Live Well In Retirement: The New Hybrid Life/Long-Term Care Insurance Policy

Click to watch a quick video summary of this newsletter.

Read on for the real-life story of Lisette and Mario and to learn about the next-gen insurance product (a Hybrid Life/Long-Term Care Policy) that can help protect your savings and your legacy.

Care Concierge NY Case Study: Lisette & Mario

Lisette is an 83-year-old, single woman with early Alzheimer’s, living on the Upper West Side of Manhattan with her beloved dog, Barney. She loves to walk Barney in Central Park and was an avid museum goer before becoming nervous about becoming confused and lost. She is bilingual, speaking both French and English.

She depends on income generated from her social security and investment accounts. She owns a long- term care insurance policy with a five-year, $380/day benefit, plus two permanent life insurance policies with cash value.

Mario, her 52-year old son, lives with his spouse on Long Island. They have two children attending college. He is a trial attorney and partner in a law firm, typically working 50 to 60 hours a week.

Six months ago, Mario contacted Care Concierge NY to evaluate his mom’s memory loss, ability to live independently, and cash flow. He had been taking off two afternoons a week from work to take Mom to physician’s appointments, organize her apartment, and pay her bills.

Lisette’s Goals & Concerns:

Remain at home with her beloved dog Barney.
Do not outlive her assets.
Leave an inheritance to her adult son Mario.

Mario’s Goals & Concerns:

Keep Mom safe at home. Hire a motivated, bilingual, live-in home aide with Alzheimer’s training who loves dogs, art, and cooks. Mario could no longer afford to miss work and lose trial income while managing Mom’s homecare.
Make sure Mom eats regular, nutritious meals. (She was sometimes forgetting to eat. She had also left the stove burning multiple times.)
Make sure Mom showers regularly and doesn’t fall while showering.
Make sure Mom doesn’t forget to walk and feed Barney, the dog. Make sure mom walks Barney with the caregiver, so Mom doesn’t wander.
Understand Mom’s assets, plus cash flow so her money will last.
Understand Mom’s long-term care policy benefits and correctly file a claim that will get approved.
Update Mom’s estate plan if necessary.

Care & Financial Management Solutions for Lisette:

Care Concierge NY matched bilingual, direct hire, live-in Home Aides to Lisette’s specific needs and hobbies. Lisette’s memory is sharper when they speak French, her native language. The weekday caregiver worked with Mario to declutter Lisette’s apartment and reduce the risk of Lisette falling. She also enrolled them in dog training classes at Petco. Most importantly, the caregivers keep Lisette safe at home and active with daily outings to Central Park, museums, and the market.
Care Concierge NY filed Lisette’s long-term care claim. The policy benefit funds the home aides’ salaries.
Per CCNY’s suggestions, Mario installed safety guards on Lisette’s stove, plus shower rails.
Lisette’s rising expenses were beginning to surpass her fixed income and eat into principal. She increased her monthly income by annuitizing the cash value from her smaller life insurance policy.

Your Early Financial Planning Solution to Retire Well

I constantly remind my clients that any bona fide retirement or estate plan must include long-term care and life insurance to avoid having later-life long-term care expenses wipe out their retirement savings (leaving the healthy spouse penniless) and any inheritance intended for children or grandchildren. Reminders are fine, but meaningless without solutions. I’ve authored this newsletter to educate you about:

A new, one-stop protection solution — You can now own one Hybrid Life/Long-Term Care Insurance Policy offering both a death benefit and long-term care coverage at a much lower price than purchasing separate life and long-term care policies.
The high probability that you will require expensive long-term care services.
How long-term care is a multi-generational issue because long-term care expenses can also wipe out your children’s savings.
A real-life case study (see the sidebar) in proper early financial planning and current homecare services.

70% of Us Will Require & Pay for Long-Term Care

I have a “soup to nuts” knowledge of insurance from theory to sales to claims to benefits. The statistics on long-term care insurance beg for proper advance protection planning.

The U.S. Department of Health states that almost 70% of Americans turning 65 today will require 2 to 3 years of long-term care services, primarily homecare.
In the NYC metro area, 3 years of 24/7 home aides provided by an agency can cost more than $700,000.
Genworth’s “Beyond Dollars Study 2018” reported that 62% of adult child and spousal family caregivers said they lost income as a result of caregiving. In 2015, AARP reported that family caregivers lose an average of $303,880 in wages and benefits while diverting employment hours to care for a loved one.
Most health insurers, including Medicare, do not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of long-term care services. You or your children will have to pay out of pocket for long-term care services that are not covered by private life/long-term care insurance or public assistance. Plan early!

Long-Term Care Insurance Can Now be Combined with Life Insurance: A Hybrid Protection Solution

The solution to successful long-term care planning is procuring one of the recently released permanent life insurance policies with a long-term care rider (also referred to as accelerated death benefit riders) while you are healthy enough to be underwritten. Yes you, the consumer, can now own one hybrid life insurance policy offering both a death benefit and long-term care coverage at a much lower price than purchasing separate life and long-term care policies.

The long-term care rider allows the insured the freedom and flexibility to use part of the death benefit tax-free to pay for qualified long-term care expenses while alive. And if you don’t need long- term care, you still have the full death benefit. In other words, owning a permanent life insurance policy with a long-term care rider is your ticket for living a long and fulfilling retirement (with quality care) while still preserving assets for your spouse or children.

Long-term care is a multi-generational issue because long-term care expenses can also wipe out your children’s savings. (See the statistics above.) Do you want your adult children to use their own savings to fund your long-term care expenses? How would you feel if your daughter was passed over for a job promotion because of time taken away from her job to care for you?

Again, the solution is early planning with proper insurance that will fund long-term care if you need it. (See below for a discussion on how to shop for a policy that provides benefits that are “policy owner friendly” or bang for the premium dollar.)

Okay, we’ve discussed hybrid insurance policies as part of early financial planning. But my clients and their adult children require a “go to” service to administer their long-term care needs- Care Concierge NY.

Care Concierge NY: Your One-Stop Destination for Multiple Long-Term Care Service

Care Concierge NY (CCNY) matches Elite, Background-Checked Home Aides to a client’s medical and social needs. The client hires the caregiver directly at typically a lower cost than hiring via an agency. We also provide Geriatric Care Managers (who will assess mom or dad’s ability to independently perform activities of daily living and create a plan of care) and Budgeting & Cash Flow Management. In 2018, 30% of our clients hired us to file claims on a parent’s or spouse’s long-term care policy. Most used their policy benefits to pay the salaries of home aides matched to them by CCNY.

Come Visit Me

Major life insurers are finally rolling out hybrid insurance policies offering both a death benefit and long-term care coverage at a lower cost than owning separate life and long-term care policies. Imagine the peace of mind of knowing that you have a source of funds to age in place at home with quality caregivers (allowing your healthy spouse to still enjoy her retirement) and leave assets to your children?

Which insurance option is right for you? Is your current long-term policy worth owning? Does your mom or dad need home aides or an assessment of her or his care needs? Call or email me for an appointment at 631-938-6230 or Email Us.