This is the Truth Network. Um Welcome to Finishing Well, brought to you by CardinalGuide.com with certified financial planner Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Well, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRAID, long-term care, life insurance, investments, and taxes.
Now, let's get started with Finishing Well. Welcome to Finishing Well with Certified Financial Planner Han Scheil.
So today's show takes on a new meaning for me that it never has before. It's traditional long-term care insurance. versus hybrid long-term care insurance. And the subject's very near and dear to my heart.
Some of you know, I was in a pretty horrific car accident here two weeks ago and. I was faced with some of these issues recently in my life, but You know, when I think of the idea of traditional long-term care insurances versus hybrid, I couldn't help but think. of the story of Naomi and Ruth. And how it was. that love The love that Ruth had for her mother-in-law and the love that Ruth.
I mean, they only had for Ruth Led to a provision for long-term care insurance. In other words, Ruth dearly loved her mother-in-law and was willing to take care of her for the rest of her life. I'm with you. Wherever you go, I'm going. That's what Ruth said.
However, Okay. May omi. It's wisdom. was to actually provide for the means for that long-term care insurance. And not only for herself.
But we today are still reaping the benefits of Naomi's decision to get that long-term care insurance for Ruth because she ended up marrying Boaz, and you may know was in the lineage of Jesus. And so, you know. to say that this love between these two Not only ended up in long-term care insurance for both. Naomi and Ruth. It certainly passed on to generation to generation until we ourselves are now experiencing that.
And so, this is so important. that generation to generation passes love. That again was expanded from Naomi to Ruth and Ruth to Naomi, Hans, right? Yeah. I mean, here we are in the modern times.
We buy an insurance policy.
So that our family doesn't need to quit their job. or try to do their job and come home at night and take care of you. Um And then they gotta get the brothers and sisters lined up. and have them all take part of their job off, or like we did with my mother. Um In the first one trying to talk her into changing her situation.
We flew to where she was and did our job from her kitchen table. for a week and then the next week and the next week and the next week. And we went through there's four of us living at the time. One deceased, and so that makes it easy: is one week a month, and we made it almost through the second cycle, and then my mother's doctor said. Mary, you can't continue this.
You need to move closer to your kids, blah, blah, blah, blah. But the same kind of thing just happened to you. Yeah, you know, so So today's show, we're making a comparison of traditional long-term care. and the hybrid life long-term care. insurance and we're making a real specific comparison.
So I would encourage you To go listen to the video that's on the website at CardinalGuide.com. or you can go on YouTube and find the show. Um And just watch it. No. You're going to be short on details today because we're going to use up all the time.
telling stories here and Robbie's going to tell you his own story. And I really was kind of want to just go, Robbie.
Okay.
Well, as I said that, you know, two weeks ago. My wife and I were in a fairly horrific auto accident that caused me to have both. Um You know, a broken back and struggles with some of the vertebrae in my neck. Concussion, as well as my wife had a concussion and injuries to her, you know, back, swelling, those kind of things, but also a broken, you know. right leg, which had her in a boot.
And fortunately for us, and I really say fortunately, We had, with Hans's guidance, bought a policy to get care in these kinds of situations. It's actually a little bit of a different product that we're talking about, but it is. Uh uh you know home health care insurance kind of thing that we were we were talking about. And You know, I have one daughter that's a nurse and I have another daughter who is. a school teacher.
They're both got wonderful careers. You know, really young, obviously. My one young daughter is only 26 and And and the other one is thirty-five and so You know, right in the middle of taking care of their own kids and all this stuff, they have busy lives. And my son is a general manager for a car dealership.
So, you know, all three of them are very, very, very busy. And so all of a sudden, here came this situation where both their parents looked like they needed care and a home. And like, what are we going to do? Because they can't quit their jobs because it looked like at one point in time. That I was going to not only have the surgery to my back that I had, but I was going to have surgery to my neck as well.
And Fortunately, like we had this policy in place that would pay for these things. And and my um Daughter, or slash, I think Hans may have called my daughter. We called my wife who said, you know, call. tests about this because they're trying to figure it out. And and as My daughters were sitting there in the hospital where we were talking about all this.
You know, I can tell you what it did for their hearts. To know that, gee, mom and dad had something in place, and we're not going to have to worry about the money. Mom and dad are going to get the care they need. We're going to come over as much as we can and they have.
Okay, because for the last two weeks. We have not been able to leave the house, but fortunately. You know, Tammy and I have been able to to care for one another. But at one time, you know. Two weeks ago, Hans was full on getting the policy ready.
Tess was getting the policy ready. Because if I'd had to have the second surgery, Tammy and I wouldn't have been able to take care of one another. And but it was uh I I I could tell. What it did for the hearts of my children to know: gee, my parents had planned on this thing. They have.
some policy in place Yeah. It would have really been a panic situation. That would have unfortunately at a time when our family was really like one of the. The miracles of this time to me. was our family came together like I haven't seen them come together in years.
And Tammy and I both said, you know, this is one of the most beautiful things that happened that God allowed this accident for was the way that it bound my children. together with each other and together with us. And to me, having this policy in the middle of it. made all that just that much um Mm. I don't know, more available that they could love on us the way that they're actually able to.
you know, with the current lifestyles that they have. And so I Believe me. You know, I'm not saying that stuff's inexpensive. But in a way, it's priceless. You know, that's all I can say.
Well, and so When I made the phone call, and I talked to both your wife, Tammy, and I talked to then. Test your daughter. who I both know both of them. I had to give them well, first of all, I just needed to listen to them. It'll just be there for them.
And then After we got into it a little bit, then I had to give them a little education of what this thing really is and what it's not. And then we got to think about it's just not an automatic thing. Oh, you need home health care, call up the home healthcare people, haven't come out. take care of them, send it in, the insurance company pays the bill. I mean, wouldn't it be wonderful if that's the way it worked?
But it But most of the time People don't involve us. They've got this insurance. And then you know, they're they haven't been in touch with their Agent in years, or whatever. And so an accident happens, the kids get in, they find it, and they start the claim process. And so what I You know what I trained both Tammy and Tess, as I said.
You know, there's six activities of daily living. And we don't want to mess with four of them.
Okay.
And then there's two of them that we're going to use because all you need is help with two of the six. That's it.
Okay, you don't need four of the six, you don't need five of the six. You can't get away with one of the six. You need two of the six. And my favorite activities of daily living. My personal favorites are bathing.
And dressing.
Okay.
So so why are those your favorites?
Well, They're the easiest to prove. And they're cut and dry. Come in. You can either get dressed by yourself Or you can't. I mean, it's just, you can get completely drafted.
The country closed. Get them out, get them on, get your socks on, tie your shoes. All that kind of stuff. Or you can't. Because if you can't do one part of it and you need somebody's help doing it, That meets the criteria for an activity of daily living.
Now do you see why I like dressing? Oh yeah. Because absolutely, I can assure you, because I've been helping Tammy for the last, you know, praise God, I have the ability to do that. you know, putting on our own Socks and icing her leg and things like that are just something she's not capable of doing.
So, I'm getting into a little bit of the detail here, but this is the stuff I'm communicating to them. from the hospital hallway. because Tess is going to the doctor. With each of you, and we're going to get the doctor to fill out this claim form, and I'm telling her. exactly what she's going to tell the doctor through the nurse.
This is what you put down in the claim form, although only if it's true. But bathing? Yeah. It is the second one.
Okay, so B is. is the same as dressing. You can either do it all by yourself. Or you can't. Okay.
I mean, and there's a lot of things that y you gotta get the water on. You you got to get your clothes off. You you gotta get in the thing without falling. You know, and even if there's a chair in there, if you can get into the chair by yourself, you don't qualify, but you just. You know, then you gotta wash.
And then you got to get toweled off. And you know, if you're as my old boy used to say, you're bad, sick. You can't do all that bathing stuff by yourself.
Okay.
So now we've met the criteria for the policy. Why should we put anything else? I mean, we could have the other four. And if you give the other four to the doctor, they're going to write a book. I mean a doctor is going to write a book or send the whole medical record.
All I want. is two activities of daily living, bathing and dressing. And I want him to sign the form. It's a good time to mention that this show is brought to you by Cardinal Guide, CardinalGuy.com. If you go to CardinalGuy.com, it gives you seven worries.
One of those is long-term care or short-term care as the case may be, because interestingly, You know, there's some application to this with Certain accidents and stuff like that. It's all in the same thing that we're talking about today. And again, that's all at cardinalguy.com. Hans mentioned the video that they did on this long-term care hybrid versus the traditional long-term care that we're talking about today, the beautiful show notes and a board and all that stuff to go with it, as well as Hans's book is very clear on all this stuff. the complete cardinal guide to planning for and living in retirement it's all there at cardinalguide.com but there's nothing in my world more important than the contact on their Tom page.
Because when this stuff starts to happen, to actually have somebody that understands it and knows it. and help you navigate it is just invaluable again. It's cardinalguide.com. We'll be right back with a whole lot more long-term Care insurance, traditional versus Hybrid, we'll be right back. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM.
a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Welcome back to Finishing Well with Uh on children certified CFP and and uh Amazing man that, from my standpoint, to help us with this very question today of.
You know, long-term care insurance, the traditional view versus These new hybrids, and so, what does that look like from a financial standpoint? Hans, it's an important decision that we got to plan for.
Well it is. And so Whenever I make these videos about long-term care and I get into the details, the corporate people call that getting in the weeds. You know, when I get into the numbers and the details, the stuff gets pretty dry, and it's not even that interesting. When I'm talking to somebody that just happened, what happened to you.
Well, they're all the whole family's all ears, obviously. But so I liked the way we started the first part of the show. begin first half of the shows we just You're a real situation. You bought one of these policies and it was already to kick in for you and just the security of that brought your whole family together, and then in the end. Things would work out you never even need it.
Okay, you probably could have used it. And it would have made things a little bit easier, but you were able to get by without it, and now you guys are functioning just fine.
So um But just having it there. Really, I bet you're looking at this policy and your wife, Tammy, is looking at this thing and your kids. They're looking at this thing much differently than they did a month ago. Oh, there's no doubt. Complete.
Yeah. Yeah. So Within our industry, There's like a debate. There's the people that sell long-term care insurance as their primary occupation. Yeah, okay.
They're feeling like a traditional long-term care policy, one of the old-fashioned kind. is the only way to go. And then what this show is doing is it's going to compare one of those. which we sell A lot of them. to the hybrid life long-term care policy.
So what is that?
Well It's a life insurance policy. Furnished. That allows you to access your life insurance balance with it. For long-term care.
Well, you're still alive. You haven't passed away yet. And so now you need long-term care.
So you dip into your life insurance benefit. While you're still alive to pay the bill for long-term care And then when you use up all the life insurance Over several years, and now you've used it all up, they have these things called an extension rider. When all the life insurance is used up. Then it starts paying like the other kind of traditional policy. It's paying for either your home health care or your assisted living.
So Two different ways to solve a problem. And there's a debate going on of which most people know nothing about. And I gave Robbie a few facts on that. I've been doing this 50 years, so I know about all the Debates and the people, and I don't really have an opinion in the debate, like which one is better. Because they're just different.
And there's certain people. That The traditional long-term care policy is going to work out best for them. And then there's people through the life long-term care. Hybrid policy is going to work out better for them. And some of it has to do with the amount of resources, the amount of money that they can put into something like that.
Yeah. Yeah. What we did in the video, and I would encourage you to go back and watch it. We're not going to have a lot of time to get into the details because we're spending it on the more important things. during the show here But the What we did is we took similar benefits.
on the traditional policy and said how much does it cost. And then we put similar benefits On the hybrid life-long-term care policy. I can't make it exact, but they're pretty close. And we said, how are you going to pay for this?
So, because that's the biggest difference between the two: what is the cost up front? And then what are you going to get out of it in the end? And so it is It's a pretty fair comparison in the video. And we did it on a 65-year-old man and a 65-year-old woman. Yeah.
The policy pays $6,000 a month. And it pays the That's $72,000 a year. for either home health care or assisted living. And it pays that amount. I believe for four years.
You can. And that's in the first year. This thing has inflation on it. Both policies have inflation. Yeah, and if you started using it when you're 85.
is $10,000 a month. for $126,000 a year. for 505,000 max.
So Pretty rich benefits. And they would have, this thing, either one of these would have been just fine in the situation that you're in, especially if it went on for years.
Okay, and very similar to the way your policy would have been. But the gist of that is really not what I want to talk about today because I made a Point in the video, which Robbie watched. And I said. The least expensive way to get into long-term care is a man could do this. for about three hundred seventy five bucks a month, he could get this policy.
65 year old man and a 65 year old female can get the same policy for about 650 a month.
Okay?
So women pay a lot more for long-term care insurance than men do. especially on the traditional. And on the hybrid side, A man can buy these similar benefits putting down $122,000 Right off the bat.
Okay, I mean it's just Yeah, and so a lot of people don't have 122,000, so this debate is kind of pointless to them. they're going to buy the traditional long-term care. That's the man's price, $122,000. But you could also split it up over 10 years and pay $15,000 in there. or you could pay till you're 100, it'd be a little over 10,000 a year.
And you say, well, why would I want to pay $10,000 a year when I could buy a traditional long-term care? This thing has life insurance.
So if you live your whole life and you put all this money in it, And you never use it. Is that That happens to a lot of people. They just pass away, they never use it, or they use it for a little bit. There's a life insurance benefit so that your money goes to your heirs.
So that's kind of the gist of the thing. And then Robbie challenged me after he watched the video, we're getting ready for the show. Is I don't think that the hybrid is more expensive. I actually think.
So, why don't you run with that a little bit, Rob? Yeah, well, you took the annual numbers, which again they can see in the video, and I just. divided it out because The woman's policy, as I recall, was $132,000. Um with an annual you know payment of Around $8,000 a year. And so, what I just divided those two numbers, and I realized, wow.
This woman would have paid that $132,000 within 17 years of starting the policy. And I went. You know, if she started when she was 65, that... That the hybrid was a whole lot better investment from my standpoint because not only would she Had paid those premiums, she would never have to make another premium ever again because once you get the money in that policy, you're dumped. And so now I've got no more presentations.
So, people take a CD, or they even have a way to do this with IRA money. It's not this policy that's in the video, but they take a chunk of money, they pump it down. Yeah. That's it.
You don't ever pay again. And then If you like I said, if you die without using it. Um which is a lot of people. Or we would say a lot of people, a lot of people use it for a month or three. which is kind of like not using it.
And you die. This money that you chunked in there, I mean this thing has a death benefit of $144,000. It's pretty hot. And even I loved it from a standpoint of you think about it. The premiums on the regular long-term care policy can go up.
Well, if you chunked in on the hybrid, that premium is never going to go up because you've made it all, or you're making it so that the premiums are never going to go up on you. But then also And this was the part I told you I learned I'd never seen before. That even if you've used up all of your life benefit, you know, the 144,000, you used up all of it for long-term care. Even after that, when you pass away. It's still going to pay, I think you said, somewhere around $29,000 worth of life insurance.
And so here's this. Situation for this family, not only did it Pay out four years of this benefit for this person that obviously would have desperately needed it. But then they're still $30,000, pretty close to $30,000 in cash. To finish whatever final arrangements need to be made and also help. You know.
Whatever else is left there, and that's tax-free, and which is in both cases, the benefits are tax-free. And again, these become critical issues when you're in that position. And I just thought. Wow, when I looked at it, I saw benefits to the hybrid I had not seen before.
Well, and so let's just bring up another point here. This is that. There's no point in getting too deep into any of these policies. Till we find out if you can get it. Right.
Because both of these policies have a pretty thorough Health exam. And I don't want to scare you off. There's a whole lot of people. I mean, when you start writing insurance on people that are 65, 70, 75. They're going to have stuff wrong with them.
They're going to have illnesses. Yeah. A lot of people, you're going to be just fine. But there's going to be some people. They can't buy either one of these bosses.
Yeah. And then You know, then what you're going to have is You're gonna think well I can't get any of them because I'm So, we want to know this stuff on the front end of the conversation because we've got other alternatives. We've got an annuity. that has much less questions.
So So these are not the only two things. we have that are presented in this video. These are just the easiest to compare one against the other. We got a whole bunch of solutions for you. And it doesn't make a big difference to me which one of them you buy.
I just want you to get your family covered.
So that if the situation happens to you, your family's got something to rely on. I mean, the point that I want to make, a couple of points on your story that you told at the beginning of the show. is first This brought your family together. I mean, a man of God, such as you, is able to see that. I don't really hear that out of a lot of people.
That they can look through all the mess and everything that's gone on over the last two weeks and this horrific accident in the hospital state. And you're sitting here telling me how. God used this to just bring your family together and you're closer and you can celebrate that. I totally agree. And so that's why we're going to counsel you to go to CardinalGuy.com, where the show is brought to you by CardinalGuide.com.
And there's a beautiful video that goes into a lot more details and shows you examples of how to do that under the seven worries tab, this being long-term care. And then also, Of course, Hans's book along these lines: The Complete Cardinal Guide to Planning Foreign Living in Retirement. And the ever-popular contact Hans and Tom page. It's all there at cardinalguide.com. Great show, Hans.
Thanks. Thank you and God bless you. The opinions expressed by Hans Scheil and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice.
Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you. Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation.
Finishing Well is designed to provide accurate and authoritative information with regard to the subject covered. Investment advisory services offered through Brookstrone Capital Management LLC, abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency.
We hope you enjoyed Finishing Well, brought to you by CardinalGuide.com. Visit CardinalGuide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Han's best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement and the Workbook. Once again, for dozens of free resources, past shows, or to get Han's book, go to CardinalGuide.com. If you have a question, comment, or suggestion for future shows, click on the Finishing Well radio show on the website and send us a word. Once again, that's CardinalGuide.com.
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