestyle not improve? Would you not have greater peace of mind if you could more easily afford to prepare for the future costs and burdens of aging?
Oh, we're not done yet.
A recent Harvard Joint Center for Housing Studies report states that 46% of senior homeowners still have mortgages! That means 54% don't!
Could these consumers, theoretically, secure a reverse mortgage, choose the "lump sum" option and purchase a single premium Long-Term Care Insurance product? Could they do this without increasing their monthly debt service? The obvious answer is yes!
We are talking about millions of seniors! Millions of consumers who think, "we can't afford Long-Term Care Insurance." One might think of them as "The masses," many of them are you and me. Many need a plan for future long-term health care but think LTC Insurance is too expensive either because they spoke to the wrong insurance agent, or their financial situation limits their cash flow.
Several Unarguable Facts
- Longer life spans have totally changed the retirement plans for all but the top 1% of our country.
- Senior home equity now exceeds 10.1 trillion dollars.
- For more than a decade now, every survey and study has revealed that a senior's number one fear is now "outliving their money!" Think about that; they fear running out of money more than death!
- Ten thousand people a day turn age 62 for the next 15 years.
Obviously, not all seniors will have the credit, income, or equity to secure a reverse mortgage. But, in my opinion, millions will. And by the way, there are now "proprietary reverse mortgages" that offer the same protections as the government-insured model, but the minimum age is 55 (not 62), and the maximum mortgage amount is $5 Million. We can help so many people get the protection they need.
Long-Term Care is an Important Topic for Anyone Age 55 and Older
Over the last several decades, breakthroughs in the medical world have been unprecedented! People are living longer than ever before.
But make no mistake about it, longer life spans are a double-edged sword, a mixed blessing, you may say. And with that mixed blessing comes the almost certainty that you will need care in your lifetime.
Why not have the best of care? Why not have high-quality care in your home, not in the home?
So, I challenge you, you the consumer. I challenge the entire Long-Term Care Insurance industry to open your minds and hearts to this idea to help more American families address the costs and burdens that declining health and longevity bring to both families and finances.
Let's have the conversation; let's start it right now on LTC NEWS! Send me your thoughts and your questions, and I'll answer them in this column on LTC NEWS and on my TV show - Click here and Ask Mike!
What say you?
If you are like most people, you probably don't have millions of dollars of assets. Sure, those with big estates need a plan for long-term health care since much of their money is tied up in stocks, businesses, and other financial instruments. These "millionaires" are concerned about catastrophic long-term care events. Like the rest of us, they have families they don't wish to burden.
The rest of us, the masses, have worked hard almost all of our lives, wanting to plan for a future successful retirement. Yet, when we look at Long-Term Care Insurance, we are shown policies that cost a lot of money. The agents, financial advisors, and even the insurance companies seem to be ignoring us.
The truth is that Long-Term Care Insurance can be very affordable for many American families if you have good health and you don't wait too long to purchase coverage. Most people obtain coverage in their 50s when they still enjoy good health, and premiums are much more affordable.
Most states offer Partnership Long-Term Care Insurance that will provide dollar-for-dollar asset protection. These policies shelter part of our estates allowing the policyholder to access Medicaid long-term care benefits without being poor.
Since Long-Term Care Insurance is custom designed, with the help of a specialist, you can obtain the appropriate amount of coverage without spending more than you need.
However, remember that long-term care is more than just a cash flow problem - it is a family problem. Your adult children usually get tagged to become your caregiver without any advance planning. The responsibility of caregiving usually falls on one daughter or daughter-in-law who is untrained and unprepared for this demanding role.
Long-Term Care Insurance safeguards income and assets, ensures access to your choice of quality care services, including in-home care, and reduces the stress and anxiety otherwise placed on those you love.
As Mike Banner stated, some people can even use a reserve mortgage to fund their Long-Term Care Insurance.
Get Expert Help in Planning
Experts recommend seeking the help of a qualified and experienced Long-Term Care Insurance specialist to help you find the right coverage. A specialist will match your age, health, and family history with the right coverage at the right price.
Long-term care is a very specialized area, and few insurance agents and financial advisors have the expertise. Seek the help of a specialist who represents the top companies. Top specialists will often have over 500 clients with Long-Term Care Insurance, some in the thousands. This experience is necessary as every company has its own underwriting criteria. Plus, premiums can vary over 100% between insurance companies.
A specialist will save you money, and you will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.
Planning Tools and Resources on LTC NEWS
You can find many tools and resources on LTC NEWS to assist you in your research for a planning solution or help your family find the appropriate care for a loved one at the time of crisis.
To help you plan the costs and burdens of changing health and aging, LTC NEWS has put in place several resources, including:
- The LTC NEWS Cost of Care Calculator will show you the current and future cost of long-term health care services where you live. Plus, each state has vital state-specific information you should know - Cost of Care Calculator - Choose Your State | LTC News
- The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area.
- Compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
- A detailed tax guide that includes available tax incentives can be found by reviewing the Long-Term Care Tax Benefits Guide.
Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
Finding Quality Care for Mom or Dad
Start by reading our four guides -
- Finding Quality In-Home Care | LTC News
- Adult Day Care Centers (ADCCs) | LTC News
- Assisted Living and Memory Care Facilities | LTC News
- Finding a Quality Nursing Home | LTC News
If they are lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea.
Get Help in Filing a Long-Term Care Insurance Claim
Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care. If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help.
LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work, free with no obligation.
Get help finding quality caregivers or long-term care facilities and get recommendations for a proper care plan, whether a person has a policy. - Filing a Long-Term Care Insurance Claim | LTC News.
Benefits of Reverse Mortgages
Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance.
Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, even help with cash flow during your retirement.
Learn more by asking questions to an expert. LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages.
- Just "Ask Mike." - Reverse Mortgages | LTC News.
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You can write a story or ongoing column for LTC NEWS. You can write about many topics, including aging, caregiving, health, lifestyle, retirement planning, and long-term care, to name a few.
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