ColumnistsLong-term Care

No LTC Plan? That’s Like Being Out In the Rain Without an Umbrella!

By Susan Suben

I receive calls every day from individuals who say they want to investigate long-term care (LTC) planning strategies but probably won’t do anything. That’s like saying I know it’s raining outside but I’m not going to take an umbrella.

We know we’re fortunate to celebrate a birthday every year. We know there‘s the probability that we could live a long life with a chronic illness. We might have heard that 70% of people over the age of 65 will need LTC. We hear about friends and family members being stricken with Alzheimer’s. We’ve seen friends and family members become caregivers. We’ve heard about the astronomical costs of nursing homes, assisted living facilities and home care. We’ve seen people we love lose their life savings and go on Medicaid because of a LTC illness.

You simply cannot ignore a very real risk. You have insurance on your car and home. You probably have or had life insurance to protect against the financial trauma of an early death or to leave a legacy. You have health insurance to pay for medical bills. Many of you might even have pet insurance.

Remember when Travelers Insurance company used a red umbrella as their logo? Think about how seeing that umbrella was meant to give you a sense of protection and peace of mind. LTC planning provides an umbrella for your family. It relieves the financial burden on your loved ones, takes care of the caregiver so that person can provide better care for a longer period of time, protects your savings, maintains your spouse/partner’s standard of living, and helps you stay home.

I’m going to give you a challenge for 2020. Find your LTC umbrella. This is how you start.

• Work with a knowledgeable professional. That person can be an insurance broker, attorney, accountant or financial planner. If they are a broker or financial planner, make sure they represent numerous companies. LTC planning is not one-size-fits-all.

• Learn about the different strategies. There are still standalone LTC insurance policies as well as life insurance policies known as hybrids that allow you to leverage your death benefit for LTC, life insurance policies with accelerated death benefits for LTC, and life insurance policies with chronic illness riders for those with more severe medical conditions. Initially, you do not need to know the details about each strategy. Instead, focus on the concept and how it will fulfill your financial and personal goals. Do you still need or want life insurance? Do you mind paying LTC insurance premiums for a policy you might not use? These are just two of the questions to ask yourself. Eliminate those strategies that will not work for you. This step will help you feel less overwhelmed and then you can learn the details of the strategy’s plan you select.

• You do not need a Cadillac policy. Gear your policy benefits toward home care and assisted living. Your intention is to offset the cost of LTC not cover all expenses. This will make the premium more affordable. Whether it is a LTC insurance policy or life insurance policy with LTC component, consider a monthly benefit of $4,500 to $6,000 for two or three years coverage with 3% compound inflation. Couples should consider including a shared care rider in a standalone LTC insurance policy. This rider allows the sharing of benefits should one spouse exhaust his/her benefits and still need care.

If most of your assets are in tax qualified funds be aware that once you are taking the IRS required minimum distribution, that asset is no longer available to Medicaid other than the income derived from it. This knowledge should help you feel safer but should not prevent you from purchasing a policy as part of a LTC plan. You will still need funds to care for yourself.

Also consider doing some legal planning. Maybe you should place your house in an irrevocable trust so that it is not susceptible to a Medicaid spend-down.

LTC planning is one aspect of sound retirement planning.

• Consider an employer policy. More companies have added LTC benefits to their employee offerings. Generally speaking, these plans tend not to be as robust but their premiums can be more affordable. Talk to your HR department.

There is a plan for everyone and every situation. Setup an appointment with an adviser you trust or get a referral from a friend. Start talking about your future.

The region is known for it’s constantly changing weather. Some days can bring clouds, rain or inches of snow. Other days can be sunny and bright. Our health can vary as we get older and be as unpredictable as the daily forecast. Be prepared. Have your umbrella handy.

Susan Suben, MS, CSA, is president of Long Term Care Associates, Inc. and Elder Care Planning. She is a consultant for Canandaigua National Bank & Trust Company. Susan can be reached at 800-422-2655 or by email at