Insurance to Stay in Your Home

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This is the Truth Network. 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, IRAs, long-term care, life insurance, investments, and taxes.

Now let's get started with Finishing Well. Darrell Bock Finishing Well is a general discussion and education of the issues facing retirees. cardinalguide.com, cardinaladvisors, and Hans Scheil CFP sell insurance. This show does not offer investment products or investment advice.

Welcome to Finishing Well with certified financial planner, Hans Scheil. Today's show is insurance to stay in your home. And home is a humongous concept when you think of it biblically because, and I think that's absolutely amazing that the Jews have taught for years that the reason that the Torah or the Bible itself starts with the letter Bet, which you may know Hebrew letters are pictures of things. And so what is the Hebrew letter Bet, which is that sound you hear, is a house, right?

Which means home. And the reason they say that the, you know, you know that the first line of the Bible is in the beginning God, right? He created the heavens and the earth. Well, the idea that it starts with a Bet was that God wanted a home. He wanted a place, right, because he is this infinite being and he creates a finite world in which to some extent he had to shrink himself in order to do that. But as he created this finite world so that he could hang out with you, he could hang out with me.

He wanted a place, I love the way the Jewish sages actually say this, that he could put up his feet and be himself, right? And that is what all our hearts long for. And it should come as no surprise that a lot of people argue the number one song title of all time over love songs are songs about going home, like I'll be home for Christmas or, you know, homeward bound.

All these things are part of what all our hearts, they long for this. And as we think about how to stay home, insurance to stay in our home, what we're going to be talking about is actually long-term care. But I want you to think with me for a minute on how much easier it is to feel at home in your house versus in the hospital. It's hard to relate to your family. You can't rest well.

All these things are difficult. And you're talking to somebody who's spent a lot of time in a hospital, so I know how much more wonderful it is to to actually be at home with your family. And along those lines, Hans, we got a lot to share. Well, we do. And I, you know, I said, if you put it this way, I've been selling long-term care insurance for like 40 years since these policies came out in the 70s and the 80s and been taught by a lot of people like how to do it.

And then I've taught a lot of people. Yeah, it just seems like we've been in a long debate. I've been in a long debate my whole career where I'm like, I want people to buy this. They want to give me reasons why they're not.

And it really, people are kind of dancing around things. And so I decided a while back to just stop selling, okay, just stop selling long-term care and stop trying to talk people into this and start perhaps describing and helping people put themselves in a position so that if this happens to them, that they are going to have choices, that they're going to, that's really the only thing money does for you and insurance and resources is people that have money and they get sick and they need care, if they have money and resources or insurance, they've got more choices than people that don't have money. People that don't have money or resources or they have money and they're not willing to spend it, which is a lot of elderly people, then they're much more limited in their choices when they need care. So, and there's some chance that all of us aren't going to need, not all, there's some chance that many of us are not going to need any care, any custodial care. I mean, people that have a heart attack and they just pass away quickly or they have a heart attack and then they pass away three months later, they don't need any of this. And that's actually one of the objections that people have given, oh, I just, you know, my family, they died at a young age and so this is, people start throwing back at me all the reasons why they're not going to need this. And I don't engage in those debates anymore. So, for the purpose of this show, we're just going to get on with it. And what I wanted to do before we talk about some of the solutions is just, what are we really talking about here? Home health care and custodial care is that somebody helping me in my home that I'm paying to do that.

And it's just, I mean, I got it right here. It's paid assistance with activities like, you know, there's five of them, bathing, dressing, meals and meal preparation and meal cleanup. And you can't eat TV dinners for the rest of your life. And frankly, there's many people getting home health care that would have trouble just getting the thing out, the TV dinner out of the freezer and sticking it in the microwave and getting it cooked to the proper temperature and getting it served.

And then you got to go to the store beforehand or have them delivered. I mean, you just, meals are a big thing. And they got that solved at the assisted living or the nursing home. You just get wheeled down or you walk down to the eating hall. And if you can't do that, they bring it to you in your room.

But when you're at home by yourself or with your spouse, the whole issue around meals is just a matter of whether you can stay there or not. Housekeeping. I mean, when we call on some people in a crisis, what I mean by a crisis, a lot of times I work with people's kids or adult kids who are in their 50s and 60s that are already trying to help their mom and dad who just, you know, had a crisis come on, like a stroke or just something mom got lost or she was wandering. Something happens. And then this housekeeping issue is when you go into their home, this person has needed help for years sometimes. Now you go in some homes or need is a pin.

So, you know, that's not the issue. But a lot of folks, it's gotten to a certain point before they're calling in help. And you can get somebody, you can use this insurance to pay for somebody to keep your house up. Come in twice a week and make sure the place is not a mess and it's fit for living.

Erins, you know, is the next thing on there. Just having a person that can take you to the doctor, can take you go grocery shopping, go grocery shopping for you, take you out and about for some leisure or to go to a park or to go watch your grandkids play baseball or your neighbor or something. I mean, it's just, so I wrote down these five things, bathing, dressing, meals, housekeeping and errands. I mean, you get assistance with those five things. You can have a person that otherwise is in assisted living or is going to a nursing home, can actually stay home for quite a while. Yeah. And, you know, I know for me personally, you know, I can't help but always take myself back to visiting my dad when he got, you know, after the fall, they kept taking him to what they called rehab, which was essentially sort of a nursing home that was going to give him his physical therapy and stuff.

And, oh, how I wish I had not, you know, said, let's go do this at home because he was so uncomfortable and it was so miserable for him when really all that I now know would have been available at home had we been able to, you know, avail ourselves of this resource. Sure. And if you plan it now, when it happens, you're going to have a plan in place. So what we're going to do in the second part of the show is we're going to talk about three different solutions for this problem, three things, three different things that you can take advantage of or you can purchase so that when you get to that point or your spouse gets to that point, that you're going to have some financial resources in place. I mean, they're traditional long-term care, short-term care, and hybrid long-term care insurance. So there's three different things, and we're going to talk about them on the backside of the show. But I didn't want to just open up with just talking about insurance and premiums and benefits and all that kind of stuff till we really position what exactly it is we're talking about here.

Yeah. And for me, the eye-opening experience was, as I began to do these shows with you, is I thought Medicare paid for this stuff. If somebody had asked me, I would have said, oh, I'm sure Medicare pays for that. And what I found out very shortly, both with my mother as she went into that need as well as my father is, yeah, Medicare pays for it for about 30 days. But when they realize that you're not getting better or whatever the situation is where it's just custodial care like you're talking about, Hans, then they stop paying. And if they don't pay, they're not paying. And this is not going to be paid for by Medicare.

Yeah. And frankly, they're not going to make meals for you. I mean, maybe you can get meals on wheels. They're not going to clean your house. And they may not help you bathing and getting dressed. So what you're talking about Medicare will pay for for a short period of time, because you only need it for a short period of time, is skilled care. And perhaps they'll do some custodial care along with the skilled while they're there to make it work. But when the skilled care stops, you know, and that's physical therapy, and that's occupational therapy, and that's changing bandages, just doing all the things that nurses and doctors and therapists do for you. That's not what we're talking about here.

This insurance will pay for that as well. But what we're talking about that goes on for a long period of time is just functional things, like breathing and dressing and meal preparation and housekeeping and errands, that sort of thing, that allows you to just stay in your home and be where you're the most comfortable. Yeah. And it's, again, as we've talked about throughout that this is just to just think how much quicker you get better when you are at home, you know, versus that whole, whether it's rehab, nursing home, assisted living, all those places are uncomfortable compared to home from my perspective.

They absolutely are. And so some people are very happy there. And so if that ends up being like where you start or it ends up being where you end up, then fine. And we're going to make the best of it. And some of them can be nice places.

So I don't want to diss them, but most people, if they really sit down and think about it, they want to stay home. And I'm going to show you how to do that. All right. Well, this show is brought to you by cardinalguide.com, where you can find Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement. That's at cardinalguide.com. And his YouTube channel, which is Cardinal Advisors. So if you go to YouTube and look for Cardinal Advisors, you can find videos along these lines of long-term care and all these things we talk about on the show every week.

So we are going to go on a break. When we come back, we're going to have, you know, one of the solutions on today's show, insurance to help you stay at home. Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources by leveraging Hans' expertise in qualified charitable contributions, veterans aid and attendance, IRAs, social security, Medicare, and long-term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday school, Christian or civic group. Contact Hans at cardinalguide.com. That's cardinalguide.com.

Welcome back to Finishing Well. As certified financial planner, Hans Scheil today show insurance that will help you stay at home. And we were going to get into these different kinds of insurance now, Hans.

Okay. So we're going to talk first about traditional long-term care insurance. And this is what most people think about when we bring up the topic of long-term care insurance. And the modern policies are going to pay the same benefits at home that they would in a facility of the traditional long-term care. So if you bought $300,000 worth of coverage and you've got that amount to be paid out for a nursing home or an assisted living, more than likely, you're going to want to read your policy. But if you buy it from me, you're also going to have $300,000 worth of home health care benefits.

You can use it either way. And the first thing I want to say is these policies are available in all 50 states and the District of Columbia. And we're licensed in all 50 states and D.C.

So we can help people all over the U.S. And we do all the time. Now, traditional long-term care has its minuses. And so let's start with them because that's what I was talking about in the beginning of the show. It's like people in this business, which is me for a long time, we're just in debates with people. You bring it up and they say, oh, I don't want to buy that because of this, this.

It's never going to happen to me. And a lot of folks are going to say they've read on the Internet about the rate increases. So I'm not going to buy it because it's going to go up later on. Yeah, that's clearly a stop sign to traditional long-term care because they can raise the premium on this stuff. And so people buy it when they're in their 60s or 50s, thinking that's what their premium is going to be until they're 90. And then they get it to be, you know, in their 80s or 70s and then this thing starts going up, up, up. But the insurance companies in the beginning didn't charge enough for this stuff.

They just under guessed it. So, you know, another show we could get into the facts of that, but these things are now priced appropriately. They still have the, you know, rules in place and they still have the provisions that if they're still not charging enough, if they start losing a lot on these policies, they can raise the premium in the future, but only with insurance department approval. And they're much more limited than they used to be in their ability to raise the premium.

So it's kind of like they've learned their lesson. But I don't want to sit here and talk around all that. So that's a disadvantage.

The other disadvantage of traditional long-term care insurance, unless you need custodial care, either in an assisted living or a nursing home, or you use it for care at home, you just could pay on this for years and then you die without ever using it or not using it much. And you kind of feel like you were throwing your money down a dark hole. That's another reason that people say, I ain't buying that.

Okay. And we'll talk about something more, but let's talk about the good points of it. Because you can get a very comprehensive plan that's going to reimburse your care. We can even sell lifetime plans with one company that they still offer those that, you know, you could be in the facility or you could be at home getting care for 10, 12, 15 years and would still be paying. So you can get a very comprehensive policy for an affordable premium. That's really the gist with them.

But it's all the negative surrounding around that. People have become very adept at talking themselves out of buying one of those things. And when you look at it as the only option, then you're going to wind up the end of your life.

You're not going to have any insurance for this kind of stuff. Well, the thing I've heard you say before, and it makes all kind of sense is really the long-term care policies themselves are the least expensive overall way to have yourself covered with this, right? Well, they are because they don't pay off to everybody. I mean, they only pay the people that need it. And then the people that need it, they pay them way more than they paid in in premium. I mean, that's the insurance concept. So yeah, we write this type of insurance on a whole lot of people. And I think that I'll give the example of some of them once I go through the other two forms, because there are alternatives to this.

So let's jump on to the next one. And the next one is recovery care or short-term care. And this is the insurance that you have, Robbie. So what are the disadvantages of short-term care? We'll start with the disadvantages today. So the disadvantage is it has a benefit period of 360 days or less. Like your policy has 360-day benefit period. So that means if you go in a facility and you're there on your 361st day, you're out of benefits. If you say, well, I don't want that.

Okay. Well, if you don't want that, then we're going to go back to traditional long-term care. Because short-term care, the advantages to it, one of them is it's not as expensive.

Yeah. And the particular policy that I sold you, you've got 52 weeks of home health care benefit. And then you've also got 360 days of facility care benefits. So you've really got two years of benefits if you could apportion it equally where you'd spend a year at home and spend a year in the facility that you would have two years of benefits.

You go over that as a disadvantage, and that's clearly a limiting thing. It's only available in 39 states. North Carolina is one of them. South Carolina, it's available. Virginia, it's available. Several other states. I can tell you right now, New York, Florida, California, they don't approve these things.

And the reason they don't is they just say it's not long enough. But in my opinion, they're just limiting benefits because we got long-term care insurance, and it's much more expensive in those states. But in any case, if you're in one of the states that this is available, it's a great alternative. And even if you think a year is not enough, believe me, wouldn't you have loved to have a year's worth of coverage on your dad so that you could have told your dad you're sending the bill for his care to the insurance company, and then you could have spent a whole year figuring out how he's going to pay for that stuff himself.

Right. Well, and actually in both my parents' case, had they had this policy, they'd have been completely covered because my mom needed some home health care, and then she ended up in the last weeks of her life where she would have needed to be in a facility, but it would have been covered. And the same with my father, that these policies would have been ample for either of those situations. I realize that in my case, they were affordable, so that's the reason why I went that way. Well, and they're not only affordable. You can get these policies, and they've got a short list of health questions. They took both you and your wife.

Right. And long-term care may not have been an option for you. I guess we'd never know, but in my estimate, this was one form of insurance that was available to you, it was affordable to you, and I can think of some people that have gotten this coverage that have way more severe conditions than you have, and so that just all you folks out there that think you can't qualify, or maybe you've been turned down for long-term care insurance, you might be able to get this short-term care or recovery care, probably will. I mean, it's very easy to qualify for these things, so that's a real advantage to it. And for people that have a lot of money or a lot of resources, the people that say, oh, I'll just pay for this myself if I have to, and I always think, okay, that sounds real good at 65, but wait till you're 85, and somebody is telling you, we're going to hire somebody to come care for you, and we're going to start spending your savings.

I don't care how much money you got. It's tough to talk an older person out of their savings to pay for people to come in and clean their house and make meals for them and give them a bath and that sort of thing. So, practically speaking, if they can qualify, this is wonderful. You know, you're just, hey, grandma, how about we send the bill to the insurance company for this stuff? They're all for it then.

Okay? Yeah. So, let's jump on to the third type, which is hybrid long-term care insurance. And hybrid is just the putting together of two things. So, it's taking a life insurance policy or an annuity and mixing it with a long-term care policy. Or another way to put it is it's a life insurance policy that allows you to access your death benefit while you're living to pay a long-term care benefit.

And it even, these things have extension riders. So, if you use up the whole death benefit while you're alive, certainly your life insurance benefit will be gone. But then there's an extension rider that kicks in and just pays you long-term care benefits for quite a few years after that. So, it's a way to be sure that either you or your family or your estate is going to get something significant out of the deal.

So, we've got other shows and other videos where we talk about each of these policies separately. But the hybrid is, we're selling a lot of these. People can even use part of their IRA balance to buy hybrid long-term care insurance. It's a really popular thing going on where people can just take a portion of their IRA or 401k and just move it in and move it over. And they don't have to make ongoing premiums. And it's just there for them if they get sick and need this. And the nice thing about that one is that if you don't end up needing it, it pays off the life insurance, right?

Well, yeah. And added to that is if you pay for this with a lump sum, you still haven't spent that money. That money is there. Like, if you had wanted to or you had to go back and get it, I mean, then you'd be without long-term care insurance.

But you can get your cash value or get a refund out of the thing. You know, you went to the other side is if you buy this and you're fortunate enough to not need this care or you just need a little bit of it like your dad did, well, then there's going to be a large benefit that's going to go to your beneficiaries so that you don't feel like you've just put the money put the money down a dark hole. And so you've got some stories along these lines, right?

Yeah. Well, I mean, I just think about, you know, with this hybrid long-term care bought with IRAs is how many people that there was just no way these people were going to pay the premium for traditional long-term care insurance. Like there's one particular, they're listeners of the show, and they're right here in North Carolina. And this lady listened to the show and she really got this IRA thing. And before she even called me, she contacted her 401k and said, can I do an in-service distribution? And she even took the number that I had on a previous show of $150,000 to cover her husband and her. And just a while back, we ended up putting this whole deal together and writing the policy for her. Then we get moving along and they both had some sickness, but her husband didn't get the coverage.

So they said, so now it's only covering her, so we're going to take less money out of the 401k. But where we're in the process of doing is writing short-term care or recovery care, your same policy on him. Because even though he was turned down for this hybrid, he's about 10 years older than her, he can qualify for the recovery care or the home health care benefit.

Right within that, with just a few simple short questions, he can ask them and Mark them all now. You know, we still write a good deal of traditional long-term care insurance. And where that works best is for the person, first of all, that still has their health. You can't have some serious chronic conditions. They're going to reject it for traditional long-term care. But if they still have their health, and then they're not in a position to buy one of the hybrids, you know, just person with good income, but not as much assets, or the assets, they certainly can't take the assets they have and throw them into hybrid long-term care, but they can afford the monthly premium. And then they want a comprehensive policy.

They're healthy enough to get it. I mean, we write a lot of these. And we even have a 10 pay plan with one company so that you could start paying on it now, and then you're done after 10 years. Again, I've run out of time before we ran out of show.

I want to be sure and let you know, of course, you can always go to cardinalguide.com, get Hans' book, The Complete Cardinal Guide to Planning for and Living Retirement, plus all those resources, even email Hans. He would love to hear from you. Again, we're so grateful for you listening today. And great show, Hans. Thank you.

Yeah, thank you. Finishing Well is a general discussion and education of the issues facing retirees. Cardinalguide.com, Cardinal Advisors, and Hans Shile, CFP, sell insurance.

This show does not offer investment products or investment advice. 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 Hans' bestselling 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 Hans' 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. Cardinalguide.com.