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Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC

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Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC, is now the Strategic Relations Director for the Krause Agency following their acquisition of USA-LTC. Levin is the past three-term chairman of the board of the National Long Term Care Network and the past president and CEO of USA-LTC. Levin has been in the long term care industry since 1999, during which time he has been an award-winning agent, district manager, regional sales manager, marketing director, associate general agent, general agent, and divisional vice president. Levin is also a former practicing Attorney-at-Law, court-appointed arbitrator and is a retired U.S. Army officer. In addition to his various law and life and health insurance licenses, and the above designations, Levin has also earned Green Belt certification through GE’s Six Sigma program and is a graduate of GAMA International’s Essentials of Leadership and Management. He has also taught Managing Goal Achievement®, Integrity Selling® and The Way to Wealth® to hundreds of leaders and salespeople over the past fifteen years. He previously possessed FINRA Series 7, 24, and 66 licenses. Levin earned his Juris Doctor from The John Marshall Law School, his MPA from the University of Oklahoma, and his BA from the University of Illinois-Chicago. He is also a graduate of the U.S. Army Command and General Staff College and the Defense Strategy Course, U.S. Army War College. He is a published author of fourteen books in a wide range of genres. Levin may be reached via telephone at (800) 255-1932. Email: donlevin@krause.com.

Talking About The Long In Long Term Care

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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Talking About The Long In Long Term Care

Twenty-five years ago, the average age of our clients purchasing long term care insurance was sixty-eight. The average age at the time of claim was about seventy-nine years, or a mere eleven years into the future. Claims were averaging about 2.8 years in length, and a three-year policy was usually more than adequate to address these needs. Today, the average LTCI purchaser is fifty-six years of age, and may not require access to these benefits until age eighty-one, some twenty-five years into the future. Fueling the drop in the average purchase age are increased inquiries from clients in their 40s and 50s. Also noteworthy is the fact that stays in care are growing longer for a variety of reasons that we will address later in this piece.

For the same reason that so many people we encountered for years and years did not have a will, durable power of attorney, healthcare power of attorney, or had not made any plans regarding their estate, nobody wants to confront their own mortality, and much less their morbidity, hence the lack of long term care planning. This is changing due to the dictates of Society, and the ever-changing ratio between those requiring care and the number of available (paid and unpaid) caregivers.

Fortunately, or unfortunately, the Baby Boomers are now firmly recognized as the Sandwich Generation. Often caught between the need of financially supporting and/or providing care for their aging parents, as well as financially supporting the higher educational pursuits of their children, as well as potentially welcoming some post-college age children back to the family nest, they are being forced to address their own future needs. This has prompted a great deal of thinking about the future and not wanting to in turn be a burden on their children.

Elder Law and Estate Planning attorneys, as well as financial advisors and insurance producers, are being asked about long term care insurance as a means with which to address this critical aspect of the estate plan to shelter assets to pass on to family, to qualify for Medicaid, and to remain in control of their lives.

We are hearing the “I can save money by waiting to purchase a policy and keep the money in a savings or money market account,” less and less now because, no matter how long the client pays for the insurance coverage, they will see virtually all the premium money invested returned within the first 90-120 days of claim. Also tempering this argument is the knowledge that health can change in the blink of an eye, and the greatest cost of waiting is often eligibility for the desired coverage.

For all the foregoing reasons, the long term care industry certainly remains a niche market ignored by large segments of the insurance, financial advisory, and legal planning communities. This needs to change because more clients are recognizing the need for this planning and will seek out those professionals who are in the position to advise them on this critical planning product. In other words, if you are not able to provide this desired coverage to your client, it is incumbent to forge strategic partnerships with qualified LTCI providers that will allow you to retain these clients.

Because of new and innovative advances in medical practice and procedures, combined with extensive advances in the pharmaceutical industry, life expectancy continues to climb in our country, leading us to live longer and to die slower. While increasingly long term care insurance claims continue to originate in the home, now fully 73 percent, there are more assisted living, memory care, and skilled nursing facilities being constructed and dotting the landscape. Many of these facilities offer a full spectrum of continuing care ranging from independent living to full-blown nursing care. What they all have in common is an ever-increasing price of admission.

While remaining at home and “aging in place” is still the most desired choice of those requiring assistance with their activities of daily living, these facilities are often the alternative elected by patients and families alike, when it becomes evident that they are required for older adults to maintain their physical, mental, emotional, and social health as they continue to age, and the family is simply not in the position to provide this care.

The same advances that allow us to continue to live longer are often predicated upon earlier diagnoses, which can often lead to even longer periods of required care. Longer periods of treatment, whether at home or in a facility, come with an ever-increasing price tag, as long term care costs continue to rise at about four percent per annum.

The Baby Boomers who have been unpaid caregivers to the tune of approximately $470-$600B last year or endured lost wages, promotions, or Social Security benefits totaling some $3T, are now committed to planning for their own futures and precluding the need to burden their own children with the onus of their own care.

For the wealthier client who has previously believed that they can shoulder the financial cost of this burden, these costs are often higher than for their middle-income counterparts because they are not willing to sacrifice the quality of either their standard of living or the nature of care received. As a result, the wealthy more often spend far more money for their care by virtue of their choice of caregivers or the facility in which they elect to reside. A long term care insurance policy allows them to temper this scope of these costs.

To these wealthy clients we offer the alternative of insuring their portfolio against catastrophic loss associated with long term care by leveraging their return on investment or income on savings with the purchase of a modest policy. Likewise, we can assist them by putting in place a “stop-loss” measure in which the purchase of an asset-based life insurance policy with a qualified long term care insurance rider will often provide them with a fivefold increase of long term care protection on their investment, while allowing them to retain a growing cash value in the plan and a desired death benefit.

Some twenty-five years ago I sat with a retired orthopedic surgeon who suggested to me that “given twenty-four hours he could put his hands on ten million dollars in cash.” This very elegant gentleman and his wife owned three homes, several cars, enjoyed country club memberships near each home, and clearly could afford to absorb the costs associated with their long term care. The premiums for the modest plans that I had designed were “chump change” for them, and as a result begged the question of why they were seeking this coverage. When I posed this question to him, he looked me square in the eye, and said, “Look. If my wife suffered a stroke tomorrow, I could take care of her as a doctor. But as her husband, I know that I would be an emotional basket case. I like the idea that with one phone call,” he mimed picking up a phone, “you guys will be here to put together a plan of care, install grab bars, raise the commode, and widen doorways if necessary. That is why we are purchasing these plans today. Besides which, as you have ably shown me, the annual premium for this insurance is a whole lot less expensive than the monthly costs that we would incur.” The interview with this gentleman and his wife remains one of my most pleasant memories from the industry because, once educated and given all the information necessary to make an informed decision, he did just that (and referred several of his friends to me) because of the perceived value that I had brought to him.

First, the reason most cited by clients who are investigating their options pertaining to containing future long term care costs or more accurately to enact a plan that addresses access to quality care, preservation of assets, maintaining independence and decision-making ability, is the overwhelming desire not to be a burden on their family and friends. Secondarily is the desire to retain their dignity when forced to seek out assistance for activities of daily living or because they are experiencing some level of cognitive impairment.

As both an attorney and a long term care insurance advocate, I have found the “I don’t want to be a burden on my children” to be the most viable means by which to begin and/or entertain the long term care planning discussion. As a four-generation unpaid caregiver in my own family, I for one have a decided peace of mind knowing that the policy that I purchased some twenty-five years ago with a five percent compounding inflation rider has grown to more than one million dollars of benefits. While I love my children, I have no desire for them to be anything more than care managers for my wife and I and take comfort in the knowledge that we will be able to avail ourselves of professional caregivers that will allow us to remain in our home for as long as possible and in a facility of our choice should that become necessary.

Another reason more and more clients are seeking out long term care insurance protection is a greater awareness of the limitations inherent to both the Medicare and Medicaid programs, as more and more political candidates are now willing to approach these traditional “third rail” topics during their respective campaigns for elected office and openly discuss hypothetical changes to all entitlement programs previously viewed as untouchable. Long term care insurance is an additional arrow in our quiver that allows us to create options for our clients.

Long term care is an event. We do not know when it will occur, but only that the certainty of it occurring is growing greater and greater as we continue to age in place as a Society. Long term care insurance is an option with which to address this growing need. More than just a product, it is a flexible solution to the many issues that our clients are facing as they begin to plan for their own retirement.

I have had the opportunity to deliver only a couple of life insurance death benefit payments to the family of departed clients. Conversely, I have had more opportunities than I could desire to help long term care insurance clients initiate claims for benefits. The main difference is that with the life insurance policy, my client was no longer living; with long term care insurance, our clients are very much still alive. By making long term care planning part of annual reviews, new client intakes, and the conversation regarding estate planning, not only do we serve our clients but also potentially their children and grandchildren, who in turn will often desire to become your clients for this much needed niche product as well as the services regularly provided by your practice.

The Benefit Of Asking Questions

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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The Benefit Of Asking Questions

I may have mentioned that I love to talk to people in the pool when I am on holiday. It is especially interesting when they are from another country which may place them in a position to have different paradigms and societal norms than we do. Most recently we were in Costa Rica and spent a good amount of time talking to a bunch of folks who were on holiday from various parts of Canada. Not only were they more informed about American politics than people I encounter here in the United States on a daily basis, but they were very open about their own day-to-day lives, politics, and societal norms. This year we met a City Councilman, a retired Battalion Fire Chief, a Financial Advisor, and as luck would have it, an estate planning attorney.

It is always fun to deal with the typical question(s) of “what do you do for a living? Are you retired?” Depending on how the question is posed, I have even gone so far as to say that I am in the witness protection program to see if it gets a rise out of people. Nonetheless, it never ceases to amaze me how people will often qualify their own answers or form opinions about you based on how you answer that typical “opening” question. Sometimes I will be creative in my response and say something like, “I help people protect their futures against the unknown.” That always leads to a series of follow-up questions. When it finally comes out that I gave up the practice of law for a career in the long term care industry we are off to the races, because that requires some explanation, and will quite often lead to a series of questions like the following.

1) Why would you give up the practice of law to become an insurance salesman? Were you disbarred?
I practiced law in Chicago for 13 years before being drawn to the LTCI industry, where I have been for 25 years now. The main reason is that I have been an unpaid caregiver to four generations of my immediate family—all four grandparents, my wife on five different occasions, my adult daughter at the end of her life, and my newborn grandson who had a one percent chance of survival. Some refer to the LTCI industry as a calling, and I guess that would apply to me as well. P.S. I was not disbarred.

2) What are the traditional benefits of having a long term care insurance policy?
For most people, the purpose for purchasing this coverage is protection and peace of mind. The number one reason I have heard over the years is that they want to avoid being a burden on their family. We are not the Waltons any longer. More women in the workforce, fewer children in the family, often scattered across the country, and very few multi-generation family homes. According to AARP, the unpaid work provided by family caregivers is valued at an estimated $600 billion. The burden on unpaid caregivers is nearly crushing as it impacts their own health, finances, and career progressions. Other reasons cited for purchasing these products include the desire to avoid welfare, a desire for access to quality care, maintaining personal and financial independence, and not spending down their estate to qualify for Medicaid.

3) How does somebody purchase a long term care insurance policy? Who do they talk to about the options?
The conversation should start with their financial advisor, estate planning or elder law attorney, and then progress to a LTCI professional. Most insurance producers do not offer this form of insurance because it is viewed as complicated when it really is not. It is all about tailoring a plan that meets the needs, wants, and desires of the client. One size clearly does not fit all, and over the past twenty years in particular, clients have had a much broader range of choices brought to the table by the carriers.

4) What are the options clients can choose from in designing a policy that’s right for them?
Depending on finances, family situation, family history, geography, as well as other considerations, a qualified LTCI advocate can design a plan that meets their needs, wants, and desires. The most important question is where do they want to receive care? For the vast majority it is in the comfort of their own home. That is also the desire of the insurance company, because this care is far less expensive than a facility. Based on all these factors, a plan can be tailored in terms of a daily or monthly benefit, the length of the plan (based largely on family history—i.e. if there is a history of stroke or Alzheimer’s that could lead to a prolonged stay in care, a longer plan is preferable). Whereas in the past the carriers only collected family history anecdotally, now it is a critical element of the underwriting process especially in terms of cognitive impairment. The daily benefit and length of the plan (the benefit multiplier), usually expressed in two, three, four, five years increments create a lifetime pool of benefits. Other features could include a joint plan for a couple in which benefits are shared, inflation protection to guard against the rising costs of care during the intervening years between purchase and the triggering of benefits, as well as other riders that reduce the elimination period or allow for return of premium and non-forfeiture.

5) What are the different types of policies that are currently available to consumers that weren’t available in the past?
At the inception of the LTCI industry fifty years ago this year, choice was limited. These plans were basically “nursing home” plans and designed for catastrophic illness among the elderly. Now, they include home health care, assisted living facilities, adult day care, group homes, etc. Even though there is a 70 percent probability that a policyholder will utilize the plan, and for couples this rises to 90 percent, there are still those who honestly believe that they will avoid the need for this care, and as a result do not want to pay premiums for something they do not believe they will use. For these people, other products such as a life insurance policy or annuity with a LTC rider is ideal. Nobody I have ever spoken with has argued that they will never die. For those who think they can “self-insure” this risk, an asset-based product allows clients to build in a stop-loss because these products will return additional long term care benefits after their original deposit into these plans is consumed. We refer to all these non-traditional products with the mantra of Live, Die or Quit. If they require care, the long term care benefits pay; if they die, there is a death benefit; and if they change their mind down the road, they can receive a return of their money—quit. Keep in mind that all these protective plans are not only for seniors. We have clients who have gone into permanent care in their teens, twenties, forties, because of accident or chronic illness.

6) What are the health and age limitations for somebody to qualify for a long term care insurance policy?
Very soon after joining the industry I discovered that there were a great many people who were wisely seeking this coverage but were denied because of an underlying health condition. It led me to adopt the paradigm that one pays for this coverage with their money, but they purchase it with their health. As a result, the highest cost of waiting is often the loss of eligibility. Back in the day, coverage began as young as 18 and as old as 84. For most carriers, this window has shrunk to 40-79. The older one is at the time of application the less likely that the carrier will extend an offer of coverage because of a health concern, and the cost goes up with attained age as well. For these reasons, as well as the fact that a long term care insurance policy is a valuable and important part of everyone’s financial plan, it is always best to apply earlier rather than later.

7) What’s all the fuss about the state partnership programs and how they impact Medicaid programs?
Partnership is probably the best thing to have happened to our industry and, more importantly, to the general population. Medicaid is federally and state funded, but state administered. It is the number one line-item on every state budget and is the number one payor of long term care in the entire country. It is a huge drain on the budget, and often creates a budget deficit. After a trial run involving four states, and a further series of laws implemented by Congress going back to the 1990s, the Deficit Reduction Act of 2005, allowed all states to create their own State Partnership program. In a nutshell, a partnership plan is tax-qualified, which means that the premiums being paid each year are tax-deductible on the federal 1040 and/or a credit is given on the state return. These plans are really a partnership between the policyholder, the state and federal governments, and the insurance carrier. Essentially, for every dollar of benefit paid out by the carrier, the policyholder can shelter a dollar of their estate while still eventually qualifying for Medicaid in the event that they exhaust their plan and still require additional care. I always characterize a partnership plan as a reward to the policyholder for having the foresight to be proactive in creating a plan for themselves. The thing to remember is that Partnership plans are wonderful in sheltering assets, but applicants also must qualify for Medicaid based on income.

8) How can an attorney help their clients through the long term care insurance purchasing process?
An attorney need not be an expert on LTCI, but merely needs to understand that this is the number one cause of bankruptcy among seniors. Truly, an ounce of prevention is worth a pound of cure. Plans purchased when a client is younger can be far less expensive and should be considered as part of the overall financial estate plan. By being aware of the risks posed by LTC, the array of options available to mitigate these risks, and possessing a desire to assist the client in addressing this risk, this may constitute the single greatest service or “value-add“ that is provided to the client. There are attorneys who are licensed to provide this coverage, but most of them are content with referring their client to an in-house long term care planning specialist.

9) Talk about this real or perceived duty that professionals are now encountering.
Governments are correctly becoming more involved in protecting seniors against abuse, but also the general population by raising the standards of care exercised by financial and legal professionals. Under the Doctrine of Reliance, more and more professionals are being held responsible for the cost of a client’s uninsured long term care expenses if they did not make a discussion of these products part of their regular annual meeting agenda. Some would argue that this is grossly unfair to the professional, but the ever-increasing burden on Society in providing this care through the Medicaid program has warranted this higher standard. If a client is not willing to participate in a discussion regarding long term care, then it is wise to have them sign a waiver to this effect and to retain these waivers in the event children or heirs seek damages in years to come.

So, while we still make time to talk about important things like sports, religion, as well as raising children and grandchildren in this tumultuous world with our new friends, it is still my pleasure to talk about the long term care industry that has been so good to me and to my family.

“The important thing is not to stop questioning. Curiosity has its own reason for existing.”—Albert Einstein

An Ounce Of Prevention Is Worth A Pound Of Cure

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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An Ounce Of Prevention Is Worth A Pound Of Cure

As children, few of us envisioned careers in long term care insurance advocacy, financial advising, or law. Personally, I harbored dreams of being the President of the United States, an astronaut, a scientist, an Army soldier, and eventually an attorney. When I was a child, my heroes were the soldiers of World War II, Korea, and Vietnam. For my friends and me, our backyards, parks, and playgrounds became war zones in which we could be the heroes that vanquished evil. We also looked up to police officers and firefighters who made regular visits to our classrooms, allowing us to see them as allies and people we could readily seek out in times of need. Officer Friendly was more than just a catchy marketing phrase; it was how we viewed these important authority figures in our lives. Just as these figures provided a sense of safety, so too does the concept of preventive measures in various aspects of life.

Whether installing smoke detectors, visiting doctors for regular check-ups, or wearing seatbelts while driving, the principle remains consistent: “An ounce of prevention is worth a pound of cure.” We are reminded of this important principle from Benjamin Franklin with insurance commercials featuring a man who would call his agent after a car accident or a house fire. For him, it is too late. Being in the crisis mode greatly curtailed his options for any form of insurance protection.

“An ounce of prevention is worth a pound of cure,” remains one of Benjamin Franklin’s most famous sayings. The word ounce means something exceedingly small—just two one-hundredths of a kilogram to be exact. So, to clarify his expression, when dealing with a problem, spending a small amount of time and effort early on is a sound investment. It can save you more trouble in the end.

Historians say that when Franklin first used this expression, he was not talking about disease or other calamities but rather fire prevention. During a visit to Boston in 1733, Franklin was impressed with the city’s fire prevention methods, and he tried to bring some of these practices back to Philadelphia where he lived. Allegedly, Franklin sent an unsigned letter to his own newspaper, The Pennsylvania Gazette. Published on February 4, 1735, his letter “Protection of Towns from Fire,” began with the expression, “An ounce of prevention is worth a pound of cure.” Then he wrote about how a city should prepare itself for a fire.

From protecting yourself against sickness to preventing a house fire, this expression can be used in serious situations. The decision to purchase long term care insurance is a prime example of this principle in action. Delaying this crucial decision can have significant consequences, as eligibility for coverage diminishes with age.

While we pay for this important risk mitigator with our money—our wealth—we purchase it with our health! The single largest cost related to putting off the purchase of long term care insurance can often be our very eligibility. Sadly, most clients do not realize that the potential their application for coverage will be declined increases dramatically as they age.

We are now the Officers Friendly of the 21st Century. We can genuinely assist people in pre-crisis mode as they acquire their ounce of prevention: Planning for their long term care with a wide array of traditional, hybrid, asset-based, or annuity products. Failing that, we can enter their lives when they are in crisis mode and offer a Medicaid Compliant Annuity.

In today’s fast-paced world, where daily distractions and responsibilities come at us in record speed, we must remember another pearl of wisdom attributed to Benjamin Franklin: “Never leave that till tomorrow which you can do today.” This quote serves as a reminder of the importance of seizing opportunities and overcoming procrastination. At its core, Franklin’s words urge us to prioritize action and productivity and to avoid undesired consequences that may accompany these acts of procrastination. I cannot envision a more tragic consequence than facing the need for long term care without the benefits and peace of mind that a long term care insurance policy would provide, simply because they kicked the can down the road and never prioritized it.

A Flood Is Coming: It’s Time To Prepare

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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A Flood Is Coming: It’s Time To Prepare

I have a grandson who is both mildly autistic and a weather aficionado. As a result, I must wait for my daily call from him to hear about the weather where I am located, where he is located, and any unusual weather occurrences in the country or even across the world. “Cyclone bombs” and “atmospheric rivers” were foreign to me when I was a child, but they easily flowed off his tongue. As recently as February of this year, they were genuine terms to the residents of Los Angeles and the surrounding area as heavy storms pummeled the region with high amounts of rain that, in turn, caused mudslides and other disasters that toppled trees, crushed homes, washed away roads, and caused mountains to slide down with tons of mud and debris. Images of people being rescued from the tops of their cars and out of their homes, and of remote pieces of land that were newly created islands, dominated the news cycle as the weather changed the topography around them.

This severe weather also reminded me that life as we know it can change just as quickly. Our lives can be turned upside-down and inside-out with a change in our health or that of a loved one. I was shocked once again on Sunday when I went to church and observed one of our older members, now in a wheelchair, as his Parkinson’s disease has continued to advance. While he experienced a gradual decline, for others it can be as quick as flipping a switch. This reminded me of a story:

Once upon a time, a gentleman was sleeping soundly in his bed; in the middle of the night, he was awakened by a sharp knock on the door.

He opens the door downstairs and there stands his very agitated neighbor, who says, “Get dressed, and let’s get out of here. Haven’t you heard the weather report? The river is going to flow over the banks and this whole area will soon be flooded. We have to get out of here!”

And the fellow says back, “I’m not worried about any flood. I’ve lived here more than forty years and that river has never flooded. No reason for me to think it will now. I’m not leaving. I’m not worried. And besides,” he says, “I trust in the Lord.” He shuts the door, goes back upstairs, and returns to sleep.

A couple of hours later he is awakened by the sound of running water, and he goes over to his bedroom window and looks out; by golly, the river has flooded, and it is about as deep as his first story. He sees the sheriff coming toward him in a boat and the sheriff says, “Get in the boat and we’ll get you out of here. The river hasn’t crested yet and it will worsen. Get in here, and we’ll rescue you.”

But the guy says back, “Don’t worry about me. That ol’ river is not going to get any deeper than this. I’ve lived here forty years and am not about to abandon my property now. You go rescue someone else. I’m staying right here. And besides,” he says, “I trust in the Lord.”

Well, the next time we see him, he’s on the roof and clinging to the chimney and the waters are up around his knees. A National Guard helicopter flies by, hovers, and a soldier comes down on a long cable and says to him, “Here, put this vest on and we’ll lift you out of here! Hurry, the flood is getting worse.”

But the guy waves him off and says, “It couldn’t possibly get any worse than this. I’ll just take my chances right here. Besides,” he says, “I trust in the Lord.”

As you can probably guess, the next time we see him, he’s at the Pearly Gates and raising an awful fuss with Saint Peter. “I can’t understand it,” he says. “How can it be that I got swept away in that flood and drowned? Why didn’t you and the angels up here do something? Why didn’t you help me? I trusted in the Lord, but I drowned. Why didn’t you help me.”

And Saint Peter calmly replies to him, “My friend, I don’t understand why you are complaining. We did try to rescue you. We sent you your neighbor, the sheriff’s department, and the National Guard. What more did you want us to do?”

A flood is coming, and the name of the flood is long term care. There are 77 million Baby Boomers headed toward old age. Every person reading this article will be touched by the issue of long term care, either because you will need care or because you will help provide care for a loved one. As Roslyn Carter said, there are four kinds of people in this world: “Those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers.”

A flood is coming, and we are warning you to prepare for it.

It starts with the fact that we are each given a certain amount of time on this Earth, and then one of two things happens: We either die quickly or slowly.

I lost my dad in a matter of days. I didn’t even get to say goodbye to him in person because he died so quickly on a Friday morning out in Arizona. I had talked to him on Sunday before departing on a business trip to Chicago the next day. I had plane tickets to go out there the following Monday for a routine visit. Instead, I used the ticket to go out and bury him. It was that unexpected.

On the other hand, I watched all four of my grandparents die very slowly, some at home and some in nursing homes. For my grandmother who suffered from dementia it was a long goodbye, as she first lost her mind before her body finally wore out as well.

If you die quickly like my dad, it’s cheap. If you don’t die soon but instead go slowly or linger, it can be costly.

If you are unfamiliar with the cost of long term care in the United States, the national average is approximately $110,000 annually. The average stay in care is three years, which means we are looking at more than $300,000 in today’s dollars. And that’s if you are average! Some will linger much, much longer. I know one claimant who is only 32 years old and another who is the oldest at 103. The most extended current claim with the leader in long term care insurance has eclipsed 24 years and $1.6 million in benefits paid. Long term care can be costly. Fortunately, the insurance to guard against it is not.

Clients work with a financial advisor or estate planning attorney because they want them to protect and grow their money. There is no single more significant threat to their future financial health than the threat of long term care. The risk they face as a couple at age 65 is 90 percent that one will be in care, which means the other will provide this care. Unless this is why they have worked all their lives to accumulate wealth and have specifically earmarked this money for their long term care costs, we need to talk.

A flood is coming…

For some reading this article, I’m your neighbor. You’ve never thought about this before, and I’m here to tell you, a flood is coming.

For others, I’m the sheriff in the boat. You’ve been thinking about this but procrastinating, and I’m telling you it is time to act.

And for some of you, I’m the fellow at the end of the rope dangling from the helicopter. I am your last, best hope, because your health is going to change in the next six months and then the issue will be decided for you.

Long term care is a complex topic; one size does not fit all. I also find that most clients probably already have a host of questions pertaining to their situation. A long term care plan can be tailored to them as individuals or couples. Although long term care insurance isn’t suitable for everyone, everyone needs a plan. Let us help you determine the proper plan for you and your clients.

When I’m Sixty-Four

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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When I’m Sixty-Four

There is not a baby boomer who cannot readily identify the origin of that phrase and have a greater appreciation for it as they continue their march to this milestone age.

Paul McCartney wrote the melody for that now old tune around the age of fourteen back in the Spring of 1956. It was released in 1967 on the Beatles’ Sgt. Pepper’s Lonely Hearts Club Band album, when he was a mere lad of twenty-five, and yours truly was an even younger nine years old. Sixty-four seemed like eons into the future for both of us, because it was.

As the years passed, I passed the key markers along the path, quietly turning thirty, with an accompanying birthday party that featured baby bottles and pampers; forty, when I had completed twenty years of military service, and several of my friends and I had to embrace the realization that we had somehow gone from the young shavetail second lieutenants to being the very “old farts”—the colonels that we had made fun of during physical training. Fifty brought membership into AARP, more frequent prostate checks, and watching calories. Sixty brought on the dreaded colonoscopy, but sixty-four still was off in the distance.

As sixty-four approached, I still thought of it as just another milestone marker along the highway of life, and assumed that I would be just as strong, agile, thin, and have the same full head of hair. Well, sixty-four came and went last year, and while I still workout six days a week, mow the lawn and shovel the snow, I am not nearly as agile as evidenced by the less than graceful landing I achieve when jumping fences; there has definitely been some loss of muscle mass and strength, and the only thing thin about my body is the hair on the back of my head. Nonetheless, I liked sixty-four, and played the song regularly during that year, feeling very blessed to be enjoying a meds-free life, still capable of hiking and biking and keeping up with my grandchildren.

This past year, I had the dubious honor of trading my very cool, retired-military Tricare Prime health insurance for the famous red, white, and blue Medicare card, and Tricare for Life is now my secondary insurance. Thank goodness we will never have to worry about purchasing Medicare Supplements and companion Part D drug plans. Gratefully, the Open Enrollment season with the bombardment of calls from Med Supp salespeople, as well as the never-ending barrage of commercials featuring Joe Namath and William Devane is now over for another year.

Sixty-five is supposed to be the new Fifty, but I am beginning to seriously question that as I talk to my friends who are quietly entering retirement with an assortment of aches and pains, and a rash of doctors’ appointments for newly identified acute and chronic conditions that sometimes threaten to upend their retirement and vacation plans. I also noted that references to shoulder, knee, and hip replacements seemed to have a higher than usual presence in the annual Christmas letters and cards that we received this year. Fortunately, the advances in pharmacology and medical science have made these procedures relatively uneventful, as evidenced by the nine-hour hospital stay that my wife enjoyed this past Fall with her second hip replacement, as opposed to the 30-hour overnight stay that accompanied her first replacement nine years ago. The “warranty” on these replacement parts has also improved over the years, and recipients no longer must plan on a “replacement of the replacement” while still having fun with TSA as they pass through airport security.

In 1900, Teddy Roosevelt was president, and the life expectancy in the United States was only forty-seven years of age. In 1935, when his cousin Franklin Delano Roosevelt signed Social Security into existence, as a supplement to pensions and other retirement income enjoyed by citizens of our country, the life expectancy was up to sixty-three years and benefits would begin at age sixty-five. With sixteen workers for each beneficiary, the system was solvent and the future looked bright. Today, with life expectancy far exceeding that, and in the absence of pensions, and the ratio of workers to beneficiaries down to 2.5:1, there is much debate on the future of Social Security, Medicare, and the other “entitlement” programs.

Prior to COVID-19, the life expectancy in the United States had risen to 78.8. This was an average for both men and women, with women still maintaining an edge in longevity. Today, for those born in 2022 this life expectancy is 77.5 years according to the Centers for Disease Control and Prevention. Some states do have longer life expectancies, with Hawaii leading the way at 81.15, and Mississippi having the shortest at 74.91.

While countries like Japan are seeing their societies continue to age—since 2009 more adult diapers are sold per annum than their infant counterparts—the life expectancy in Japan is now 85.9 according to worldometers.info. In Switzerland, it is 84.4, and in France it is 83.3. The U.S. now enjoys the dubious distinction of being in 42nd place in terms of life expectancy among countries around the world.

What has caused life expectancy in the United States to lag behind other countries? Some experts attribute this to gaps in health insurance coverage or health care access, as well as deeper pockets of urban poverty, as well as an inequality between the “haves” and “have nots” which notoriously rears its ugly head in terms of medicine and health care. It is common knowledge that numbers do not always accurately portray the facts, and to this end, also influencing the “average” or median age in the U.S. is the fact that there is a great disparity in the life expectancies between Caucasian Americans (78.6), African Americans (72.9), Asian Americans (86.3), Hispanics (80.6), and Native Americans (77.4). There are counties in the US where the life expectancy of its residents is 86.3 years or as low as 66.81. The Boeing Study surveyed its own workforce and determined that those who retired at age 55 lived until age 83, while those who retired at age 65 only lived an additional 18 months!

While we still rank first in the world in terms of national net worth, because of the disparity in access to health care, and the above factors, life expectancy in the US is no less than six to seven years behind the world leaders. Further complicating this issue is the recent debate over vaccinations, and the ever-growing trend of deaths attributable to suicide, homicide, accidents, opioids, and fentanyl.

Fear not. There is still hope. I recently read a book recommended to me by my youngest daughter entitled Outlive written by Peter Attia, MD, a prominent longevity expert. In his book, Dr. Attia recounts how he discovered how unhealthy he was in his thirties despite being a marathon swimmer and avid biker. Under the premise that we need to adopt Medicine 3.0 and strive to live longer healthier lives by changing our paradigms about medicine and lifestyle, Dr. Attia methodically presents how we can do this and strive to live longer, healthier lives. He explains why your bloodwork and cholesterol results at your annual physical may be normal, but you might still be unhealthy–because “average” is different from “optimal.” He advocates prevention and early detection, exercise, and a more holistic approach to life. The goal is to feel the impact of acute and chronic conditions at a later age. The key to this is to eat better, sleep better, to remain active, focus on walking, retaining muscle mass, as well as exercising your mind, being mindful about our vision and hearing, as well as regular socialization. I am pleased to report that I had already adopted many of his suggestions prior to reading the book and can attest to observable positive changes in my own life.

Sadly, I have already outlived one of my adult children because of cancer. Nonetheless, I am still shooting for being around for the Tricentennial in 2076. I will be approaching my 118th birthday when it occurs. I hope to still be living on my own, and annoying multiple generations of my family with my own brand of Dad jokes.

Everyone Has A Story

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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Everyone Has A Story

In 2024, the long term care insurance industry will celebrate its golden anniversary. These fifty years have been chocked full of evolving product offerings ranging from initial nursing home only plans, to traditional, stand-alone products that offer coverage ranging from home care to assisted living facilities to skilled nursing facilities and every other form one can imagine. Hybrid and combination products that feature long term care riders attached to life insurance and annuity chassis, to asset-based products that allow policyholders to largely “self-insure” with a stop-loss measure attached.

Over the past twenty-five years, the long term care insurance industry has really come of age. The advent of new facilities being built by some of the largest names in the hotel industry, changes in tax laws, the addition of Partnership across nearly all fifty states, along with literally millions of years of policy data have allowed carriers to refine their offerings and to provide an even greater array of options for those seeking protection.

Ironically, it has been twenty-five years since I left the practice of law to pursue a career in the long term care insurance industry, so I have been around for half the duration of the industry. When I look back on my own experience, it astounds me how far we have come and, at the same time, how inertia still grips the vast majority of the country’s adults as they continue to mire themselves in denial.

My first clients were part of the Greatest Generation. They fought in World War II, came home, went to school on the GI Bill, raised a family (the Baby Boomer generation), often worked their entire career for the same company, retiring with a gold watch and a pension. If they had a family history of long term care, it was often unknown even to them until we asked open-ended questions that helped them discover this truth. Yes, Mom and/or Dad had come to live with them at the end of their lives, often occupying a bedroom formerly belonging to one of the children. I can remember often asking potential clients during the home interview if they can envision having to displace one of their grandchildren from their bedrooms.

Fast forward any number of years to the baby boomers. Unlike their parents, they do have the stories, far more readily as they quickly became the Sandwich Generation, often finding themselves taking care (physically, emotionally, financially) of aging parents while also supporting their children with college educations. Sadly, this often involves the necessity for second mortgages on their homes as well as a strain on them professionally, emotionally, and physically.

Often, an open-ended question as simple as, “Why did Grandpa (or Mom or Dad) have to move in with you?” would take them back in time to their youth, and we would begin the process of identifying need in their own lives.

As the years have passed, I have found it far easier to identify stories of family long term care among the baby boomers who have lived the “nightmare” up close and personal. One of the most poignant stories I have discovered took place about fifteen years ago. I asked my usual “Have you ever had a parent or grandparent live with you because they could not safely live on their own?” and heard the following story.

“My grandfather came to live with us while I was a freshman in high school. He came to live with us because my grandmother had died, and the family did not think it was safe for grandpa to live on his own. His memory was not what it used to be, and he would often leave the stove on, doors unlocked, or go out to the mailbox without any shoes on. At first, it was cool to have grandpa living with us. I would come home from school, drop off my books, have a snack, walk the dog, and then take my grandpa for a walk. On these walks he would tell me stories about flying in B-25 bombers over Germany in World War II. But as time went on, the walks got longer, Grandpa got slower, and after a while I knew the stories better than he did. By the time I was graduating I hated those walks, and was grateful that I had an after-school job so that I could avoid them.”

As I said, this was a very poignant story and even with the passing of time, I can still remember the visceral account as it was related to me by my client. Of course, the “hot spot” question that closed the sale for me was “how will you feel if, someday, a grandchild of yours has the same feelings about having to walk you around the block?” The look of resignation and then determination in his eyes told me that he was now a believer and would maintain his long term care insurance policy until he died. To date, despite a few rate increases, he has maintained the joint policy he purchased for he and his wife.

Satire is one of my favorite forms of comedy. Kevin Costner’s Robin Hood: Prince of Thieves became Mel Brooks’ Men in Tights. George Lucas’ Star Wars became, again, Mel Brooks’ Space Balls. All the true-life sad stories of grandparents moving in with their families gave rise to Robert DeNiro starring in 2020’s satire The War with Grandpa, which follows an interesting premise as to why DeNiro’s character is forced to move in with his daughter and her family.

After accidentally stealing from a grocery store due to having trouble with the self-checkouts and causing a scene with the store manager, recently widowed Ed Marino (DeNiro)) is visited by his daughter Sally Marino-Decker (Uma Thurman)) who wants him to move in with her family. Ed does not want to leave his house because he built it himself. Sally convinces Ed to move in with her and gives him her son Peter’s (Oakes Fegley) bedroom. Peter is not happy about giving his room to his grandfather and being moved to the attic. Ed is welcomed by Sally’s husband Arthur and two daughters Mia and Jenny. During his first day, Ed spends most of his time in his new room, sitting in his chair and looking at the sky while still thinking about his late wife.

Peter then tells his friends about his grandfather moving in with his family and living in his room. After a miserable first night in his new room in the attic, Peter decides to declare war. Ed agrees, so long as they follow the rules of engagement: They cannot damage other people’s belongings and cannot tell the family about their arrangement. Peter pulls a series of pranks, including replacing Ed’s shaving cream with quick-drying foam and damaging his record player. Ed gets back at Peter with pranks including removing all the screws from Peter’s furniture and rewriting his school report. Ed turns to his friends Danny (Cheech Marin) and Jerry (Christopher Walken) for some advice. Over time, Ed begins to spend time with his granddaughters and son-in-law and learns how to use modern technology, such as self-checkouts and apps which aids him in his own war-like efforts towards his increasingly aggressive grandson.

After an ever-escalating war of pranks on one another (nearly resembling the antics of Home Alone), there is the inevitable climax when the entire family is involved, all is revealed, and an armistice is forced onto the combatants.

As time passes, Ed and Peter finally are getting along until Ed leaves one day to be with Diane, with whom he is now in a relationship. Peter looks on angrily, declaring a war on both of them as they leave, leaving the door open for an unwanted sequel!

While this movie makes light of the ever-growing need for a three-generation family living under one roof, over the past twenty-five years I have encountered the resentment that often accompanies this necessary arrangement. So many times I have asked clients or prospective clients about these experiences and the difference having or not having had a policy made in their lives.

As previously noted, nearly everyone I encounter these days has a story of their own to share. Some of the stories are tinged with good memories and happy emotions, but increasingly I am hearing the opposite. Resentment, frustration, and sometimes even bitterness from the family members who “drew the short straw” or were the only ones willing to step up. Recently, with the advent of National Long Term Care Awareness Month, the staff at Krause Financial was encouraged to tell their own family story of long term care. We encourage you to view them on the Krause YouTube Channel.

The silver lining that accompanies the dark cloud of long term care is that today people have a wide range of choices on how and where to receive any necessary care. The key is to make sure that this care does not have a negative impact on the family financially, physically, mentally, or emotionally. It is about choice. But just like the person who fervently prays to win the lotto but fails to purchase a ticket, this peace of mind starts with having to purchase a policy. Encourage your clients to investigate this valuable coverage while they are younger and have the requisite health and wealth so that they can ensure that theirs is a story with a happy ending.

Auld Lang Syne: A New Years’ Resolution

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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Auld Lang Syne: A New Years’ Resolution

Happy New Year! It is now 2024, and it promises to be a tumultuous year in our country, as well as the world, as presidential politics, two international wars, criminal trials, inflation, rising costs, and the specter of long term care fill the headlines.

As 2023 came to an end, we lost some of our country’s most notable and influential non-elected leaders. Former Secretary of State and National Security Adviser Henry Kissinger passed away at the age of 100, still relatively healthy and presumably active. In May of 2023, he celebrated his 100th birthday and in interviews around his birthday, Kissinger said that many world leaders—including Chinese President Xi Jinping and Russian President Vladimir Putin—would most likely answer his call were he to telephone them unscheduled. Most recently, Dr. Kissinger focused his attention on the implications of artificial intelligence. He was a frequent guest with media and on panel discussions, writing, and traveling abroad. A remarkable life lived to the fullest until the end.

The same cannot be said for retired Supreme Court Associate Justice Sandra Day O’Connor who also passed away in December at age 93, suffering from advanced dementia.

Justice O’Connor broke the glass ceiling for a great many women. She was the first woman appointed to the Supreme Court of the United States, elevated to the Court by Ronald Reagan in 1981. Her early years were often referred to as the O’Connor Court because she cast the pivotal vote on several cases. This was only two years before I began my own law school experience, and the cases that we read during that time had long lasting impact for decades.

O’Connor was an amazing person in so many ways. She graduated from high school at age 16, went to Stanford University and was only 19 when she started law school as one of just five women in the class. Former chief justice William Rehnquist was a classmate and they briefly dated.

O’Connor graduated near the top of her class but was rejected for most law firm jobs. A Los Angeles-based firm offered a job as a legal secretary, but she declined and eventually found work in the San Mateo County, California, county attorney’s office where she initially began working for free.

What a lot of people do not know or remember is that Justice O’Connor left her lifetime appointment on the bench in 2006 after serving twenty-five years because of the health of her husband. In 2005, O’Connor’s husband was suffering from Alzheimer’s disease, and when the ailing Chief Justice William Rehnquist told her that he was putting off his retirement, O’Connor decided that, with her husband’s health declining, she could not wait and risk the possibility that the court would have two vacancies at once.

As it turned out, that’s what happened anyway. O’Connor announced her retirement, and the chief justice died weeks later. She stayed on for another six months while confirmation hearings proceeded, and in a cruel twist of fate, her husband’s health took such a precipitous downward turn that he had to be placed in a facility where he eventually died. We do not know if they had a long term care insurance policy, nor do we know the true havoc his illness caused financially or emotionally.

As we have observed on countless occasions, O’Connor’s retirement was the last step in a long balancing act between family and career. We often talk about the impact that the need for long term care in the home has on unpaid family caregivers. Aside from the physical, emotional, and mental toll, there is of course the professional impact. The caregivers often have to miss hours at work to accommodate doctors’ appointments for their loved ones, as well as other demands on their time. Quite often they lose out on promotions or may even suffer the indignity of losing their careers.

Sandra Day O’Connor gave up lifetime tenure on the Supreme Court—a job she loved and one with extraordinary power—to care for her husband of 52 years as he deteriorated from dementia.

That decision, in 2005, began a poignant final chapter of her extraordinary life. Her choice, at age 75, reflected her attempt to integrate the often-conflicting demands of professional achievement and family expectations in a country still adapting to changing gender roles and an aging population.

Justice O’Connor had hoped to care for her husband at their home in Arizona. But when that soon became untenable, she moved him to an assisted living facility. He was unhappy about the move, but then something remarkable happened: He found romance with another woman who was a patient there.

And Justice O’Connor, who not long before had been the most powerful woman in the country, was thrilled because he was content and comfortable again—even like “a teenager in love,” as their son Scott put it. The justice kept up her regular visits, beaming next to the happy couple as they held hands on a porch swing.

John O’Connor died in 2009, at age 79. In 2018, Justice O’Connor announced she was formally stepping back from public life because she, too, had dementia, most likely Alzheimer’s.

Then 88, she shared the news in an open letter to “friends and fellow Americans,” urging them to put “country and the common good above party and self-interest.” She wrote that she would continue living in Phoenix, where John had been, “surrounded by dear friends and family.”

“While the final chapter of my life with dementia may be trying, nothing has diminished my gratitude and deep appreciation for the countless blessings in my life,” she wrote. She hoped that she had inspired young people toward civic engagement, “and helped pave the pathway for women who may have faced obstacles pursuing their careers.”

Retired Supreme Court Justice Sandra Day O’Connor, the first woman to serve on the court, died of complications related to advanced dementia, probably Alzheimer’s, and a respiratory illness, the court announced. She was 93 years old. We can only imagine what her last years were like for her, her family, and those who cared for her.

We continue to live longer and age as a Society. It is nonsensical to believe that we are going to escape this world without needing some form of assistance. The COVID-19 pandemic drove up the cost of care like we have not seen in several years. The very idea that we can afford to self-fund this critical need is more nonsensical than ever before. It is incumbent upon all of us, regardless of the relationship we enjoy with our clients, to be educating and making them aware of this great risk we all face.

To this end, every January, we escape the cold and snow and head to my “happy place” in Cabo San Lucas. I go with the intention that I am going to work out daily, read voraciously while soaking up the rays, eat exceptionally well on a diet high in seafood, see some sights like the original Hotel California in Todos Santos, about an hour away, and talk to people in one of the two infinity pools about long term care insurance. What? Yes, I go on holiday fully prepared and mindful that I am going to advocate for the importance of long term care insurance. To this day my children take exception to this last point, but, when they were in the LTCI business with me they always welcomed the referrals generated–essentially policies waiting to be written—which I always returned from my holiday and shared with them.

How were these “sales” made in the pool or around the firepit after dinner? Very simply, I opened my mouth. When fellow vacationers would ask me the proverbial “What do you do for a living?” I remain very quick to say that I help people avoid disaster in the latter years of their lives. This always prompts the desired follow-up question of how I do this, and we talk about the growing need for long term care in our aging society. By asking about their own family experiences (which are becoming more and more frequent), it is becoming easier and easier to transition from identifying need to personalizing it and projecting their own potential future needs for these services, and to talk about the financial, physical, and emotional toll a lack of preparedness will have on their families.

Clearly, I am not afraid to talk about long term care insurance or Medicaid Compliant Annuities. Just as important, I have reached a point in my career where I am simply an advocate for these critically needed products. The industry has been very kind to me and my family, and I can honestly say that I do not care if these people ever purchase long term care insurance, but their failure to do so will not be because they did not hear about it from me. It has been very liberating to achieve this status, and to truly be able to dance like no one is watching. I have no fear or embarrassment or reticence in talking about what we do in an effort to help people protect themselves against this deadly age and health related tsunami that lurks offshore.

My New Year’s resolution for this year remains the same as it has been for any number of years now: To raise awareness and to educate people on this need in their lives, and to help them protect themselves while they have the requisite health and financial options available to them. I hope you will make this a resolution of your own. Whether you are an insurance professional, financial advisor, or attorney, we all share in this grave responsibility. P.S. The costs associated with these “marketing events’’ conducted in the pool are fully deductible according to the Internal Revenue Service.

Dear Santa, All I Want For Christmas Is…

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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Dear Santa, All I Want For Christmas Is…

Further evidence shows that the holidays are coming earlier and earlier and are no longer dependent on the calendar. It is not even Halloween, and yet the aisles in the retail stores are already packed with Christmas trees, decorations, and other yuletide offerings. Both my regular [snail] mailbox and email account are jam packed with holiday catalogs offering stupendous savings. The Sirius XM airwaves are replete with many channels that are offering only holiday tunes. I see more Amazon and FedEx delivery trucks in my [small] neighborhood than I do regular cars. Did I miss Thanksgiving somehow? It used to be that Halloween ended, Thanksgiving took over, and Black Friday was the beginning of the Christmas season. The decorations in my home that made my house seem as if I were living in a Hallmark store have long followed this schedule as well.

Like the retailers who are actively pursuing their fair share of the holiday dollars that will be spent by you and me, it is never too early for us to sit with our clients and advise them on the one critical issue that most have ignored in terms of their future financial security: What is their plan for long term care?

Under the guise of asking “What’s Your Plan?” we can address the eventuality of their needing long term care, not outliving their money, maintaining their independence, avoiding government assistance and welfare, ensuring that they have access to the quality of care they will surely desire, and ensuring that they do achieve their vision for their own golden years. This is the time that we can be the Ghost of Christmas Present.

The odds of needing this long term care increases each year as our society continues to age in place. The most recent statistics still reveal about a 70 percent probability for anyone over the age of 65 requiring an average of three years of care before they leave this life. For couples, this statistic rises to a very sobering 90 percent that one or both can expect to require this care. With annual costs continuing to soar into the low six-figures, it is a concern that needs to be factored into annual reviews with clients regardless of whether you are a practicing attorney, financial advisor/planner, or insurance professional. As we have written about on other occasions, the cost of not addressing this issue while the client has the requisite health and wealth with which to purchase this invaluable coverage can be devastating to both the client and their family, but also poses a tremendous liability risk to the professional who elects to avoid the topic.
The Ghost of Christmas Past may remind them of other family members who required long term care. I can remember many a holiday season distinctly colored by the need to provide care for a grandparent or other family member. Even under the best of conditions, talk about a buzz kill. As we continue to age as a society, it is becoming more and more common to interact with clients who have themselves encountered a long term care need in their own family. We may have to help them identify these instances and explore why Grandpa had to come and live with the family after Grandma’s death because he could not be left alone, or the level of care that Mom required as her health or cognitive state declined. Whether it was informal care by an unpaid (family) caregiver in the home, adult day care in a local facility, or the expensive care of an assisted living facility (ALF) or skilled nursing facility (SNF), it is often up to us to “connect the dots” and to illustrate that all these examples are the long term care of which we are speaking.

Keep in mind that insurance companies routinely record a large spike in claims in November and December because families do get together and can better assess situations with family members who may be experiencing some form of decline in their health. As a result it naturally follows that we will also have a rise in sales, which has been the case for many years now.

Encourage families to talk to one another at Thanksgiving and to actively explore what the plan is for Mom and Dad and their care—maintaining their own residence, living with the kids, relocating to a facility, etc. Many years ago, I had a client say to me, “There’s no more significant gift that we can give to our family than to make an informed decision on how we are going to address this issue.” Many of the carriers have wonderful materials on how to start a conversation with older members of the family who may be either in a state of denial or lack the information necessary to make an informed decision.

Tis the season for end of year tax planning. The holidays remain a very good time with which to meet with clients you may have missed out on meeting throughout the year. With complete candor and humility, any appointment set in the month of December is a “virtual write” waiting to happen. For many holiday seasons we tracked as an agency the number of appointments that did not result in a sale because they were so few and far between.

The clients you see are going to be buyers because:

You have educated them—by definition, ignorance is the lack of knowledge. Once you have educated your clients and provided them with the necessary information with which to make an informed decision, it is easy.

They are in the buying mode—for years we have said that the only thing that could make it easier for us as agents is if the company accepted plastic as a method of payment or if Santa was footing the bill! Some carriers will accept plastic, but almost all of them will accept an Electronic Funds Transfer (EFT) and the advent of electronic applications has made the business so much easier. Ho Ho Ho!

They have the time to think—they are not “scheduled out.” They have time to sit and meet with you, either in person or via the Internet, and to make the right choice.

They are more relaxed—the homes are warm and decorated, and it is a more relaxed environment. It is fun to be a part of their holiday season! I love it.

It’s the End of the Tax Year—their financial advisors may have recommended that they buy now to take an end of year tax deduction.

It can be a Gift!—it can be a “gift” from one spouse to the other, or to their kids. Or maybe the kids will buy themselves a present by footing the bill for parents who cannot afford it. For this reason, it may be prudent to meet with the family who is in town visiting! Meet those third-party decision makers or influencers head on and maybe sell them too!

When my own children were younger, the words that brought angst to me were often printed on the outside of the package: “Some assembly required.” With the gift of long term care insurance there is no assembly required, but we do have to battle denial and procrastination. Be prepared on how best to handle the very common objections that you will
encounter repeatedly.

Like the Ghost of Christmas Future, you can ask them about what their vision is for their golden years? For the end of their lives? How will they deal with that unexpected illness or injury that debilitates them? Who will take care of them? Where will the money come from? Is this what they wanted or envisioned?

Sometimes we get a warning when a change in health is approaching, but most times not. The time to prepare for any eventuality is before it happens. Do they have a will? Do they have life insurance? Do they have a plan for long term care? If not, the time to put one in place is now.

I have had many friends say to me that they wish they could win the lottery and walk away a millionaire. In fact, I have one friend who has been saying that to me for about thirty years now. Ironically, he has never purchased a ticket! I have pointed out to him that he could vastly increase his chances of achieving this dream by plunking down a dollar and buying a ticket! Likewise, Santa can’t bring you what you want until you write him the letter. Our largest challenge is often exposing the client to the salient facts and risks associated with long term care but, once we do, most will take the necessary steps to work with you to develop a plan that meets these eventualities.

People do not plan to fail, but they do nonetheless fail to plan. Our responsibility is to help them help themselves by using the information that only a skilled long term care insurance advocate can provide them to make an informed decision.

The bottom line to success during the holidays is the same as it is during the other 46 weeks of the year—activity. It all starts with the phone, and the ABC’s: Activity, Belief, and Congruence. If you are committed to activity, and are in congruence, and avoid the negative paradigms and beliefs about phoning and appointment setting, you can overcome holiday phoning and make Thanksgiving to New Years a veritable bonanza for yourselves and your families. So, ask yourself, “Do I believe?”

Happy Holidays!

Truth Or Consequences

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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Truth Or Consequences

We all know that you need three key ingredients to have a successful interview that leads to a client purchasing some form of long term care insurance to safeguard the future for themselves—trust, need, and urgency. I’d like to share a few comments on how to really make urgency come alive while discussing the inherent risks associated with long term care. Many agents struggle with how to keep this key module interactive, especially with the knowledge that the talk/listen ratio should be 2:1, with the client doing more of the talking. How is it possible to both educate the prospects yet at the same time keep them actively engaged? Simple; end every statement with a question mark.

So, let’s talk about a natural flow with the client through the risk module of the interview. First and foremost, you need to do a complete balance sheet, laying out all the client’s assets to include the home (net of debt), investments (breakout tax deferred such as 401k, Keogh as you can’t use IOS on them with younger clients), other properties such as cabins, vacation properties, and heirlooms to name a few. Why is it so important to secure all the prospect’s assets? So, you can appropriately do the takeaway with real numbers and not made-up hypothetical numbers when you ask them to prioritize the order in which they would potentially liquidate (sometimes at fire sale prices) these assets to meet the costs of long term care.

I generally like to start with this simple line of questioning regarding homeowners’ insurance which so many people take for granted. Everyone agrees that it is a “necessity to protect our single largest asset,” yet they put little or no thought into whether from a risk perspective it is necessary.

A discussion of risk requires the producer to set the stage by demonstrating the degree of risk associated with the various and sundry risks we all face on a day-to-day basis.

“Do you have homeowner’s insurance? How come? Have you ever needed your homeowner’s insurance for anything significant? Where would you be today if you hadn’t had your homeowner’s insurance? If five minutes before I got here today you opened a letter from your homeowners insurance company telling you, effective today, they were canceling your policy, how would that make you feel? Five minutes later I came knocking on the door to talk about LTCI coverage. What would you tell me? Would you say, ‘Something more important has come up…’ or perhaps ‘Do you sell homeowners insurance?’ How long would you take to make sure one of your largest assets is protected? How well would you sleep tonight if you weren’t able to secure coverage today? Would you light a fire in the fireplace, light candles around the house, fire up the barbie, invite a few friends over for a kegger? Don’t you find it ironic (use their words) that you wouldn’t go a second without homeowners’ insurance even though you’ve never really needed it?”

“What are the odds of you ever utilizing your homeowner’s insurance policy? How many people do you know have lost their home?” Most will say zero or one. This is because the odds of a carrier paying off on one of these policies is literally one in 1200. Pretty remote, and low risk to the carrier.

After discussing homeowners’ coverage, we move on to their cars. “Have you ever totaled a car? Anyone in your family? Do you know anyone that has had to replace a car that was a total loss?”

“Which coverage is more expensive for you—your car insurance or homeowners?” Unless they are in a high-risk area (New Orleans, Florida, etc.) the answer should be that their car insurance costs more. Why is car insurance more expensive than your basic homeowners? Risk. Risk to the insurance company. With five times the odds of paying out on a policy, they must charge more to mitigate their risk which is literally in the one in 240 odds range.

Health insurance companies charge more than their property and casualty peers because why? Because of the risk of paying out claims. The odds of one needing a major procedure, heart surgery, hip replacement, cancer treatment after age 65, is literally one in 15. For everyone else, it is rare that we do not see our doctors at least annually for wellness checkups or minor illnesses, aches and pains, and routine procedures. The risk to these carriers is tremendous and is reflected in the premiums that they collect from policyholders.

Why is permanent life insurance more expensive to purchase than term insurance? Risk. If a permanent insurance policy is in force at the time of death, the certainty of paying out the claim is 100 percent to the carrier. On term insurance, the risk to the carrier is less than two percent that a claim will be filed.

With those common insurances as a baseline, it is now the time to address the risk of long term care in their lives.

  • 42 percent of people under the age of 65 are in long term care.
  • 90 percent chance of the likelihood of one of a couple needing care.
  • 79 percent of women who are age 65 will need long term care.
  • Seven out of 10 people over 65 will require long term care.
  • Three years is the average number of years people use long term care benefits.
  • Eight to 10 years is the average life expectancy after an Alzheimer’s diagnosis.

Recent cost of care surveys published by several carriers place the (average, national) cost of assisted living facilities at $54,000 per annum, home health aides at $62,000, and skilled nursing facilities (semi-private room) at a staggering $108,000 per annum. Again, these are national averages and there are many areas of the country where these costs are significantly higher.

You’d be surprised how this line of questioning and tact really helps set up the client to have an emotional discussion regarding long term care protection. When talking about LTCI I like to share the statistics from the New England Journal of Medicine which cites that once you reach the age of 65, one in four Americans will spend one year in a nursing home. Perhaps more significantly, one in 10 Americans will spend five years in a nursing home. “Which assets, Mr. Smith, would you liquidate first to pay for your care? Don’t you find it ironic that you’ve covered all the risks that are not likely to happen, but the one that is most likely to occur, with the biggest costs, you’ve left unprotected?”

“Can you think of a bigger risk than the cost of long term care which can involuntarily wipe out your life savings, cause you to be a burden on your kids, lose your independence? Bigger than the risk of long term care? Do you see this as a real problem for you? Is this a problem you’d like to solve today? If I can show you a way to solve your long term care problem without compromising your lifestyle or depleting your life savings, wouldn’t you want to take action today to secure protection while your health still gives you a reasonable chance to do so?”

What to do if you are talking to Superman, who refuses to buy into the entire risk argument? It is at this point that you stop using the term risk and pivot to the term consequence. “Okay, Joe, I hear what you are saying. Your family history, as well as your current health, may very well allow you to fall into that ten percent that drops dead of a heart attack, gets hit by a car, or simply allows you to die without the need for long term care. But what if you are wrong? What are the consequences to your spouse, your children, and your financial legacy? How damaging would it be to the very people you have so diligently served as the breadwinner all these years if you suffered an accident or contracted some acute or chronic disease that required care, and depleted your assets?” I do not know why it took me so many years to have this epiphany, but once I discovered the word consequences, I found that I could overcome nearly any objection thrown at me by the client.

Finally, the questions that should spark the desired urgency: “If you needed care tomorrow…where would you want to receive your care? Who could care for you? Where would the money come from to pay for your care? How long could you afford to do this monthly?”

The long term care advocate’s role is to help the client understand the concept of long term care insurance and the options available in the industry. He or she assists the client with research, insurance companies and policies, and represents multiple carriers to offer coverage that best fits their individual needs.

As much as I’ve always preached the power of emotional need, I truly believe that a great risk module comes in a close second and keeping it fully interactive is crucial. By using powerful takeaways, we can help clients feel what it would be like to not have peace of mind having the insurance they absolutely take for granted. Failure to do a great risk module absolutely jeopardizes your ability to sell today. The failure to address consequences may jeopardize your clients’ future. Good selling to you all.

Assessing Risk: The Importance Of Discussing Long Term Care Insurance With Clients

Don Levin, JD, MPA, CLF, CSA, LTCP, CLTC
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Assessing Risk: The Importance Of Discussing Long Term Care Insurance With Clients

Most people are particularly bad at assessing risk. For instance, although there is great concern about getting attacked by a shark at the beach, the probability of being attacked and killed by a shark is just one in 3.75 million.1 Meanwhile, over 50 percent of individuals turning age 65 are expected to require long term care at some point.2 Why is it that some pay far more attention to the risk of a shark attack than that of requiring long term care?

When long term care is mentioned, many people immediately think of a nursing home. In reality, most requisite care takes place in the home. That’s why it’s crucial for clients to consider long term care as an event to plan for rather than a place. Not to mention, planning ahead for long term care gives clients more options for their future care and helps them avoid exhausting their life savings by paying the high monthly bill.

Paying for Long Term Care
Traditional long term care insurance became available in 1974. Additional amendments to the Social Security Act enforced compliance with certain standards for facilities to participate in Medicare and Medicaid, including staffing levels, staff qualifications, fire safety, and delivery of services. With these changes, several insurance companies launched private long term care insurance (LTCI), which gave individuals the opportunity to purchase an insurance product to mitigate the risk of either paying for these services themselves or becoming reliant upon the public welfare system.

Plus, in order to qualify for long term care assistance via Medicaid, an individual must spend down their assets to a state-specific limitation (typically $2,000). (For applicants who are married, the healthy spouse can retain a separate amount that varies by state but is no more than $148,620.) To prevent applicants from giving away assets to meet these resource allowances, Medicaid enforces a lookback period of 60 months. If an applicant or their spouse has disposed of assets by gift or by sale for less than fair market value during the lookback period, they can and will be penalized and determined ineligible for benefits.

In addition to the difficulty of meeting Medicaid’s strict qualifications, the ever-aging population in the U.S. and resulting long term care services required threatens to run our public welfare systems dry.

Despite nearly 50 years of long term care insurance sales and the high risk of requiring care, only 10 percent of the general population has LTCI.3 As a result, Medicaid remains the number one payer of long term care in the U.S.—currently sitting at 42.1 percent.4 While Medicaid is both federally and state funded, the program is regulated on the state level, meaning rules and requirements vary by state. What remains a constant is that Medicaid continues to be the largest line item in every state’s budget and is the primary reason that more and more states are on the brink of insolvency. As more Americans turn 65 and require financial assistance for long term care, relying fully on Medicaid to cover these costs threatens the overall collapse of the Medicaid system.

Qualifying for Long Term Care Insurance
With the advent of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the federal government standardized private insurance company offerings by mandating certain features and benefits for traditional long term care insurance plans. Features include tax-qualification, allowing policyholders to deduct the cost of the premium based on annual attained age ranges, and benefit qualification factors based on basic triggers such as requiring assistance with at least two activities of daily living (ADLs) or evidence of cognitive impairment. ADLs consist of transferring, bathing, dressing, toileting, eating. Organic cognitive impairment includes chronic conditions such as Alzheimer’s disease, dementia, Lewy Body Dementia (LBD), and Parkinson’s disease. Non-organic cognitive impairment may be caused by a traumatic brain injury (TBI) incurred during an accident or injury but may also include cases of depression and other behavior-related conditions that impair a person’s ability to safely care for themselves.

Like other forms of insurance, long term care insurance is designed to mitigate the risk of loss to the individual and their family. However, unlike other forms of insurance, LTCI is stringently underwritten based on an applicant’s current health and health history and is priced based on attained age. In other words, the older the applicant, the more premium they will pay. Additionally, the less healthy the client, the more likely they are to be declined LTCI coverage. For many years insurance carriers collected family health history for anecdotal purposes only, but now most utilize it when considering the insurability of an applicant. To this end, applicants aged 40 to 45 have about a 12.4 percent chance of being declined coverage, and that risk jumps to 47.2 percent for those aged 70 to 74.5 This is further evidence that LTCI is paid for with money as well as requisite health.

Since long term care insurance must be purchased when an individual is healthy, it can be challenging for some to determine whether they are a good candidate. In general, individuals who meet the following criteria have a higher likelihood of qualifying for LTCI: Have never been prescribed a handicap sticker; do not require help with any activities of daily living; have never been diagnosed with AIDS, HIV, or ARC disorders; have never been diagnosed with or presented symptoms of Alzheimer’s disease, dementia, memory loss, multiple sclerosis, muscular dystrophy, ALS, or Parkinson’s disease; and, are capable of walking four blocks or climbing two flights of stairs.

The process of applying for LTCI coverage begins with an interview conducted by an LTCI professional, who will ask the applicant questions regarding their personal health, finances, family health history, and what they want the policy to cover. The LTCI professional will then tailor a plan to fit the applicant’s specific situation. In some cases, the insurance carrier may request the applicant’s medical records, typically based on age or health concerns. With the submission of a completed application, the entire underwriting process usually lasts four to eight weeks often depending on the promptness with which doctors respond to requests for their patient’s medical records.

LTCI funds are typically available either on a reimbursement or indemnity basis after an individual qualifies for benefits. Again, basic triggers include a doctor’s diagnosis of cognitive impairment or certification that assistance is required with at least two activities of daily living for a period of at least ninety days.

Discussing LTCI with Clients
The most common reasons individuals purchase long term care insurance include a desire to avoid being a burden on their family and loved ones, the preservation of assets, access to quality medical care, the maintenance of independence and decision-making, avoiding welfare services, and, finally, peace of mind.

Some clients may push back against paying for something they may not utilize or evade purchasing LTCI coverage simply due to the sheer expense of a policy. As a result, carriers developed an alternative to traditional long term care insurance. These products, often labeled as hybrid, combination, asset-based, or linked benefit policies, are largely built on a life insurance policy or an annuity contract. Unlike a traditional long term care policy, an asset-based policy offers more than just long term care benefits. It also provides a death benefit typically equal to or more than the premiums paid. Therefore, the benefit is paid whether or not the policyholder needs long term care. Any amount of the death benefit not used for long term care while the policyholder is living is subsequently paid tax-free to beneficiaries. Adding even more flexibility, asset-based policies also offer liquidity which allows the policyholder to redeem their cash value at will. For all these reasons these plans present the policyholder ultimate flexibility when it comes to LTCI.

Despite a growing need for long term care, the decades of policy data from both government and insurance carrier sources, as well as personal experience with family members requiring care, there is still a level of resistance, akin to denial, to purchasing LTCI. In most cases, a primer on LTCI will impart the requisite knowledge necessary for the client to make an informed decision that will lead them to purchase LTCI protection. Whether it is to mitigate risk, institute a stop-loss if they elect some level of co-insurance, or protect their portfolio and financial legacy, the wide range of coverage that is available today allows each individual client to obtain a policy that is tailored to their specific needs, desires, and financial circumstances.

Estate planning and elder law attorneys are in a unique position to have this crucial conversation with their clients. A failure to do so may expose practitioners to a degree of liability if the client, or a loved one, can establish that they were reliant on them for advice regarding the preservation of their estate.

Conclusion
With the advent of new medical procedures and advancements in the pharmaceutical industry the population continues to live longer, prompting an ever-increasing need for expensive long term care services. Unless more of the general population elects to privately insure this risk, the Medicaid system will be under an unrelenting burden to cover these services. Fortunately, with the availability of both traditional and asset-based long term care insurance policies, individuals can tailor their LTCI plan to suit their specific situation.

Since many people fail to properly assess their risk of requiring long term care, it is imperative that attorneys discuss this risk with clients and guide them to fund a long term care insurance policy before it’s too late.

Reference:

  1. The International Shark Attack File 2022 Shark Attack Report, Florida Museum of Natural History.
  2. Projections of Risk of Needing Long-Term Care Services and Supports at Ages 65 and Older, U.S. Department of Health and Human Services, January 2021.
  3. Long-Term Care Perceptions & Preparation: A Middle-Income Market Study, Arctos Foundation and HCG Secure, January 2022.
  4. Who Pays for Long-Term Services and Supports?, CRS analysis of National Health Expenditure Account data obtained from the Centers for Medicare and Medicaid Services, Office of the Actuary, December 2021.
  5. American Association for Long-Term Care Insurance, LTC Insurance Applicant Denials, 2021.
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