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Mar 11

Denial is Not a River in Egypt

“Many people underestimate their likelihood of needing need long-term care (LTC) and how much that care will cost. People have a 50 percent chance of needing LTC at some point in life, and about 30 percent of people who do may need care for five years or more, according to a new study by LifePlans, Inc. on behalf of America’s Health Insurance Plans (AHIP).”

Notice that says a 50% chance of needing LTC, not being in a nursing home. Most people will never be in a nursing home. But if people want the comfort of home or a “country club” assisted living facility, they had better have some type of LTC insurance. The above quote is on p. 10 of the report in which I have put a great deal of faith since it started in 1991. This is the latest update and can be found by clicking here:

And yet the denial is so thick you can cut it with a knife!  I see people falling into two camps:

  1. It will never happen to me, plus my financial planner says I can self-insure. Hmmm, it happened to Superman and the President of the United States. And you’re special? Both of them needed 10 years of care. What would the cost of 10 years of care do to the best laid plans to not outlive your money? (If you don’t have a handle on what long-term care costs, you can review my recent article about LTC costs today.)

2. What if I buy long-term care insurance and I never need it? So you are telling me you hope you fall and become a quadriplegic or you hope you have a major stroke or you hope you develop Alzheimer’s….think about what you are saying. Why do you think long-term care insurance costs so much more than homeowners’ insurance? How many people do you know who have had their house burn to the ground? Now, how many people do you know who have needed help with bathing, dressing and just getting around?

Tell you what. I”d much rather pay the premium for LTC insurance and never need it.  That’s a little mistake. If I take a gamble and don’t buy it and winding up needing extended health care, perhaps for years, that’s a big mistake.  Huge mistake. And I’m not just talking about financial. The emotional toll on the family is horrendous.

The kindest thing we can do for our children is to have a plan that will pay comfortably for long-term care so they don’t have to be figuring out how to pay for it.  Of course, what really happens with so many families is that the ultra-responsible child won’t spend your money to hire help.  She (or he) will quit a job and become the caregiver at a tremendous cost to health and his or her own family needs. Is that what you really want?

Oh, but the really healthy people say they won’t need LTC? They eat right, run marathons and live at the gym.  I have news for you if you are in that camp.  The healthier you are, the longer you can live, which just means instead of having a massive heart attack or a major stroke, you are just going to wear out S-L-O-W-L-Y, and the healthier you are, the longer that can take!

So regardless of how many people (including your financial planner) tell you to self-insure, please don’t listen.  Please have a plan to pay for long-term care.  Most of us will need some kind of help at some point in our lives.

Think about the people who love you. Don’t live in DENIAL.

 

 

2 comments

  1. Carol

    Phyllis – I live near the Dave Ramsey headquarters: “Financial Peace” in Cool Springs, as it was called until about 18? months ago? Signage came down, now called “Ramsey Enterprises”

    – I can’t help but wonder if there was a big law suit against Dave Ramsey “Financial Peace” for causing such devastation of finances when folks found out at age 60 they/mom/dad had become uninsurable and Memory Care costs $9,000/month for the next 8 +/- years.

    Why else would you take down such a beautiful name/signage unless it was part of the demand of a law suit?

    1. Phyllis Shelton

      I don’t know anything about a lawsuit of that nature, but your point is well taken Carol. What used to be the premium and underwriting at age 60 is now true for age 50. Or by waiting, people can miss a 15% discount for preferred health. Thanks for the question.

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