“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.

How Bad Off Do You Have To Be…

March 29, 2017

…before receiving benefits from your long term care insurance policy?

Can you wake up one morning & simply decide that you want to exercise your long term care insurance policy rather than go to work?  No!  Will your policy cover medical treatment?  No again!  But the benefit triggers are easy to meet if you do need long term care services/help in getting through the day.  Only a few things are required:

Chronically Ill: You must be certified as being chronically ill.  This is merely verification by any (other than someone you are related to) licensed physician, registered nurse, or licensed clinical social worker stating that you cannot perform at least two of the six standard Activities of Daily living without assistance…and that the need for assistance is expected to last for at least 90 days.  The Activities of Daily Living specified in the federal law governing tax-qualified long term care insurance are: Bathing, Dressing, Eating, Toileting, Continence & Transferring.  Or you have been diagnosed as having a Severe Cognitive Impairment (think Alzheimer’s or other forms of dementia) and thus need substantial supervision.

Plan of Care: You must be receiving long term care services under a personalized, written, plan of care.  Examples of a Plan of Care: “Mary will receive Home Care three hours per day, four days per week to help with bathing, light housekeeping, dressing, & meal preparation.

Waiting Period: The Waiting Period, however defined, needs to be met.  Recently issued policies commonly have a 90 calendar day waiting period.  This means that the Waiting Period is satisfied 90 calendar days after you (a) have been certified as chronically ill and (b) have paid any money for qualified care (The Waiting Period does not begin to “run” until both (a) & (b) have happened.).  Older policies may define the Waiting Period as 90 actual days (“service days” definition) of receiving & paying for care (This is the case with my own policy.).  The Waiting Period number of days can vary from zero to a year or longer.  Generally, but not always, the Waiting Period needs to be satisfied only once during the life of a policy.  There are many variations & all policies are different.  Call me if you have a question about your policy’s Waiting Period…whether or not you purchased the policy through me.

By the way if specified in your particular policy (true for almost every policy I’ve helped people with), long term care services are covered in your home, in adult day care, in assisted living, and in a nursing home.

The message is: Receiving benefits from a long term care insurance policy is not difficult…provided you satisfy the benefit trigger requirements.

Note 1:  This article only applies to tax-qualified long term care insurance policies.  99+% of long term care insurance policies purchased today are “tax-qualified”.  Some older policies, purchased elsewhere, may be “non-tax qualified”.  The benefit triggers for non-tax qualified policies may be completely different.

Note 2:  The above is a simplified summary of tax-qualified long term care insurance benefit triggers.  Policies are contracts between the policy owner & the insurance company and, of course, actual policy language governs.  Ray Smith, The Long term Care Specialist, is neither an attorney nor an accountant.  He cannot & does not give legal or tax advice.  Please consult with a qualified attorney or accountant if advice is needed in these areas.


© Raymond Smith, The Long Term Care Specialist, 2017

Mom/Dad Need More Help? 5 Indicators

March 28, 2017
  1. The home is not as tidy as it once was: Things like the sink is full of dirty dishes…from several days ago.  Beds are no longer made.  Kitchen trash can is overflowing.
  2. Personal hygiene has deteriorated: Your loved one always bathed daily.  Now it is once per week…or longer.  Dad stopped shaving…& does not trim his new beard.  Mom was always dressed before 9:00am…now it doesn’t happen until late afternoon, if at all.
  3. Seldom leaves home (or has visitors): Has become socially isolated.  Family & long-time friends leave messages that are never answered.  Little human contact.  Note: Beware the “new best friend” who may be giving self-serving financial advice…AND isolating your loved one in order to maintain control.
  4. Stacks of unopened mail: Inside home or still in the mailbox.  Among the envelopes are overdue notices for bills that have not been paid.  Previously, bills had always been paid promptly.
  5. Near-empty cupboards or refrigerator: Not much food in the home.  What are they eating?

If pressed, you may hear semi-plausible excuses for the above such as: “Since I just retired, I don’t have to shave any more.”  Or: “Because people seldom come to see us anymore, I no longer have to keep our home spotless.”  The reality is that 1-5 above likely add up to depression, a common ailment in older people.  As someone who cares, there are two things you are now obligated to do:

First, encourage him/her/them to seek an evaluation.  Because you care.  Unless you are a physician (and I am not), you & I are not qualified to diagnose.  But we are do have a duty to do our best…while respecting their right to make their own decisions…to get needed medical care for the people we love.  Ahh, the burden of knowledge.  Now we know & must do something.  Second, it may be time for some help at home.  Someone from a licensed home care agency can assist with housekeeping, help Dad with bathing so is no longer afraid of falling on the wet floor, provide companionship and much more.  Yes, it will cost money.  But this is why you plan for long term care.

Because you care…


© Raymond Smith, The Long Term Care Specialist, 2017