Episode: Long Term Care Insurance for single women

Long term care insurance planning for single women, how to get best costs and compare. Jesse Slome, director of the American Association for Long-Term Care Insurance explains

Video Transcription

Hi, thanks for watching this video. I'd like to have a very frank and honest conversation with women that I call single women, but you may call yourself one who lives alone because you're divorced, widowed, however you want to categorize it. This is important information, I believe, for you. My name is Jesse Slome. I'm the director of the American Association for Longterm Care Insurance. I've been involved in longterm care since the late 1980s and there's a lot of misinformation out there, I believe, that I'd like to convey with you.

First of all, why is longterm care planning and longterm care insurance a vital discussion for single women today? Well, the truth is, whether you're single today, the chances are you're going to be single at some point in your life, and the single question that you want to ask is, when that happens and when you need care because of aging, who will your caregiver be? Chances are you may not be able to answer that or you're looking and saying, "Gee, it might be a family member.".

Did you realize that about 70% of women, after they become age 85, are living alone, they're single. The same isn't true for men. Now, there are a whole number of reasons for that because women have longer lives, higher rates of disability, chronic health problems that are associated with age and lower incomes and lower pensions, lower social security benefits than men. Longterm care planning is a very important topic, I believe, for every woman who's single or living alone to think about because the chances are you just won't have the resources.

So you're at much higher risk and if you need some numbers to prove that, just consider these, 70% of nursing home residents are women. Two thirds of all longterm care insurance claims are women. Two thirds of the benefits are paid to women. While most people consider longterm care insurance and associated with nursing homes, the fact is most care and most longterm care insurance pays for care your own home, which is where you want to be.

So the consequences of living a long life is a very real situation for women. Again, the question that you have to consider before we start talking about some solutions is, what does this mean to you? Who will be your caregiver? What plans have you made? How will you deal with the fact that you probably have lower savings, lower pensions and social security than a man? Some thoughts that I'd like to share about longterm care insurance.

It's not a solution for everybody, by the way, I'm not an advocate for everybody to have longterm care insurance. But I am an advocate for everybody to at least consider it and think about it. Most agents, and as I said, I've been doing this for many decades. Most insurance agents treat single women as if they were 50% of a married couple. That is my opinion, this is my opinion, is not the right way to deal with it. It's entirely the wrong approach and that's because costs for longterm care insurance are higher for single women than they are for single men.

That's because the risk is higher and the benefits and if you think about it, so the cost is higher and at the same time I explained that women have lower income. So there's a dichotomy. I'm a firm believer in what I call the good, better, best approach to long term care planning. Let me explain briefly what that means and I challenge you or say to you, you should challenge your insurance professional to talk to you about this approach.

A good plan of coverage is a fixed amount of benefit coverage. In this case it's $164,000 of coverage, which will pay for quite a bit of care in your own home and quite a bit of care if you need it in a skilled facility. If you look at the rate for a 55 year old single woman today, the average is about $1,360 a year in 2015. So about $100 a month, a better plan is many of the insurance companies today can offer you a base plan of coverage with an option to buy more coverage in the future.

That gives you the flexibility to change. Maybe you're 55, 56 today, five years from now, your situation could be different, your income could be different. Your insurance that you buy today has the benefit of the flexibility to buy more at a future point without having to health qualify again. The best coverage is coverage that includes a built in growth factor. Typically today it's about 3%, now that's going to double your cost over that good plan of coverage and if you can afford it, the best plan is always the best plan.

It's certainly more benefits for more costs, but if you are cost conscious or price sensitive and many single women, who call the association are, I would tell you that a good plan is just that, it's good and you will not be sorry, come claim time that you have that amount of coverage. Let me just quickly share, because prices for longterm care insurance increase based on your age when you apply.

So the rates for a 62-year-old women, probably not as high as one would think is often what you read in the media is misleading and inaccurate. A good plan of coverage for a 62 year old single women, the average is 1,675, still affordable for many people, more than most people think. So let me share a couple of things, where a lot of people who are watching this online or on a YouTube are doing a lot of online research about longterm care insurance.

I will tell you that's very good, but here's where those articles get it wrong. What they talk about are average prices and what they often talk about are heavily loaded products, often the best with all kinds of bells and whistles, prices from one insurer to the next vary, there is never an insurer that is always the cheapest. There's never an insurer that's always the most expensive. Features and options and discounts vary.

Never one that has all the best. Never one that has all the worst and acceptable health values vary. So it is very important, if you're taking some prescription medicines or if you have some health conditions that you shop your health as well as looking for the best price. So how do you do that as a single woman? 

Well, let me share three questions. We believe that it's in your best interest to work with a longterm care insurance specialist.

They are someone who represents you. They're a broker. They can offer you plans from most of the leading carriers. Here are three questions though to identify a good specialist. First, how long have they been selling longterm care insurance? I will tell you that this is a complex business. In my opinion, at least three, often five years of experience are important and you should be asking the agent if he or she has that level of experience.

The second question is how many plans, how many longterm care insurance policies do they sell a year? A good specialist, at least one a week, sometimes two, sometimes three. Many of them have multiple cases. They focus on this business and that's what you want. When you have a heart attack, you may go to emergency care, but you want a darn good cardiologist talking to you and treating you because that is a specialty and your life depends on it.

The last question to ask is the most important, it involves insurance industry jargon. The word is appointed, so any agent can talk to you about any insurance company that's out there, but they may not be able to sell you that policy. The issue is, if they can't sell you the policy and earn a commission, they're not going to tell you it's the best. Appointed means that they can sell you and earn a commission for selling that policy.

A good specialist today is appointed with between three, five, six and often more insurance companies. So you want to ask them the word appointed. How do you find a specialist? Well, you can obviously do your own homework. Talk to your financial advisor, the American Association for Long-Term Care Insurance would be absolutely pleased and delighted. That is why we exist, besides advocating and educating consumers. If you go to our website, www.aaltci.org and click on the quotes button or type in quotes, you'll be connected with us and we will find you a good specialist, who is exactly the kind of person that I described.

Lastly, I do want to encourage single women to learn as much as you can about this topic, especially if you're between your mid-fifties and your mid-sixties. We offer a number of free guides online. They're free for you to read online, there's no sign in required to access them. Just go to our www.aaltci.org/guides and you can read, there are currently, I think six of them. They'll give you tips on saving money, tips on how to find better product options and advantages. I know that you'll find them helpful. Thank you for watching.

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