Good, Better, Best

September 26, 2017

At my first meeting with someone I usually bring a spreadsheet showing three possible long term care insurance policy designs (three from an infinite number of possible plans).

Why do I do this?  Mostly to educate people as to what long term care insurance actually does, and to put to bed the notion that long term care insurance has to be expensive.  Our in-person discussion at the initial meeting allows me to illustrate the various policy design elements & their impact on policy cost.  By means of the pre-initial-meeting telephone interview, we have already established whether or not:

  1. Long term care insurance can solve this person’s (or family’s) needs.
  2. The person likely can qualify for long term care insurance and, if so, at what rate class.
  3. Long term care insurance is affordable in this situation.

Let’s now look at the three examples tailored to the individual’s particular age, gender,  probable rate class, needs, and resources.

Good: Least expensive of the three.  Typically a $3,000 per month maximum benefit, about a $108,000 total benefit pool, and no inflation protection.

Better: Typically a $4,500 per month maximum monthly benefit, about a $216,000 total benefit pool, and 3% annually compounded inflation protection (3% compound applies to both the maximum monthly benefit and the total benefit pool).

Best: Typically a $6,000 per month maximum monthly benefit, about a $360,000 total benefit pool, and 3% annually compounded inflation protection.  Of course “Best” can be made even better if it is appropriate to do so.

So knowing that the average cost for a Denver-area nursing home private room is about $8,500 per month, why do I show the Good plan with only a $3,000 monthly benefit?  First, if you wind up in a nursing home would you rather write a check for $5,500 per month ($8,500 – $3,000 = $5,500) or $8,500 per month?  The answer is obvious.  Second, most people needing long term care services are not in a nursing home.  At an average metro-Denver cost of about $22 per hour for a home care aide from an established agency, $3,000 per month benefit equates to 4.5 hours of home care per day, seven days per week.

A number of years ago, I was quoted in the Wall Street Journal as saying “Almost any long term care insurance is better than no long term care insurance.” (also discussed in the April, 2017 eNewsletter).  This is as true today as it was when I was first quoted.¹  Think about it: Would even $1,500 per month ($50 per day) help a family taking care of a loved one at home?  That is more than two hours of professional home care each and every day…or 4+ hours every other day.  What could Momma do with those two hours if she was not effectively handcuffed to Dad?  As a side note, when I did a presentation about long term care planning to a caregiver support group, I asked the following: “What did you have to give up when you became a caregiver?”  I will never forget the answer that boomed from the rear of the room.  A harried middle-aged woman shouted “Everything!”  Would two hours per day to do chores, have lunch with a friend, watch a movie, or just relax over a cup of tea have made a difference in her life?

Returning to Good, Better, and Best:  Many of the people I meet with chose the Better plan or some variation.  Some select the Good plan, some the Best plan, and some decide to do nothing (at best, all I have done for this last group is made them aware of the harsh reality of depending upon Medicaid for care).

One more question and then I will stop:  From where do I (Ray Smith) get the numbers for my Good, Better, Best spreadsheets?  I subscribe to an online service that let’s me dial in the prospective client’s demographic information for virtually every insurance company offering long term care insurance.  Then I season the cost data with company financial strength, extra policy benefits, and reputation for quickly paying claims.  From all this, I select the insurance company offering the best value for my particular client.  Sometimes it is the same insurance company for Good, Better, and Best.  Sometimes it is more than one company.


Note ¹: The Wall Street Journal, 9/24/2012.  I will gladly send you a copy of the reprint if you merely ask for it.


Disclaimer: Actual policy language, rather than the contents of this eNewsletter, always takes precedence.  Long term care insurance policies vary widely from insurance company to insurance company and within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor for these matters.

© Raymond Smith, The Long Term Care Specialist, 2017



Are You Healthy Enough To Get Long Term Care Insurance?

August 29, 2017

My job is helping you plan for the day you will need long term care services (assistance with getting through the day).  It is easier to plan when you don’t have major medical issues, but you do not need to be in perfect health to qualify.

Long term care insurance is the planning tool of choice because it is so good at protecting families.  People say that I often get long term care insurance approved for them…in spite of medical history problems.

What exactly does “Healthy Enough” mean?  If you are not healthy enough, can an insurance company turn you down?  Even with or without the existence of Obama Care?  Absolutely!  Obama Care (the Affordable Care Act), unlike for medical insurance, does not impact long term care insurance at all.  Insurance companies can & do decline (turn down) people for long term care insurance when their risk is thought to be too high.


Let’s start with a few examples from a typical long term care insurance company height/weight chart.  The following applies to both women & men: If you are 5′ 0″ tall & weigh between 92-205 lbs…Good!  You are 5′ 6″ tall & weigh between 118-263 lbs…Good!  You are 6′ 0″ tall & weigh between 133-295 lbs…Good again!  At the high end, these are pretty generous allowances compared to those for life insurance.

What source does an insurance company use for determining your height & weight?  Answer: They use whatever is in your medical records from your most recent doctor’s office visit…sometimes further verified by an abbreviated exam.

On the flip side (meaning you cannot get long term care insurance if you have these conditions) a few “knock-outs” are: AIDS, Alzheimer’s disease, arthritis requiring narcotic pain medication, back pain that is disabling or requires narcotic pain medication (see a pattern here?), dementia, organ transplant, Medicaid recipient (receiving heath care through Medicare, the government health insurance for people age 65 & better, is OK), oxygen use, Parkinson’s disease, physical or occupational therapy within the past 3 months, pregnancy, surgery (requiring general anesthesia) that is planned or has been scheduled, use of a walker or wheelchair.

What about a history of cancer?  Answer: It depends.  Breast Cancer: Stages I-III, no metastasis, at least two years since last treatment.  Not a long term care insurance problem.  Basal Cell or Squamous Cell Skin Cancer: Not a long term care insurance problem.  Prostate Cancer: Stages I-III, no metastasis, at least two years since last treatment, and PSA zero or near-zero.  Not a long term care insurance problem.

Any cancers that have metastasized (spread), or recurred: Problem.

Diabetes Type II: Present for less than 20 years, well-controlled & stable with diet & exercise & oral medications, no injected insulin, no diabetic complications, & tobacco free for at least 12 months: Not a long term care insurance problem. Insulin less than 50 units per day, everything else is good: May be able to obtain long term care insurance…everything else really has to be good.

Women taking hormone replacement therapy medications: Not a long term care insurance problem.

Tobacco use within two years: Assuming everything else to be good, you will not have a problem obtaining long term care insurance.  However, you will not qualify for the very best rate class if you are a smoker.

THANK YOU FOR READING TO THE END. None of the above medical conditions apply to your ability to keep long term care insurance after it is effective.  Once you have been through the underwriting process & a policy has been issued & accepted by you, it is yours for as long as you like…provided you pay the premiums when due & have been truthful on the application.

AND MOST IMPORTANT: If you are younger than age 80, fall within the height & weight tables, & have no significant health issues, THEN I CAN FIND: GOOD, AFFORDABLE, LONG TERM CARE INSURANCE, FROM A GOOD COMPANY for you.

ONE OTHER THING: Please do not hurt yourself by assuming that you cannot qualify. Talk to me first.  Insurance is not the only tool I have available for long term care planning.

My intent in writing this article was not to scare you into thinking you had no options. Rather it was to point out that all of us are but one doctor’s visit away from becoming unable to purchase insurance at any price. Each of us will cross that uninsurable threshold at some point in our lives.  Do your planning before it happens.


Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence.  Long term care insurance policies & underwriting requirements vary widely from company to company & within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your attorney or tax advisor for these matters.

© Raymond Smith, The Long Term Care Specialist, 2017






The Diagnosis

June 27, 2017
In April of this year, my wife & I had an appointment with a neurologist. The complaint was occasional minor tremors. Nothing significant, but we wanted to have it checked out.
Imagine my shock when after completing his evaluation, the doctor said “You have Parkinson’s Disease.”.
I flashed back to (and talked about) my late sister-in-law who 20 years ago, suffered from Parkinson’s. Toward the end, she was wheel-chair bound and could not speak (but did communicate by squeezing my hand whenever we saw her). The doctor quickly corrected me with “Don’t let your memory of a person who had Parkinson’s 20 years ago color your expectations for today. There have been major treatment advances since then, including many new drugs that did not then exist.”.  And he said, “There is a tremendous amount of research being conducted that I know will someday lead to a cure.”.
Since that day in April, we have together gone to a multi-hour Parkinson’s overview presentation at University Hospital, participated in several webinars, heard an excellent talk about the importance of exercise, and spent hours online looking at the fantastic Michael J. Fox Parkinson’s Foundation website. We both continue our twice-weekly personal trainer workouts, and together walk a mile and a half every day, rain or shine. On top of all this we have had a tremendous outpouring of support from friends, family, our rabbis, and my wonderful clients.
I think I have come to grips with the diagnosis. Mostly, I buy into: “If you have to have an illness, Parkinson’s isn’t all that bad.”   “It is an inconvenience, not something that is life-threatening.” “There are no travel restrictions (and we do enjoy travel)…you just become tired more easily.”
The one thing that I have not been able to accept is that it is my wife who has the disease. How I wish it had been me instead. Would have been easier for me to deal with.
Still, both of us have more than our fair share of things to be thankful for:
1. We have had 50 wonderful years of marriage together and, God willing, many more to come.
2. We have two grown children who make us more proud to be their parents each day.  A daughter who is a teacher of children…imagine that!  She teaches 5th graders how to lead happy, productive, successful lives.   A son who works tirelessly to save our planet and to improve social justice for all (We agree on many things, but not everything.) while he defends the Earth.  Did I mention that last week, he presented his documentary film to rave reviews in a sold-out Denver movie theater? Well he did!
3. My wife & I have both made it into our seventies with no illnesses until now. Wow! It could have been something much worse…and it wasn’t!
4. While not wealthy, we are OK financially. No complaints.
5. I enjoy helping my clients.  My “work” is not really work…I’m having too much fun to call it that.
6. The two of us are far more than OK relationship-wise.  The relationship between my wife and myself, while always strong, has become so much stronger.  We often laugh aloud about our good fortune in finding each other. Or was it a blessing? We think the latter.
Those of you who are long-term readers of this eNewsletter know that I seldom share details of my personal life…and you never see anything about my wife (you have not yet read her name).  However, this diagnosis of Parkinson’s is too important to keep secret.
So what can you learn from this?   It can happen to anyone…at any time…no matter how healthy you think you are.  When a diagnosis does hit, you had better have your plan in place for providing long term care services.  My wife is now uninsurable.  Fortunately, we each have good coverage that was purchased years ago…when we were both healthy enough to buy it.  When my wife’s symptoms inevitably progress to the point that we need professional care, our insurance will pay for that care…from the care provider who best meet my wife’s needs.
We will not become dependent upon our children, or upon Medicaid, the endangered government welfare program.
I do not wish to make my wife’s illness into a commercial.  So I will close with this: Contact me if you have questions about Parkinson’s or if you just want to talk.
© 2017 by Raymond Smith, The Long Term Care Specialist

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