If you have been paying attention to Fridays with Fisher over the past month, I’ve focused a lot of attention on the new Asset Care Consumer Report. (Follow this link to the Fridays with Fisher archives to see past posts.)
Today, I am breaking that cycle. I want to share some thoughts on why extended care (long term care) needs to be included in retirement planning.
This is something that has been discussed a million times, by a million people, and the results end up being the same – few people acknowledging and addressing the impacts that an extended care / long term care car have on their lives, finances, future plans, and family.
According to a survey conducted by the Arctos Foundation and HCG Secure, about 10% of Americans have long term care insurance coverage. (https://hcgsecure.com/independent-research/)
Why are so few policies being written to address this issue?
As my friend Elaine Marvin often says: “why?” followed by a long pause and a rapid fire of “why, why, why?”
This seems to have been the case for decades. In fact, the number of policies written year over year has reduced. And, we continue to do the same thing, tell the same stories, and hope for a different outcome. Same stuff, different day, damn result.
The cycle has to stop and, as we have seen from Washington state, it is a big concern. In the September Coffee Break – Elaine Marvin, Niki Johnson, Jen Wagoner, and I talk about “state sponsored” long term care – the episode dropped on September 12.
But, that is just a shameless plug for our monthly webcast – what I want you to focus on is why are so few people acting when we have all directly or indirectly seen or felt the effects of an extended care / long term care need from a family member, relative, or friend.
In a report from the Office of the Assistant Secretary for Planning and Evaluation at the U.S. Department of Health & Human Services:
“More than one-half of older adults, regardless of their lifetime earnings, are projected to experience serious LTSS (aka long term care services) needs and use some paid LTSS after turning 65.
However, 56% of older adults in the top lifetime earnings quintile receive some paid LTSS, and the likelihood of nursing home care does not vary much by lifetime earnings.”
For the full report – https://aspe.hhs.gov/topics/long-term-services-supports-long-term-care
So, if there is this “risk element: out there why is it not being addressed? Is it being ignored? Is it being overlooked? You tell me.
Why are more extended care / long term care policies not being applied for?
Here are my hypotheses:
- Believe that it will not happen
- Believe that can self-fund
- Believe that Medicaid & trust planning will address the issue
- Believe that cannot qualify due to health
- Believe a plan costs too much or do not have adequate income/assets
- Believe Medicaid or other social program will pay
- Do not believe in an insurance solution
What are your thoughts?
I have a follow-up question – did you respond through the lens of a client/consumer, an agent/advisor, or from some other spot?
I’m willing to bet that if you change the way you look at the question, your response might shift.
And, remember these statistics from the OneAmerica LTC Consumer Study:
So, let me ask the question again, why are there so few policies applied for?
Like my high school English teacher always challenged us, “take that home with you tonight and think about it.”
Maybe, we know the answer but are unwilling to admit it.
As usual, if you have questions about any Care Solutions product, please contact my internal Justin Fox at (844) 658-3725 or via email at justinfox.isp@oneamerica.com
Please, join Elaine, Jen and me while we share some information about the advantages of true long term care benefits riders and how they might play given the new legislative agendas taking place in many states. A new episode airs the second Tuesday of each month.
Again, don’t forget that your clients who are over 75 and own annuities can secure long term care insurance. That is what the million dollar annuity strategy is all about. Learn more about it at https://fridayswithfisher.com/million-dollar-annuity/.
My “big ask” of you for the million dollar annuity strategy is to identify 3 or 4 annuity owners 75 or older who might be viable candidates for our leverage strategy then give us a call.
Fridays with Fisher 
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