7 Myths of Long Term Care Insurance

This podcast episode focuses on dispelling common myths around long-term care and providing facts to help people make informed decisions about planning for potential needs. Long-term care refers to ongoing assistance with daily living activities like bathing, dressing, eating, etc., whether at home, in residential facilities, or in nursing homes.

The host first explains that long-term care is an important but complicated issue, as people are living longer lives but costs for care in old age are also rising. To provide expertise, he introduces guest Ken Hurley, a veteran of the long-term care insurance industry with over 30 years of experience.

Ken first points out that as life expectancies increase, more Americans will require some type of long-term care services at home or in facilities. Annual costs often exceed $100,000, highlighting the need for planning.

He then systematically debunks some common myths about relying on government programs, self-funding, and misconceptions about long-term care insurance. For example, Medicare and Medicaid have strict eligibility rules and limitations that make it difficult to depend on them fully. Saving aggressively may also not be enough to cover 5+ years of long-term care.

Another myth is that only old people need extended care. Younger people like Michael J. Fox also need assistance. Statistics show that 70% of adults 65+ will need help with daily living activities at some point.

In terms of insurance, policies now provide more benefits for home care rather than just nursing homes. Premiums can be customized to fit different budgets as well. Funding options like annuities, 401ks, and spreading premiums out over time make coverage attainable for many middle-class retirees.

Ken emphasizes that spouses shouldn't assume they can necessarily care for each other, as one may pass away first or be unable to provide adequate care on their own. This can destroy families emotionally and financially if there is no plan in place.

In summary, he reiterates the importance of having an advanced long-term care plan, as ignoring this issue until a crisis hits can put retirement savings and quality of life at severe risk. Speaking with a financial advisor can help clarify myths versus facts.