No Excuses – We all Need to Consider LTC Insurance

We have featured Brian Gilder in our blog before. And we will certainly be featuring him again, just as he was featured in this story on ABC news:

Brian Gilder is our leading rep and is part of our ISN Network Long Term Care team. His expertise in product, sales solutions and marketing is now available as a resource to all contracted ISN associates. Now is the time to get on board with ISN Network and look at the possibilities that LTC can add to your marketing for 2013.

10 Reasons People Don’t Buy LTC Insurance…and why they should reconsider

an ISN Network exclusive written by Brian Gilder, CFC, CLTC,CSA  and author of the book “Wealth Solutions Using Long Term Care: Why you should care about Long Term Care!”

As the threat of a catastrophic illness becomes more real to the growing baby boomer population, it is often a good idea to look at LTC insurance as an option. But in recent LIMRA studies, statistics show that the majority of baby boomers do not own coverage. There are many excuses and reasons given. In this exclusive ISN Network special report, let’s take a look at some of the common reasons people don’t buy long-term care policies, along with the facts that debunk these popular myths.

I’m too young.

Actually, slightly less than half of the people who need long-term care are under the age of 65. Younger people may require care after an accident or stroke, or because of a chronic illness such as multiple sclerosis. Perhaps the most famous example of this is the actor Christopher Reeve, who in his forties became a quadriplegic due to a freak horseback riding accident. Barring major advances in the care of spinal cord injuries, he will require long-term care for the rest of his life.

I’m too healthy.”

This excuse is a version of the “I’m too young” defense, and it presents a strange irony. The fact is that the healthier you are, the longer you will live . . . and the longer you live the more likely that you will need long-term care due to old age or frailty! If you didn’t take such good care of yourself, you would be more likely to have a health condition that could cause an early death. (But that’s not such a good option.)

The younger and healthier you are when you take out a long-term care policy, the lower your premiums will be. Individuals who wait run the risk of waiting too long and not being healthy enough to qualify.

I plan to self-fund any long-term care services I might need.”

While this may be possible for some it is not an option for most of us. As we’ve seen, costs may vary according to location, but the average cost of nursing home care is about $72,000 per year, or $200 per day. The cost to receive care at home is approximately $4,00 per month and rising.

Ask yourself: “How long can I afford to pay $72,000 a year out-of-pocket?”

And here’s one more question: Why would you want to?

My assets are protected in a living trust.”

A living trust is designed to avoid the lengthy probate period, but assets held in trust are counted by the government in determining your Medicaid eligibility. The more assets you have, the longer you would have to wait to become eligible for Medicaid, and you would have to deplete or transfer those resources before the government would pay. The only type of trust that will protect your assets from the cost of long-term care is an irrevocable trust. However, if assets have been transferred into an irrevocable trust within 60 months prior to applying for Medicaid, a period of ineligibility is triggered. During this time you would have to pay out-of-pocket for your long-term care needs.

My kids will take care of me.”

Many adults are willing to assume caregiver responsibilities for their aging parents. But doing so necessitates a radical shift in lifestyle and a financial drain. We’ve already mentioned the stresses experienced by the Sandwich Generation. Now, imagine what will happen as that generation of caregivers ages. A 50-year old woman taking care of her 70-year old mother will be 70 herself when her mother is 90. Is it feasible to ask a 70-year old to lift another person into bed? Even worse, what if that 70-year old daughter needs long-term care as well?

I don’t want to go into a nursing home.”

Some people avoid planning for their long-term care needs because they are afraid of ending up in a nursing home. This is a common concern related to the fear of losing one’s independence, and it is exacerbated by media images of inadequate facilities. There are two ways to approach this type of denial. First, the nursing home of the future is certain to be a nicer place to live than many people imagine, as groups like the AARP lobby for improved standards. The Baby Boomers have set the national agenda since the 1960s, and they are not going to be willing to put up with poor care facilities as they age.

Second, long-term care is not synonymous with nursing homes. In the majority of cases, people receive long-term care in a variety of other settings, including their own homes. Additionally, many people live in beautiful assisted living facilities where they have their own apartment and furniture and require minimal assistance.

My VA benefits will pay.”

The Veteran’s Administration statute allows but does not mandate that the VA provides nursing home coverage. Because of limited availability, the agency rations nursing home resources according to a list of priorities, at the top of which are veterans with service-connected disabilities. The occupancy rate for VA nursing home facilities is more than 90 percent so access can be difficult, and location may be a problem since some states have only one or two VA nursing homes. The only VA home care benefits are a hospital-based home care program that does not provide home health or personal care aides.

I’ve got disability insurance instead.

Disability insurance replaces a portion of your income but does not address the additional financial burden of long-term care services if you become disabled. Since these services can easily run higher than $6,000 per month, you need both types of insurance.

Medicare pays for long-term care. Right?”

Most people believe that Medicare will pay for their long-term care needs, and in fact Medicare does offer some short-term care assistance. However, this program only pays for skilled nursing care at 100 percent for 20 days after a three-day hospital stay. (The problem is that most nursing home stays are not for skilled care.) Medicare will partially pay for an additional 80 days but you must make a co-payment. After 100 days, all Medicare benefits stop.

I will apply for Medicaid.”

For low-income seniors Medicaid is a viable option, but to qualify for it you must be impoverished. For middle-class and wealthier Americans, this means you must spend down your assets before applying for coverage. And you can’t simply write a fat check to your children. There is a 36-month look back period when you apply for Medicaid. In other words, if you have given money away in the 36 months leading up to your applying for Medicaid you will become ineligible for benefits for a period of time equal to the amount of money you gave away. (We will discuss this in more depth in Chapter Seven.)

Also, there is a huge strain on the nation’s Medicaid budget already. This program is ill-equipped to meet the massive needs that will arise once the Baby Boom generation begins to require long-term care in large numbers. For those who can afford it private insurance is a way to defend their personal wealth–and ease the strain on our country’s finances.



Polls reveal that a majority of Americans understand that the costs of long-term care are a growing problem, but most people don’t know how big a problem they are. Depending on the type of care, current costs run between $20,000 per year for adult day care programs through more than $70,000 for a year’s stay in a nursing home. And these figures are averages; in some regions of the country the costs are much higher.

Worse is the fact that the price keeps rising. Current projections suggest that the average cost of nursing home care in the year 2030 could be as high as $190,000 per year. Unfortunately, many people misunderstand the role of private insurance in paying for long-term care services. Myths abound for a couple of reasons, including the relative youth of the long-term care insurance industry and the resistance most people feel about facing the possibility of needing care at some point in the future. By tackling these myths one at a time and presenting the facts, we believe that most people will see the importance of obtaining long-term care insurance.

About Jeffrey Berson

40 years in and around the industry has made Insurance a part of my DNA. I have had the pleasure of working with and for some of the greatest minds in our industry. My "Bersonal" View is an attempt to capture some of the best ideas, the best concepts and the best practices in a way that can lead to success for others. It will certainly be my point of view, so please...don't take it "Bersonal".
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1 Response to No Excuses – We all Need to Consider LTC Insurance

  1. ben f ward says:

    ltc…and as my wealthy friend who makes his money loaning money at 8-20%…it is just math. figure the cost of a ltc policy vs using your own assets…it is an easy decision…why would you blow a hole in your own assets when for as little as 1% of those assets you can have someone else pay the bills if you need the care. Simple, do the math. Ben

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