April 19, 2018

Why Everyone Needs a Long-Term Care Plan

In my previous blog I explained why I began, at age 26, a career in helping people plan for one of the biggest risks in life: needing chronic care for an extended period of time. Now, twenty-one years into my profession, I can absolutely say that everyone needs a plan for extended care, not necessarily LTC insurance!

According to the most recent data from the U.S. Department of Health and Human Services, 52.3% of persons turning 65 will need long-term care. Certainly, some care needs are just a few weeks or months. In other cases, the care event can last 10 years or more. In fact, 29.2% of those incurring LTC expenditures are expected to spend more than $250,000. The Alzheimer’s Association reports that caregivers for people with Alzheimer’s or other dementias provided approximately 18.2 billion hours of informal, unpaid assistance in 2016 valued at $230 billion – nearly 50% of Walmart’s revenue in 2016! Who are these caregivers? 80% of home care for people with Alzheimer’s and other dementias is provided by unpaid caregivers, most often family members. In my experience, family caregivers overwhelmingly agree that the emotional and physical consequences they experience are far more devastating than the financial costs.

Without planning, you or your client’s loved ones may be forced to make tough decisions. Do we make a placement into a nursing home or is someone willing and able to provide informal home care? Can we afford the best facility in the area or can we bring in 24/7 home care? Planning for extended care 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, an assisted living facility or a skilled nursing facility?
  • Where might I receive care? Will my children living in another community or state wish to move me closer to them? Would one of my adult children want me to move in with them, or would one of my adult children care to move in with me?
  • When is it likely to happen? What if I need care in my 50s, 60s, or 70s? Might I avoid dreaded diseases such as Alzheimer’s or Parkinson’s but 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 much can I rely on family history?
  • How will I/we finance and coordinate 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?

LTC Planning Goals

I find that my clients’ planning goals often align nearly perfectly with my own personal reasons for owning some form of insurance against chronic care:

  1. If I need extended care, keep me at home for as long as possible without destroying the lives of my loved ones around me. Let them be my care manager, not my 24/7 caregiver.
  2. Preserve the retirement plan and other assets for my spouse and children and other worthwhile charitable pursuits.
  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.

What about those who are single, divorced, or widowed? Most wish to stay at home without running out of money. And if an assisted living facility or nursing necessary, who wouldn’t want the best facility possible?

Without a plan for care, someone, not just the person needing care, will suffer the consequences. Often times the person in charge of making decisions may become confused and frustrated regarding options and choices. Someone in the family may feel that there is no choice but to get involved to make sure the loved one is safe and getting good care. And because the children typically do not contribute equally physically, emotionally, or financially, resentment and hard feelings can erupt.

The Role of Insurance

Simply put, the myriad insurance products on the market today (life insurance with accelerated benefits, hybrid asset-based policies, traditional LTC insurance, short-term care insurance, hybrid LTC annuities) provide funds to help meet the planning goals detailed above. In other words, proceeds from the insurance policy provide cash flow so that a loved one can stay at home as long as possible or afford the best facility around. Because a third party is helping to pay for care, the spouse/partner/family has the freedom to make the best choices for all concerned. And if there is a surviving spouse or partner, the money provided by the insurance policy means more money to live on and a better lifestyle.

My next blog will focus on why affluent clients need a plan for care, and local care costs. Until then, if there is anything I can do for you or your clients, please visit www.AaronEisenach.com or call 303-659-0755.

Thank you,

Aaron R Eisenach, CLTC

AaronEisenach.com

 

Aaron R. Eisenach has specialized in long-term care planning and insurance-based solutions for 20 years. His passion for this topic stems from losing both his father and grandfather to Alzheimer’s Disease. As an insurance wholesaler, Mr. Eisenach represents ICB, Inc., the nation’s first general agency specializing in LTC insurance. As an educator, he provides workshops to consumers and teaches state-mandated continuing education courses to Colorado insurance agents selling LTC products. As a broker, Mr. Eisenach is the proprietor of AaronEisenach.com and partners with financial advisors and agents who trust him to work with their clients. He is the immediate past president of the Producers Advisory Council at the Colorado Division of Insurance, serves as president of the nonprofit LTC Forum of Colorado, Inc, and has appeared on 9News and KMGH Channel 7. He recently served as an expert witness in a court case and was a contributing author to the American College curriculum on long-term care insurance.

Introduction, and Lessons from Alzheimer’s Disease

Editor’s Note: CBA CLE Legal Connection welcomes Aaron Eisenach to the blog. Aaron Eisenach has specialized in long-term care planning and insurance-based solutions for 20 years. Read more below.

I am very excited to submit my first blog on CBACLELegalConnection.com! Some of you will recognize me from recent Elder Law and Estate Planning Retreats. Others may have heard me lecture at Senior Law Day or provide CLE courses on long-term care planning. Or perhaps you have read my chapters in Elder Law in Colorado and Senior Law Handbook. But in case our paths have never crossed, please allow me to further introduce myself.

I am a long-term care planning specialist representing myriad insurance companies and products that help people protect their family and finances from the greatest risk left in life: needing extended care.  I wear three hats in my professional life. First, I assist other advisors and agents that do not specialize in long-term care insurance and choose to trust me with their clients.  Second, I serve as a wholesaler of LTC planning products to agents in Colorado and many other states. And third, as an educator I am certified by the Colorado Division of Insurance to teach state-mandated continuing education courses that all resident agents must complete in order to offer LTC coverage. Whichever hat I’m wearing my goal is to help families mitigate the emotional, physical and financial consequences of an extended care event.  My steadfast belief is that everyone deserves a serious conversation about the potentially devastating emotional, physical and financial consequences needing long-term care can cause.

My passion for this niche in the insurance industry stems from witnessing my father’s and grandfather’s battles with Alzheimer’s disease and the lasting impact on family and finances. I remember occasionally visiting my grandfather, usually after Sunday morning church services, in the skilled nursing facility in which he lived for 10 years. I can still breathe the smells and hear the groans 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. Thankfully, before signs of dementia crept in to rob him of his cognition, 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 a prestigious job, 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 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 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 very early morning hours she fed his roommate breakfast later that morning. 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 on care.

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 20 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.

My next blog will focus on the premise that everyone needs a plan for care (not necessarily insurance), the components of a care plan, and common planning goals. I will also present the latest cost of care data for Colorado. Until then, if there is anything I can do for you or your clients, please visit www.AaronEisenach.com or call 303-659-0755.

 

Aaron R. Eisenach has specialized in long-term care planning and insurance-based solutions for 20 years. His passion for this topic stems from losing both his father and grandfather to Alzheimer’s Disease. As an insurance wholesaler, Mr. Eisenach represents ICB, Inc., the nation’s first general agency specializing in LTC insurance. As an educator, he provides workshops to consumers and teaches state-mandated continuing education courses to Colorado insurance agents selling LTC products. As a broker, Mr. Eisenach is the proprietor of AaronEisenach.com and partners with financial advisors and agents who trust him to work with their clients. He is the immediate past president of the Producers Advisory Council at the Colorado Division of Insurance, serves as president of the nonprofit LTC Forum of Colorado, Inc, and has appeared on 9News and KMGH Channel 7. He recently served as an expert witness in a court case and was a contributing author to the American College curriculum on long-term care insurance.