Long Term Care By The Numbers

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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. Welcome to Finishing Well, with certified financial planner Hans Scheil, and today's show, I know you're going to want to tune in, it's called Long-Term Care by the Numbers. And so I'm going to challenge everybody on the word numbers. Actually, God kind of showed me this this week, that I don't know if you study things like I do, but there's this word, it's usually translated numbers actually in the Old Testament, but the first time you see the word is when God visited Sarah when she was about to have a baby when Abraham was 100 years old, like what the heck? And then you'll find the word again in the 35th Psalm, which Jesus actually quotes from the cross, when he says, into your hands I commit, that word commit, my spirit. And there is that word again, and again, and especially in the book of Numbers, is it quoted as usually translated, the word numbers.

And so we're talking about long-term care by the numbers. This fits really, really well, because the idea that both Sarah understood, and obviously King David and Jesus, is that the word that they're using is that you and me, we are a number. And when we enter into sort of a meeting with God, or a mustering, or a relationship with him, then we are part of the number of God. So if you're like me and Hans, and you were studying the Bible this morning, and you were thinking about those kind of things, then you've got to be in that number, right?

When the saints come marching in. Well, you know, we're going to talk about long-term care by the numbers, so we're going to give you some statistics. But the point that Hans makes in Tom so well in their video at Cardinals Advisors on YouTube is that we are each one of those numbers. And so our case is individual as well as corporate, because we are the body of Christ, but we each are individuals as well, right Hans?

Well, we are. And I spent my first several years, say 10 or 15, just selling long-term care insurance, and I guess you could call it scaring people into buying it. I mean, I didn't really look upon it that way, but we're giving them two out of five people are going to use long-term care, an average of three years, and we just repeat these old numbers all the time to people, and it was like borum, because if you think about it, like if you're buying fire insurance on your home, the person that helps you with that is not going to sit down with you in advance and say, well, you know, your home, one in a thousand burned down every year, and so then you're not going to say back, well, I wonder how I'll fit into those odds, and then, you know, then we got the danger of flood. I mean, there's something about long-term care insurance that people spend their whole life deciding like, hey, whether they're going to buy this or not, with a leaning toward not, okay? And there's just something going on there, and so I changed my whole strategy when somebody really showed me, this isn't about the numbers, it isn't about the statistics, it isn't about the chances of using it, and it's more about really love of family, is just that, you know, like I don't want my kids to go be worried about money when they're dealing with all the problems of taking care of me when I'm 85, okay? And I also want to make sure that I get really good care from professionals, and I want my kids to keep on living their life so they don't have to stop living. I want the same thing for my wife, and she wants the same thing for me, and so this whole subject is not necessarily about the numbers, but I have been reluctant to even talk about numbers for a long time, so we're doing it now. So I read this article, it seemed to make sense with me, all these numbers come from long-term care claim data, and this lady's a very good professional, and she wrote a good article where she just took the specific numbers, and I didn't put every number of her article, I just pulled the ones that meant the most to me. So why don't we just dig right in, and we'll talk about, there's eight of them here, so we're going to see if we can get through all of them, okay? Yeah, absolutely. Okay, so the first one is that women are two times as likely to need long-term care as men.

Two times. Their long-term care claim is longer, which means they survive longer, they just live longer, and then it also... They go to the doctor.

They go to the doctor sooner. Well yeah, I mean it's just, and so when you're the insurance company and you're just looking at this, or the people analyzing claims data, women pay more for long-term care insurance because they use it more. Now whether you want to take that and say I better buy long-term care because I'm a woman, or maybe I can squeak by and do without it because I'm a man because I'm less likely, that's not really why we're going over it.

We're just stating facts, and both of you need it. Women are going to pay more for it. If we write a couple's policy, you're not even going to know that because it's going to be all mixed together.

Right, and that was really helpful too when I watched the video to know, okay, so as you buy it together as a couple, that's sort of you're bundling. You know, obviously the insurance company is going to take the odds of both of you and you kind of get it there in the middle rather than having to just face, you know, the woman's rate herself, right? Well yeah, go over to an assisted living and look around, especially in the memory care unit, and see how many women you see and count the men. And I'm telling you there's a whole lot more women in there than there are men. Oh, I do a devotion to assisted living every week and have for years, and I can assure you there are probably 10 women, every man that's there, but the men laugh at my jokes a lot better, I would say, Hon. They do. When I went there to see my mom, which was just about every day, I used to sit and talk with the guys because I usually had a business suit on and they just enjoyed some other man company, you know, because I mean I'm sure they were real popular with the women, but they were kind of longing for a good conversation with another man.

And I would always take time to talk to the guys, especially if they're sitting over there by themselves. Yeah. Okay, the second one is 48% of the claims are less than one year. So that was a shocking statistic to me. So it means half of the claims on these long-term care policies is less than a year. The people either recover and get better and they go off a claim or they die. But it tells you something and I've always kind of known that when we're showing all these statistics of the people that are three, four, five years, that's the outlier. I mean the most of the people that use this stuff are going to be less than a year. So it also speaks toward buying at a minimum recovery care insurance or short-term care, which is going to cover a year or two depending upon how we structure the policy. So you got anything to say to that, Robbie? Oh, absolutely.

That happens to be what I have, just from a standpoint of the affordability right this minute. And hopefully at some point we'll be able to expand upon it. So my wife and I had a discussion just yesterday and this were her very words. She just had surgery and she said, you know, we need longer long-term care insurance. I said, well, the good news is we have a lot more than our parents had. And so we have some to go against it, but it is nice at least to know that you've got some of it covered, but you're right.

I mean, that's only half the people. Well, you got more than some of it covered. You've got the real crisis period because if you all of a sudden need long-term care, your kids and your whole family is going to be sent into shock and crisis and people are going to be saying all kinds of things and coming up with all kinds of solutions and rearranging their schedule and all kinds of stuff. And the last thing you want them worried about is money and what's this going to cost when you call in the professionals. And you've got a year in a facility and you've got a year of home healthcare. So if those are put in the right order and we can make your illness and your need for care kind of tuned into spending a year at home and then going to the facility for a year, it's really two years of coverage, but importantly that your family has got a year where they can just concern themselves with you and not how they're going to pay for care and you worrying about how you're going to pay for it. You kick the problem down the road that if it does get to be a long-term care thing, where it's several years, at least you've had some time to prepare for it. Okay? Oh, yeah, that is invaluable.

And as I, you know, in both the case of my mother-in-law and my father, you know, neither of them would have used it for a year. But of course, we have a lot of numbers to talk about and ways that this can work for you and your family. And it's all going to come at you in the next segment. But meanwhile, we want to remind you that the show is brought to you by cardinalguide.com and at cardinalguide.com, you're going to find the Seven of Worries tab. And there at that tab is you'll find the show notes for today's show, as well as a YouTube video on the same subject, which is at Cardinal Visors is their YouTube channel. But Cardinal Guide is the website. And again, this show is under the long-term care tab. And there's, of course, a tab where you can contact Hans, which is a great way just to find out whatever your specific thing is, you know, by your particular numbers. It's all there at cardinalguide.com, as well as Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement. So we got a whole lot more long-term care by the numbers coming at you.

So stay tuned. 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 Certified Financial Planner Hans Scheil. And today we're talking about long-term care by the numbers. And these aren't numbers as to whether or not deciding on the issue. It's more numbers to help us qualify what we may need and give us some ideas on how to really formulate our policies and stuff like that, right Hans? Yeah, and so the third statistic or number that we have up here is the average length of time that long-term care is used is 3.7 years for women and 2.2 years for men. So we're back to that first statistic is women need this longer. But don't let the averages fool you, because if it's an average, very few people are going to end up right on the average. You've got some people that are going to never need it, and then you've got people that are going to need it for 15 years.

So just a point. So yeah, interestingly, that particular point I find fascinating because, you know, my father's wife was more than 20 years younger than he was. And for whatever reason, I don't know, he chose to take out a wonderful long-term care policy on her, but he himself did not have one, because he figured, you know, he'd go the old-fashioned way, whatever that was, you know.

But as it turned out, she only needed her long-term care, which they used, for about four months, because unfortunately, she had brain cancer, and she went fairly quickly. But my father's would have lasted longer than hers, right? Just getting back to the numbers, that just did not, number one, who would have guessed it, that that would have happened so much younger, but then secondly, it was so much shorter. And the deal is that he sat down and looked at it. She was 60, he was 80, and they showed him the price for an 80-year-old man to buy it, and they showed him the price for a 60-year-old woman to buy it. He said, I'll take the 64-year-old woman. Forget about the old man. That's what happened.

Okay. Knowing my dad, you might be right. Yeah, I went over and met with him. So his dad was great. He was a businessman. I mean, I like meeting with older businessmen.

I've been doing it all my life. Hey, your dad was great. So he was a tough cookie, though. So number four, the long-term care claims greater than a year. So now they're going to look at all the long-term care claims that lasted a year at a minimum. They averaged 3.9 years. When you throw out all the short stays that people could really sell fun, and now you're getting to the people that are there at least a year, the average is 3.9 years. Okay?

Wow. So what that's saying, yeah, because that first group, so half the people that even would have used it, would have used it, you know, 50% of them, you know, were going to need it. But those people that lasted more than a year, in other words, you cut the first group by half, but then all of a sudden, that group that did need it, needed it a long time. And that's the average. So, you know, on the other side of this, you've got 10, 15 years. And on the low side, you just got one, two, or three years.

So we don't want to read too much into this. It's just a lot of people only need it for a matter of months. And that's kind of like a whole lot of people. And then once you get past a few months, in over a year, now you're going to be there a while.

Okay? Or your chances are you're going to be there for a while. So you move on to the next one, 15% chance that long-term care claim will last more than five years. So now we're going to the other side, is that you take all the claims, 15% of them are more than five years.

And so this is what your wife was talking about last night, where she was saying, you know, we don't have enough long-term care insurance. Well, I mean, I mean, you just could make a point that 15% of the people that use this stuff are going to be there longer than five years. I mean, that really sticks out. Oh, it does. And I would suppose a lot of that has to do with Alzheimer's, right? It does.

And we're going to get to that up at number seven and number eight. So just hold that thought. There's a 2% chance a long-term care claim will last more than 10 years. 2%, that's significant. And if it was higher than that, insurance companies wouldn't write lifetime policies.

They just wouldn't. I mean, if it was, you know, but 2% is pretty significant. This is, of all the people that use it, any amount, 2% of them are going to be longer than 10 years. So that's what we're buying insurance on. And we're buying insurance on the over five years and we're buying insurance on the whole thing. But that's the thing that may happen, probably won't. But if it does happen, you're going to be glad you have insurance if you're part of that 2%.

Yeah. From my perspective, I'm glad I have insurance if I'm part of the, you know, 48%, right? Because in each case, the family now is all of a sudden got a lot of decisions ahead of them and you're not necessarily in a position to help them make those decisions. And the other part that having dealt with this recently on two different parents is that folks, when they get to that age, they like to hide how sick they are. And so they act like they're competent, but they're making decisions where they're clearly not competent. And you got to almost have to catch them in the act to realize that, oh my goodness, they're not, they shouldn't be home alone.

I mean, kind of thing. Well, they're in denial. But the thing is, is you're in denial while you're playing the police here, because you're looking for reasons that they're okay too. And you're just observing the places they aren't.

And you almost need an independent auditor. And, you know, those are the kind of people your dad was thrown out of the house. Because, you know, because people are in denial about this dementia thing and losing your faculties, losing your ability to take care of yourself and make your decisions. The person that has it is in denial about it.

And the people around them are in denial. And even when the kids move out of it, it, you know, it's just, so this next statistic talks about dementia and Alzheimer's. So it's the number one reason for long-term care claims for people 65 plus.

So I didn't know it was that high. I mean, I knew it was a lot, but it's the number one reason. And you'd think that if, you know, if you got heart trouble or you got diabetes and you, you know, have trouble walking or you have COPD or all kinds of physical ailments, you just go to a facility. When you look around at who's in there, it just seems like they've all got physical ailments. But the number one reason for long-term care claims are dementia, Alzheimer's, and other cognitive impairments. So, you know, a lot of people can live with their physical ailments and take care of themselves, but when their brain starts malfunctioning, now they've got to go in a facility or they got to have somebody at home to take care of them. And then number eight is on average Alzheimer's. People with Alzheimer's live four to eight years after diagnosis. And that's a pretty wide range. And, you know, I know in my mother's case, we were murky about when she was actually diagnosed.

Okay. I mean, it was just, did she have it? Did she not? But this must be after they finally get to the doctor and they do the test and then they do whatever it tests and they send her to the specialist and they say, yeah, you got it. But my contention is my mom probably had it three or four years before we reached that diagnosis point. And then she lived another eight or nine years beyond that. And that was 10 years ago. And 20 years ago when she was diagnosed, how long, when we get this stuff, if we do, how long are we going to live after they diagnose it?

Just because people are living longer with everything. So the moral of the story is there's some chance that you're going to be needing care for a long period of time. It's a remote chance, but it's there.

Okay. I don't think it's a remote chance myself. I think it's a remote chance it's going to be over 10 years, but I think it's a very likely chance, obviously, in my opinion, about 50% that you're going to need some. I think you're absolutely right about that. I was really referring to the extreme claim, the thing that's going to cost your family or they're about to half a million to a million dollars as opposed to 60 or $70,000. But even at 60 or $70,000, you know, from my perspective, if you have the insurance, the burden isn't on the family. And if the idea of the insurance is to get the burden off the family, obviously, if it's there, then all of a sudden, it just changes the way the whole thing's handled. Right.

It does for the good. And your dad had plenty of 60 or $70,000 to pay for his own care, try to get the money out of him to pay for his own care. Right.

That was that was difficult. And your dad is not unique. I've sat down with people with millions. And in there with their kids, or we're meeting the kids in the conference room and their kids are buying doing financial planning with me buying long term care insurance. But now they're responsible for mom or dad. And they're trying to talk them into getting care that the kids can't provide.

And mom or dad's got millions. And yet they're throwing the caregivers out of there. I don't want those people in here. Send them out of here.

I don't need them. And that's real typical. If those same people had a little insurance or even short term care insurance, they'd be all for it. As we always talk about it, CardinalGuide.com, the seven worries tab, one of those worries, of course, is the long term care. And as we've been talking about today, and there you're going to find numerous shows that we've done on the subject as well as these YouTube videos through Cardinal Advisors. And also at that tab, you'll have the show notes from today, which will have a lot more statistics and actually the article that that Hans is talking about that are there in the show notes for again, under long term care. And again, we want to remind you that also lots of information and resources there in Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement. And as well as, of course, the contact information for both Tom, who's on with us often, but he's off having a baby.

How wonderful is that? And, of course, the Hans contact information, which again, is we've talked about throughout the show today. These are numbers, but we're each individually a number and very important to God.

And your situation is different based on, you know, your family and your needs and all those things. And so it's just something that we really want to highlight and help people come out of denial, right, Hans? Yeah.

Yeah. And so as you begin to just sit down and really plan this and bring your whole family in to have this discussion about, have you thought about what happens when your old man starts to have these problems? You know, what a neat way to show your family you really care. And then you're planning for that. And then this is a big discussion they need to have amongst themselves, right, Hans?

Well, it is. And when people come in to us for financial planning, we talk about this with everyone. And then, you know, if they tell us that they shut us down and they want us to do the financial plan and not include this, then we're going to put in their financial plan just exactly that, that they just decided for self-funding. And try to set it up.

But for the people that have the money to self-fund, it doesn't make sense tax-wise, efficiency-wise. But anyhow, I don't want to get into a sales pitch. We really don't do that when you call us. We just, we're going to sit down and look at what you got, look at the resources you have to pay premiums or make investments in this stuff. And then we're going to make a recommendation.

So we can do that right over the phone or on a Zoom call where we can sit and look at each other. That's wonderful. Well, great show today, Hans. Thank you so much. Thank you. And God bless you.

God bless. 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.

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Finishing well is designed to provide accurate and authoritative information with regard to the subject covered. 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. 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. CardinalGuide.com. This is the Truth Network.