Episode Transcript:
David Chandler: Hi everyone and welcome to part two of our episode of LIFE Conversations with Bill Comfort. We're talking about long-term care insurance. So glad to have Bill on the episode sharing his expertise with us. In our last episode, we were talking a lot about the history of long-term care insurance. What should people be looking at? Who qualifies for long-term care insurance and what is long-term care insurance? And so Bill, welcome back! We're excited to have you back again. And so this time we're going to dive in and talk about what are some of the specifics around long-term care insurance, the policy, the benefits, what is included in a long-term care insurance policy? What does it cover?
Bill Comfort: Thank you. Yeah, and let's start by kind of looking at this from a claims perspective. So, you know, families where a family member needs care and they have long-term care insurance. You know, we talked about starting a claim as soon as possible, you know, at least getting the benefit eligibility established, getting through that elimination or deductible period of time. Get that out of the way as soon as possible. And generally it's better to use insurance company money first rather than maybe saving it for later because you might not ever get to later.
David Chandler: Right. And that's one of the things too, that we were talking about, in my experience, I've had a lot of families that have said, "Well, what if things get worse? Should I wait until wait, or should I wait to get my policy activated until that time?" And I really liked that advice that you shared last time about, no, go ahead and get it activated. Now use the, use the insurance money rather than your own money, because then you may run out of that time, that opportunity to use the insurance.
Bill Comfort: Right, exactly. So when is that point? There's certainly personal decisions, financial planning decisions around hiring professional care, paying for care. How do you pay it, you know, out of your own funds or insurance or a combination of the two? But the first thing that happens or that has to happen with any long-term care insurance policy is you have to be what we call benefit eligible. And some people call these the benefit triggers. You might think of it as a definition of disability. How limited or how disabled or how impaired does somebody have to be? Really, probably better thought of is how much help does somebody have to really need before long-term care insurance can start?
And the good news is since 1977 in federal law and really most companies for probably four or five years before that, we've pretty much had, have had standardized definitions of when somebody becomes eligible to begin receiving benefits. And this is important because nothing else happens in the policy that that elimination deductible period that doesn't start running till your benefit eligible. Certainly no reimbursements can happen either.
And with long-term care insurance, it's an either or measure. So either you need supervision, somebody around, present in your life because of what's called a cognitive impairment. And we think of things as we age, like Alzheimer's dementia, but it could be a head injury, say from a car accident or a sporting accident as well. So
Some things there, there's some limitation regarding memory, awareness, judgment, particularly related to safety. So if you simply need somebody who is around to supervise you to make sure you're safe, getting through the day, that's one track. The other track, which is separate. So it's an either or is if you need physical help. So you have some physical limitations and I'm sure many people listening and watching have heard of activities of daily living or ADL's and long-term care insurance uses a list of six physical activities and the policies say most commonly say if you need help with at least two out of the six and this is really important to understand because
I like to say long-term care insurance, long-term care insurance benefits start way before most people imagine they do. It starts long before you're flat on your back unable to do anything. Supervision for cognitive or the help, the limitation with two of the physical activities only has to be on what's called a standby basis. Certainly if somebody has to physically lift you up out of a chair or physically hold on to you as you get in and out of the shower or physically another person has to help you, know, bathe, for example, that would qualify. That's what we call hands-on assistance. But most long-term care insurance, especially long-term care insurance that's been sold since 97, 98 and the policies that are being written today.
They say if somebody merely has to be present, standing by just in case, maybe because of, you know, balance or frailty or fall risk issues, bathing, dressing, transferring, for example, which are three, probably the most common of the six activities. So if you simply need standby help getting through the day, that triggers benefits. And that's determined by your own medical providers or records from a home care agency or care facility can help prove that. If it's the start of a claim, of course the insurance company has the right to send in their own nurse or their own assessor to confirm that you've met these criteria. But usually once somebody is at risk of falling, or they're not safe again because of a cognitive limitation, that's when the benefits start. They work, the policies work well that way. So if you're thinking about, "Is mom eligible?" And mom's pretty independent, can get through the day, but maybe she just needs a little help bathing, but she can do everything else? Well, she's not gonna be eligible for benefits yet, because you have to need help with two.
But what I think a lot of people miss is this idea of standby help. You know, are you worried? Has mom had falls? You know, and that brings in to play a lot of things, not just bathing or showering, but dressing, transferring in and out of chair or a bed, even navigating to and from and on and off the toilet, which is another one of the activities, can all be compromised, you know, by balance and fall risk. And that's when the insurance can kick in at that point.
David Chandler: How long does, and I'm sure it varies, but is there an average length of time that a policy lasts or a certain amount of coverage that is offered by a policy?
Bill Comfort: Yeah, that's a great question. And we have to be a little careful. Both, I think it impacts both, you know, when, like you mentioned, when families would start to use the benefits and how long they would last. I think it's generally always good to use the insurance first. Because even if you have a three year policy and you only use two years of benefits before someone passes away, you don't get the other year you didn't use. If you started it sooner, you're using more of the insurance company money sooner and saving your own money for later. but when people are looking to buy the coverage, there's a range of choices. You can buy a policy as short as one or two years of benefits or as long as five to eight years. There are still, this is a big misunderstanding. There are still two companies that will write an unlimited or what's called a lifetime benefit.
It's obviously much more expensive and the longer the benefit period you buy the more expensive the premium would be obviously In terms of how much you should buy there's a balance that that you have to strike between what somebody feels is meaningful coverage and What's affordable and that's going to be unique to each person that the balance of those two things.
A caution, I think, to be careful of is we hear all the time, the average length of care is two and a half years. Well, we got to parse it out a little more than that. The two and a half years typically on average for everybody kind of comes from nursing home data, which includes a lot of short-term rehab stays under Medicare. I think a better measure, and we have very credible data now, is how long are long-term care insurance policies actually paying. And it's different for men and women. One of the reasons the premiums for women are generally higher than men is there's not only a greater chance women will go on claim, but there's a greater chance women will need care longer. And so obviously the cost of the insurance is higher. So for men, we say two to three years of coverage is a good average of actually using the insurance for home care or assisted living or whatever care needs you might have. And for women, four to five years. So again, there are reasons to have longer coverage if you can afford the premium, but you know, we'd like to see, you know, men have probably at least three years and women may be four, if not five years of coverage. Again, if it's affordable, it in balance.
David Chandler: So coming along with that, staying on that subject, what tips do you have for listeners on when they should be looking at policies? Is it too late if somebody, if they have a loved one that's looking for benefits? Kind of both of those, there are two separate questions where if I'm looking for buying a long-term care insurance for myself or if I'm looking for my mom, can you kind of take us down both of those roads?
Bill Comfort: Yeah, I just, I had a call last week from an adult daughter and her mom's 82 and is in a nursing home and is waiting for her Medicaid benefits to start, but she wanted to buy some long-term care insurance kind of to cover the interim. Well, it's too late. I mean, once you need care, even in anticipating care or have a condition that is one that's obviously deteriorating or that very likely will. As soon as you're diagnosed with something like Parkinson's and MS and certainly Alzheimer's or cognitive impairments, once you have a diagnosis for that, you're not eligible anymore at any age. 79 is about the top age to buy kind of true long-term care insurance.
There's some annuities you can buy at older ages, which basically just help you stretch out your own money. It's not, you're not getting extra insurance. The problem is after, you know, 65 or late sixties, this insurance starts getting very, very expensive. And most of us have accumulated a lot of medical history that makes it harder and harder to qualify through the underwriting process to get the insurance. It's sort of an old insurance adage that says you pay your premium with money, but you buy the insurance with your health. So you have to buy this insurance before you need it. it seems like that would be obvious, but a lot of people think they can wait until it's kind of apparent that it's coming.
It's just, it's not the way it works. So the recommendation is by 50 or 55, you should be buying. You could certainly buy it younger. There are policies you can buy all the way down into your twenties. Most people until they're in their late forties, early fifties have other priorities. They're raising kids. So they need a lot of life insurance. Maybe they need disability insurance because they're still working and saving.
But by 50-55, that's when it's recommended that you really should be looking at this, if not buying it. If somebody's listening and they happen to be 62, it's not too late. You know, now is the time, kind of, in that example.
David Chandler: And can you talk to us about the benefits for family caregivers of having long-term care insurance, having a loved one that has long-term care insurance. Somebody is looking at purchasing this and they're thinking 20, 30, they're around that 50 to 55 age and they're thinking about their kids and they're thinking, gosh, at 85, I don't want my kids to be feeling this burden of I want to have a plan in place. So can you talk about some of those benefits for the people that are utilizing long-term care insurance?
Bill Comfort: Right. Yeah. And I mean, for people who are listening, if you have older family members who need care now, and if they have long-term care insurance, and hopefully it's working for you, for them, you see, you know, the value of it. And I like to say it's interesting. It's certainly a primary reason that people express for buying long-term care insurance. Those who are seeking it out or have already bought it.
That the number one reason that's often cited is to not be a burden on family. But it's interesting. You will be a burden on family. The question is, and you talked about the idea of a plan. What's your plan for care? Long-term care insurance isn't your plan. Long-term care insurance is just money that helps you pay for your plan, helps pay for a level of home care that you would really want. And here's the key, while mitigating, while reducing or changing the burden that loved ones have, whether it's a spouse or partner or adult kids. And this is what's often missed. A lot of people get tangled up in the dollars and cents. Well, know, 40 hours a week of home care could cost $6,000 a month, and how would we afford that? And how much does $6,000 a month of insurance cost?
What if it's a three- or a four-year benefit? What you really have to start with is if I need care, who, who first is on the hook? My spouse, my kids. And if I don't want them to be, or I don't want them to be a primary caregiver, I have to have a plan that relieves their responsibility. And it's interesting, David, I have clients tell me all the time, but Bill, I don't want to be a burden to my kids.
And my question back to them is what choice will they have unless you have a plan to protect them? So I think kind of big picture answer to your question is yes, long-term care insurance pays for your care, whether it's at home or assisted living or memory care or wherever, it pays for your care, but it protects those you love by making money available to pay for professional care. Your kids are still gonna be involved. They're your kids, you know? And a phrase or a concept that I like that just sort of ties this up is, and I'll put it in form of a question. Do you want your children, your family, do you want them to be caregivers or care managers?
David Chandler: That's such great advice. Yeah.
Bill Comfort: And that's what drives most people to looking to long-term care insurance as a part of their overall plan for care.
David Chandler: Right. Yeah. Wow. That, that was, that was a great answer. Well, Bill, so wrapping up, if you, if our listeners take one thing from our conversations, this episode, last episode, what is that one key takeaway they should have from this?
Bill Comfort: Yeah. And I'm going to give you two from two different perspectives. Related to claims, start if your loved one has long-term care insurance and you're not sure how to use it or how it works, get some professional advice from a long-term care insurance specialist or your financial planner and start the process sooner rather than later. And then my advice for people who are in their 40s, 50s, even early 60s. If you don't have long-term care insurance, now's the time to begin looking at it and understanding how it works and give yourself some time to really learn about it so you don't feel like you're rushed into any kind of a decision. But again, sooner is better to take action than later.
David Chandler: And Bill, you've brought such a wealth of knowledge. If our listeners want to look you up, if they're wanting that advice, can you share with us how they get in touch with you a little bit more about your company before we wrap up?
Bill Comfort: Sure. Yeah. Probably, probably the best way to reach out to me and get more information is my website, which is pretty simple. It's my last name, Comfort, just like it sounds, ComfortLTC.com. There's a lot of resources on there. In fact, there's a whole section on claims and the top three things to consider when it comes to claims. And then a lot of information about all the different types of long-term care insurance that are available today. So folks can go there and kind of do some self-education. It's really built that way. And of course, there's a contact page. know, jot down your name and phone number and email address, and we can make the conversation a little more personal then too.
David Chandler: Great. And for those of you listening, we will have a link in the notes to the podcast. So if you want to go in there and click on the link, we'll have that available so you can go straight to Bill's website. So Bill, this has been an amazing conversation. Thank you so much for coming and sharing your knowledge with us. I know I took a lot from our conversation. So thank you so much.
Bill Comfort: You're welcome, my pleasure.
David Chandler: Take care.
Bill Comfort’s guidance on maximizing long-term care insurance benefits underscores the importance of early planning and understanding policy options. His expert advice provides families and caregivers with the tools they need to secure quality care and peace of mind. Stay tuned to LIFE Conversations with Senior Helpers for more expert advice on senior care and caregiving strategies.
