Archive for April, 2017

Do I Own Long Term Care Insurance?

April 26, 2017

You can safely bet that I do.  In fact I own both a long term care policy & a short term care policy.

Long Term Care Policy: Issued in 2001.  A single policy covering both my wife & myself.  We each have a $270 per day benefit with an unlimited (lifetime) Benefit Period.  We also have 5% compound Inflation Protection (rarely available today & prohibitively expensive when it is).  The Elimination Period is 90 days for each of us.

Why do I have such robust coverage for each of us?  Well, I am an insurance broker specializing in long term care.  And I have been married to a wonderful woman for a very long time.  Even back in 2001, I understood the risk of expensive care that we were exposed to.  Today I am especially thankful that we purchased what we did.


Short Term Care Policy:  Issued in 2012.  My wife & I each have a separate short term policy.  $100 daily benefit, Benefit Period is 100 days.  No Inflation Protection.  20 day Elimination Period.  Why did I buy another policy? (actually one for each of us).  I wanted to have some coverage during most of the 90 days of the long term care insurance policy Elimination Period.  Believe it or not, I grew older from 2001-2012 & the consequent increased cost of the second policy required a compromise…as does all insurance.


If you read the first article in this month’s eNewsletter, you may be wondering why I have a “large” policy, but am saying that a “small” policy is good to have.  It is all a matter of affordability.  If a small policy is all that the budget can stand, then “Almost Any Long Term Care Policy Is Better Than No Policy”.  For many people, long term care insurance somewhere between the two examples is affordably appropriate.  Let me help you find that balance.  Note: Even more so, this also applies to people who are single.


“Almost Any Long Term Care Policy Is Better Than No Policy”

April 26, 2017

I have said this many times…including to a reporter who quoted me in the 9/24/2012 Wall Street Journal.  Can a policy that only pays few benefits really provide much help to a family?

Absolutely!  Let’s look at a policy that pays $100 per day, with a two-year Benefit Period.  This is a small policy.  Not much, is it?

Not so fast.  Now let’s look at what this “small” policy will do for a family struggling to provide long term care (caregiving) for “Dad”.  In Metro-Denver, $100 per day will pay for four hours per day, seven days per week, of professional care from a well-qualified home care agency.  There are many well-qualified home care agencies in Denver.  Call me if you would like a referral.

Without this small policy, Mom may as well be handcuffed to Dad.   She cannot leave the home for fear that Dad may need something while she is gone.

With the policy, our “voluntary” hands-on caregiver (usually Mom, an adult daughter or daughter-in-law) is now free for four hours every day of the week.  Free to do what?  Run errands, have lunch with friends, see a movie, get some fresh air, go shopping…almost anything that doesn’t require staying home with Dad 24/7.  This also means that heavy lifting tasks, such as helping Dad bathe, no longer need to be done by our stay-at-home caregiver.  These jobs can instead be handled by the agency-provided home care aide.

If instead of a maximum $100 per day, the benefit is actually $3,000 per month (there is a difference in flexibility), the resultant 120 hours or so per month of professional home care could be arranged so Mom could take classes, be employed part time, or even go out of town to visit the grandchildren.

The median Metro-Denver cost of a comfortable room in an assisted living facility is about $4,500 per month.  So how much good would be done by a policy paying only $3,000 per month?  You tell me.  Would you rather write a check each month for the difference of $1,500 or for $4,500?

Everyone has heard that long term care insurance is good to have but not affordable (because that is what pundits say).  To put the cost issue in perspective, how much would the premium be for our small policy?  For a couple, both age 60 & both in good health, & using one of my top-rated insurance companies, the combined cost (covering both people) would be $913 per year.  This would provide both the husband and the wife (or an unmarried couple) each with a $100 per day benefit, for  two years.  Yes, $913 per year is the sum of premiums for both people & each has their own benefit package.  Is less than $1,000 per year unaffordable?

If we change the $100 per day benefit to $3,000 per month, & the Benefit Period to 3 years (instead of 2 years), the combined cost for our couple only increases to $1,137 per year.

Why did I begin the title of this article with the word “Almost”?  Because the only time that a long term care insurance policy could be harmful would be if the policy was issued by an insurance company that tried to never pay claims.  That will not be the case if you work with me.

Please do contact me with your questions, observations, past experiences, or if you are ready to take action.  You do have a choice.  Why not work with someone, for this portion of your financial picture, who specializes in helping people plan for their long term care needs?



Raymond Smith, The Long Term Care Specialist, is neither an attorney nor a CPA & thus does not give legal or tax advice.  Please speak with an attorney or CPA if you need advice in those areas.