If there’s one thing we all understand about eggs and baskets, it’s never to put all of the former in only one of the latter. One stumble, and all those eggs are no more.
“Would you put all your stock holdings into only one company?” we are asked. “Of course not,” we reply!
“Would you bet more than you can afford to lose on the spin of a roulette wheel?” the questioner proceeds. “Do you take me for an idiot?” we answer.
He leans in, “So you don’t sound like the kind of person who would – in all of your retirement planning – count on neither you nor your loved one needing long term care?” “That would be silly, and I’m not that foolish,” we answer, and then realize that we may have fallen into exactly that trap.
Who among us has the audacity to think that we won’t need assistance if we live to a ripe old age? And it’s exactly that – needing assistance for more than 90 days with the activities of daily living – that’s part of the definition of long term care. It’s also one of the ways insureds become eligible for benefits. Surely we don’t think that we are immune from severe cognitive impairment (the rest of the definition and the other benefit trigger)?
Yet many of us prefer to maintain the artifice of invincibility. And sadder still, many of our financial and legal advisors gladly go along with our self-deception. Perhaps they find it easier than starting a meaningful long term care planning discussion. Or, perhaps we have made it clear that we are not open to the topic.
Another common practice is for advisors to automatically throw in what they describe as long term care (LTC) protection with other policies such as life insurance. This presumably sweetens the value of the life insurance policy and makes long term care planning more palatable. To be clear, I am not saying that asset-based policies never make sense, and I do recommend and sell these policies when they are the best option.
However many life/LTC combo policies have significant limitations on coverage and how they pay benefits when compared with traditional LTC insurance.
In my years of being a long term care insurance specialist, I’ve come to learn that proper long term care planning is never a matter of simply throwing a rider onto a life insurance policy that someone is purchasing. It’s too important a risk to be treated incidentally. It needs to be discussed, and all the best options to fund a future long term care need should presented and understood. That’s very important to avoid potentially catastrophic disappointments at claim time.
So, how does a retirement plan that will hold up for yourself and your family – even if you or a loved one needs long term care sound?
I am here to make that a reality for you. No broken eggs. Promise.