The Importance of LTC with a Personal Touch!

I consider Long Term Care Insurance one of the most important investments you can make on your future. Inevitably, we are all going to get old and at some point have the necessity for nursing care, preferably in our home.

In the private duty home care business, the funding of that care is important and if you do not plan early, you could be jeopardizing your bank account, let alone your family to provide this care.

But don’t take my word for it, listen to the story of a man who experienced it first hand, a guy who sells Long Term Care Insurance for a living.

I recently met with Bill Dyess, a very experienced insurance planner, and his personal story fascinated me. Thank you in advance for sharing it with us Bill:

My story begins with two aging Divorced Parents. My mom 66 with severe COPD and my Dad 68 was pretty healthy. I was the Caregiver Son. One of 6 children..4 girls and another brother. I had the assets, ability and made the time to oversee my mom’s care. I arranged for a 24/7 live-in aide at age 70.

Both parents had little assets to speak of. I was their lifeline for most everything. My mom and dad had a small LTC policy paying benefits of $3000 per month, but not enough to cover over the years the $3500 to $4500 cost of care each month. These policies were covering 2 years of care.

I made up the monthly difference out of my pocket. When my mom needed 24/7 care at age 70, I went to my dad and we discussed the options of paying for his care when he needed it for amounts above and beyond my dad’s minimum Home Health Care policy benefits. My dad did not have a financial answer. So being that I had 30+ years in the Long Term Care Insurance Business, I stated to think how I could come up with a financial solution to the lack of funds that both parents desperately needed.

The idea and solution I came up with believe it or not was Life Insurance. For my dad (as I did with my mom), I made a promise to use my assets, savings and investments to pay for both their care. However, I knew that this path would financially wipe me out if I did not find a way to refill my savings account when they both past away.

The answer came to me one day, it was Life Insurance, and it truly saved the day! You see, my idea was that I would purchase a six figure face amount of Life Insurance on my dad for which I paid the premium, was the owner of the policy and I was the beneficiary of the death benefits. In April 2011, my Mom’s retirement money had run out and ironically the next month, my dad unexpectedly died. My dad never got to use his LTC Benefits, but the Life Insurance funds were now available to reimburse my expenses that I was laying out for my mom.

On the day my dad passed away, I told my mom that my dad had left her a present.

She was very surprised to hear this. When I told her of the death benefits of the policy I had taken out on dad were now available to care for her, the tears of joy and relief came across her face. She felt she now did not have to put the financial burden on me anymore.

My mom lived another year and a half but the proceeds from the tax free Life Insurance policy, made my mom’s life very comfortable and financially worry free until her passing.

The money that was left allowed me to repay some of my cost.

One final note on my mom. About the same time my dad took out his Life Insurance policy for which he went through health underwriting to qualify for, I purchased a Guarantee Issue Life Insurance policy for my mom. Now my mom was not insurable so we could only buy a $35,000 face amount. The full face of mom’s policy could not be paid until after two years had gone by. If she did die, then all I would get back was all my premiums plus some interest in the first two years. I thought, this was not a bad idea as it was like a forced savings plan and I would always get my money back plus some growth. My mom live a total of 9 years after we purchased the policy. So the full amount was paid to me to also help reimburse my out of pocket costs.

I hope my story helps many of you see the importance of not only having Long Term Care Insurance in place but also how Life Insurance can also play a major part in helping pay for the high costs of care.