November Is The Right Time To Have LTC Conversations

It’s November, which is a meaningful time for me for several reasons—it’s Long Term Care Awareness Month, National Alzheimer’s Disease Awareness Month and National Family Caregivers Month.

For those of us who have opportunities to help people plan for their futures, these designated months present great opportunities to start conversations about topics that can be difficult to talk about. By starting the conversation, we can help people protect themselves from devastating consequences of unexpected long term care expenses related to a long term disease.

For starters, all of us can encourage clients and those around us to talk with their loved ones about expectations for care as they age. The upcoming holiday season may provide good opportunities for those crucial conversations. Moving in with family members and/or relying on family members for care—these are options with significant impact on everyone involved and should be discussed as such.

As financial professionals, you’re also uniquely positioned to encourage your clients to review their retirement plans with a goal of protecting their retirement income against depletion from long term care expenses. You’ve helped them build a plan for retirement, so it’s in their interest and yours to ensure that plan factors in a potential need for long term care, possibly for many years.

One way to help them meet that goal is to consider a form of asset-based long term care protection. Unlike stand-alone LTCI, the assets still belong to the client. Premiums are guaranteed and, depending on the policy, can be paid over many years to let clients budget the expense of long term care protection in a way that fits their overall strategies. Should long term care benefits not be fully used, a death benefit passes to heirs.

Need for Care
Because of the asset-based long term care protection death benefit, it’s often attractive for people who like to think “it will never happen to me.” But if it does happen, and they become one of the millions who will be affected by Alzheimer’s, long term care needs are a certainty—often for many years. Asset-based long term care can help protect retirement plans from those expenses. Benefits of any asset-based long term care protection may be exhausted if years of care are needed, but some have benefits for life through a continuation of benefits rider. Some also offer joint protection, so two lives can be insured with one policy.

In these ways asset-based long term care can be structured to accommodate any eventual need for benefits, from none to many years. As a board member of my local Alzheimer’s Association chapter that’s one of the features I love to tell people about—because I know how real the need is.

In November, myself and many I work with will be wearing purple ribbon lapel pins for Alzheimer’s disease awareness. When people ask about my pin I’ll share some statistics: While almost 70 percent of Americans turning 65 today will have some need for long term care in their lifetimes, 20 percent will need care for longer than five years due to conditions such as Alzheimer’s disease and other dementias, as well as Parkinson’s disease and other chronic conditions.1

I’ll also share that one in 10 people age 65 and older has Alzheimer’s disease, and that the prevalence increases with age, so that 32 percent of people age 85 and older have Alzheimer’s.2 In the coming decades, Alzheimer’s disease is expected to become even more prevalent.

With these statistics in mind, The Harris Poll recently conducted a survey online of 2,006 adults age 18 and over on behalf of OneAmerica® to find out how American adults have prepared for their own possible need for long term care, particularly needs lasting longer than five years.

Nearly four in 10 Americans age 65 and over—37 percent—say they haven’t had conversations with anyone about preparing for their possible need of long term care. Only 17 percent of Americans age 65 and over say they’ve talked with a financial planner, and just six percent with an insurance agent about this need, which could mean a lot of financial professionals likely aren’t bringing up the subject and therefore aren’t doing all they can to protect their client’s retirement income from the potential need for long term care.

Strain on Caregivers
In the same Harris Poll/OneAmerica survey, 76 percent of Americans say if they had a chronic illness or debilitating disease, such as Alzheimer’s, Parkinson’s, ALS or diabetes, that required care for five years or longer, they’d prefer to live in their own home or in a family member’s home, receiving care either from a family member or hired caregiver.

If you have a client who’s in this majority, you might remind them that November is also National Family Caregivers Month, for good reason—while family members are often willing to take on this role, long term care events take a toll on caregivers that often goes unseen. As debilitating diseases like Alzheimer’s progress, so does the level of care needed. Many people who plan to rely on family members for care haven’t considered whether their loved one, who can make meals for them and drive them to appointments, can also move them in and out of bed or a wheelchair later on.

“Providing care for a loved one with Alzheimer’s or another dementia can be overwhelming,” says Natalie Sutton, Alzheimer’s Association Greater Indiana Chapter executive. “Disease-related costs can jeopardize a family’s financial security, and many caregivers have extremely high emotional stress which can negatively affect an individual’s health.”

If your client doesn’t want to talk about their own possible long term care needs, they may be more receptive to conversations about their loved ones who would be impacted. If they haven’t prepared financially for a long term care need, especially one that may last several years, their assets could be depleted and their caregiving family member may be left in a much different situation than they planned.

Helping clients understand the impact such an illness can have on their plan and their families is our obligation. Planning now can include steps like determining expectations of family members—perhaps a topic to be broached over the coming holiday season—and also protecting the assets and income that your clients have worked a lifetime to build.

References:
1. “How Much Care Will You Need?” U.S. Department of Health and Human Services, LongTermCare.gov. Accessed at
https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html on Sept. 26, 2018.
2. “2018 Alzheimer’s Disease Facts and Figures,” Alzheimer’s Association,
https://www.alz.org/media/Documents/facts-and-figures-2018-r.pdf.

This survey was conducted online within the United States by The Harris Poll on behalf of OneAmerica from September 13-17, 2018, among 2,006 U.S. adults ages 18 and older, among whom 417 are aged 65+. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact tammy.lieber@oneamerica.com.