Focus on Risk: Don't be Afraid to Start the Conversation about Extended Care with Kelly Augspurger

Welcome to The Amber Stitt Show! In this episode, host Amber Stitt is joined by guest Kelly Augspurger, CLTC®, CSA, a long-term care insurance specialist, to discuss the importance of planning for extended care and starting conversations about it. 

Discover the key facts and insights surrounding long-term care, including the different types of care available, the role of insurance, and the benefits of proactive planning. Amber and Kelly delve into the various options for coverage, such as traditional long-term care insurance policies and hybrid policies that offer additional benefits. 

Learn about the benefits of working with an independent agent specializing in long-term care planning, gaining access to multiple carriers, and comprehensive planning. They emphasize the significance of early planning, highlighting that the ideal time to start considering long-term care is typically in one's 50s. 

Join the conversation as they discuss the emotional, financial, and logistical implications of extended care situations, and the importance of involving family members in the decision-making process. Gain valuable insights on how having a plan in place can provide peace of mind, relieve burdens on loved ones, and ensure quality care. 

Don't miss this engaging and informative episode of The Amber Stitt Show, as Amber and Kelly empower listeners to take control of their long-term care options and make informed decisions for their family and finances. 

Start the conversation today and be prepared for the future! 

To learn more about Kelly and her practice, you can contact her at: 
kelly@steadfastagents.com and on her website www.SteadfastAgents.com. 

She also has a podcast called Steadfast Care Planning and you can listen to her here: https://steadfastcareplanning.buzzsprout.com/ 

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Transcript

Unknown 0:02
Hello, and welcome to the amber Stitt show. I am your host, Amber Stitt, and today, my friend and colleague Kelly from steadfast Insurance Agency, and she's a longtime insurance specialist. And so I'm so excited to have you here for long term care Awareness Month. So welcome and thank you for being on the show.

Unknown 0:22
Hey, Amber, thanks so much for having me stoked to talk about

Unknown 0:25
it. Yeah, so we've been kind of planning this episode since the summer, maybe quarter two even after meeting each other at a insurance conference and it's always fun to meet people with as much energy and excitement about insurance planning as myself so I felt like we were kindred spirits or I don't know what you would call us but I'm so excited that we can bring some awareness to our the audience the pathways audience, but also, hopefully motivate people to take some action today and really start thinking about long term care planning differently. So I think we should kick off this podcast sharing a little bit about you your story, you have some tenure in the business. So and I know that long term care is not the only thing you do so let's talk a little bit about you, your team and a little bit of the history behind Kelly.

Unknown 1:17
Yeah, well, thanks, Amber. Well, as you did say, I am a long term care insurance specialist. So what does that mean? I help people plan for extended care so that they can live well. And how I do that is insurance is a part of that conversation and part of that solution oftentimes, but it's even more so a comprehensive conversation that I have with my clients and their advisors. So helping them to think through where do they want to receive care? How are they going to pay for care? And who's going to provide that care, and then the insurance is often the solution for the funding, right? This is what's going to pay for your care. It's an effective way to pay for your care because of the leverage and the other benefits and services that are included, which I'm sure we'll talk about later. So that that is what I focus on in our business and my husband and I Adam, we do have an independent insurance agency just outside of Columbus in Westerville, Ohio. I do work nationwide and working alongside financial planners, CPAs estate planners in their clients and then obviously clients one on one and helping them plan so why do I do this? You know, it's really a thrilling industry, right? First of all, people think that I love this industry because it's very near and dear to my heart, because I've had a lot of personal experience with extended care in my family. All of my grandparents needed care. Nobody had a plan. Nobody had insurance. Very, very difficult. I even helped my grandmother helped her with care for a couple of years part time only, personally. Yeah. And so at first I wouldn't have even considered myself a caregiver I was taking her to the grocery, taking her to doctor's appointments, getting her hair done getting those rollers set. Yeah, it really evolved over a couple of years where it ended up being more than just her driver more than just her companion. It was even helping prepare some meals and then it came to a point where it was I needed to help her shower and it came to that point. When I had a conversation with my parents. This has gone too far. Like right ma'am ah cannot stay safely at her home the way she is. Right. We need to bring in help or she needs to move to maybe an assisted living facility. So

Unknown 3:40
it's not an it's not so much that people don't want to do this as a capacity issue and as a safety issue to absolutely right

Unknown 3:47
as her granddaughter I was still working full time at that point. Fortunately I was in a different family. Business at that time. I was working with my dad and the car industry. And so I had flexibility in my day to be able to do that, thankfully, but I was giving up time and I was you know there definitely is a physical component of that. And then when it came to actually showering, oh my goodness, I was not capable of safely doing that I had no training or experience and how to bathe a grown person. I mean, I have kids at the time I didn't but you know bathing a grown a yes, a grown person that, you know, you can't just pick up you know like you can't a toddler or a baby. It really is a skill that you need to know how to properly do so. Because of that and then just other family experiences seen really the devastation and the consequences it caused, physically, mentally, emotionally and financially. You know, I didn't know there was a better way until I really came into the insurance industry where I realized there is a better way we can not only provide insurance solutions, but we can actually have family conversations with our loved ones

Unknown 5:03
and I love the conversation aspect I think in my husband even just talking about some of the planning for us in our 40s I think it's a natural thing to shut down and just say it's we can figure it out later and I don't know what what that is about. But my fundamental is with the pathways steps I want people to take action proactively so that you can make some really nice choices and really see what the options are and it'll feel so good and have less stress where we are facing things because Kelly you work with a lot of clients. You know things happen. If you've seen evidence of that

Unknown 5:41
right? Oh, absolutely. That that's the goal. Amber is to do proactive planning, so that you're able to stay in control of your care options. You're reducing burdens on family, physically, mentally, emotionally, right financially, and you can live better you can live well your family can live well because you've had these conversations you've done planning. Now, does that mean it's going to be easy when it comes to time the time of meeting care? No, but will it be easier? Yes. Because you've had these conversations you have a plan in mind. You've considered options and so you have a go to plan of okay, if this happens, this is what we're gonna do or this is ideal. We may have to pivot and change, right? But you have a good baseline and that's going to provide enormous value to your family.

Unknown 6:31
It's almost like a call, like doing a fire drill early so that when we're we're in this fight or flight moment of stress things are going on, we can just be very surgical and I've had friends laugh at me like wow, that's kind of cold. But if we can be surgical and methodical because they've gone through the steps we know where things are online virtually or who to contact. Right. Can you imagine just being there for the people? That need you and just being the right mindset for them. So it's very interesting because this is a thing that we all know we all are going to live up to a certain point where the there's there's just so many factors that can affect our health, but we might be living a long time. And so what's exciting though, is I mean, I've been in industry for 10 years, I think, are you close to that

Unknown 7:17
long so no, so I'm almost four so not as long.

Unknown 7:21
Yeah, okay, cuz I know the family business. So the business ownership That's right. Okay. So um, but we have so many options now. It is so awesome that we can really cover how if we if there is care to be received, how do you want to do it? And then there's different riders in different just different vehicles now, and it wasn't always like that.

Unknown 7:42
No, I've seen the last five years especially we have fewer carriers, but we have more options, more options than ever before. You're right. So we can really sit down with clients and tailor a policy tailor a plan to them exactly what they need, what's going to fit their health, their family, their finances, their preferences, to be able to come up with a plan that's going to work work for them.

Unknown 8:06
Yep. So I'm gonna let you dig into that a little bit. But I know that I've been studying this a lot and working with like you mentioned, there's a there's a bunch of carriers that we go to for multiple solutions, but then there's a narrowed down list. And then there's some specifics. There's some specific contracts that can also work with the upcoming legislation. And on the podcast, I'll be talking about that a little bit more, but there are some ways to also participate in exemptions for some of these state mandated, limited forced coverages that are very limited. And so I know that you can give people access to multiple solutions in that regard as well. So we'll talk about that a little bit more, it'll kind of cover itself as you as you go through some of the fundamentals. So, I mean, should we start with just kind of the basic mechanics of long term care insurance?

Unknown 9:01
Yeah, well, I think even before we talk about the insurance, let's define what does long term care even mean? Okay. So long term care and of itself, also known as extended care. I think when people think long term care, what is the first thought you have when you think long term care?

Unknown 9:17
nursing home, and that's the

Unknown 9:19
number one answer that I get people think nursing home when in fact, that is not where most people receive care, but that's what people think. So really, using the word extended care kind of gets away from that nursing home visual but what long term care extended care really is is if you need help throughout the day to do those daily activities of living, okay, transferring toileting, bathing, dressing, eating and continence. Or if you need supervision due to a cognitive impairment, guess what you need extended care and typically, that's going to be in more than 90 days, okay, more than three months. At that point, it is extended care. And so typically what we see in the United States is family members are providing this informally. So they don't have training necessarily. They don't necessarily have the experience, but they are doing this unpaid, informally for family members. Okay. And what happens when families do that, like in my family, what happens? Well, there's a tremendous amount of stress on the spouse because typically the spouse is the one that is providing the care physically right there helping them move from one chair to another, or maybe they're helping them in the restroom or bathing, right. So usually the spouse, maybe it's adult kids that are coming into the situation as well. So that's really what long term care extended care is. referring to. And I will say most Americans in their lifetime are going to need some form of LPC of long term care, okay. Now, statistically we look at, well, how many people could actually go on claim with their insurance, and statistically it's about 50%. It's like 52% of people will be able to trigger LTC policy to collect benefits. Now, what are these triggers? What is LTC insurance? If you need help with two out of those six activities of daily living that I said transferring toileting and bathing dressing, eating incontinence, or you need supervision due to a cognitive impairment, okay, and your expected need of care is to be more than 90 days, then you can trigger your policy. That's what's going to trigger a qualified long term care insurance policy. So that is, in essence, really the baseline of triggering a policy. But what does a policy do? Well, certainly it's going to provide money, right? It's going to provide funds to be able to pay for that care, really, so that your family doesn't have to. That is the key. We want to protect our family. And we want to protect our finances. So how can we do that? Well, if we have money, a designated bucket of money to be able to pay for care, hire professionals that are trained to do this. Now maybe family is still involved to some capacity, but if you have regular care coming into your family doesn't have to do it full time. That's going to relieve burden. Okay, so that or the insurance is going to help fund that care. It's also probably going to have other benefits included things like care coordination. That's one of my favorite things that LTC insurance has. Where basically you have a service you have a phone number to call to help coordinate services. So if you need home care if you need facility care, you're trying to get together a plan of care. This service is going to help you do that. So

Unknown 12:46
like a concierge, I mean, you rely on your family members to find all the solutions for what you might need the expert. Yeah, that's right.

Unknown 12:54
So your family doesn't have to go to Google to figure out okay, local homecare agencies and then looking at Angie's List and Google reviews and all these things. You like your insurance company, but you have a policy where they will have preferred like top notch providers in your area that are reputable and say, You know what, we recommend these agencies, I would recommend calling these agencies and getting together these details to relieve stress on your loved ones. And we even have some carriers that actually have like a concierge care coordination which basically means you have one point person, okay, so it's not just a team of people, you got one person that your family is talking to throughout the whole claim. So having to rehash that story is

Unknown 13:39
huge. I mean, because I know people even if you don't have chronic conditions, when you have to go repeat your story to one doctor over the other just to get a prescription and if you have a mean if there's a high, stressful situation, having to go through and repeat that would feel just

Unknown 13:54
it's exasperating crazy. Yeah. Oh, it is it's exhausting and exasperating and very stressful. So that's a really great benefit of having a policy and then other things like they provide respite care, probably home modifications, caregiver training. So many policies have these other benefits and services that come with your policy outside of just a bucket of money. So I would say most of my clients probably could actually self fund their care. Okay. If they were to have maybe a two year need of care, they probably could sell fun. They could use their own money to fund their care, but they're choosing a policy because of the leverage. Right? It's the idea of put you put $1 in you get a multiple of dollars back just like with home insurance, auto insurance, right? It's the same idea. You're putting a little end to get a lot out. And so the you're putting that in to get this leverage, but then you're also you're transferring the risk and the consequences really to the insurance company, right? That's that's what the insurance is supposed to do. And then you have these other services as well. So and I think the idea of even how much care could you possibly need, you know, I often get asked that question. Well, Kelly, like what's a typical LTC claim or what how much care do people actually write? Right? What should we expect? Because you

Unknown 15:18
still have these benefit periods. And I know one product has continuous and so it's always that question. Do I really need it for that long yet? People could be demented for 10 years. So yeah, what do you think about that?

Unknown 15:29
Yeah, so we we have carriers that provide benefit periods from two years all the way up to what you're calling relates? lifetime benefits is what we call it. So yes, if you have a small claim, you know, two year period and you just want to a little bit but you want meaningful coverage, we can do a two year benefit period, and then other another carrier will provide lifetime benefits. So all in between, typically, my clients that are looking at lifetime benefits are people that have cognitive issues in their family. So you know, dementia, Alzheimer's, Parkinson's, it's very real to them, and they're very concerned about that true catastrophic event. So they want that route that long period of time. But even you know, if we look at how much care do people need, it is all over the board. Amber, right. I mean,

Unknown 16:18
we're probably a little more simple. I would say I'm not one of those people. I I might need quite a few things. Just imagine if I had medical issues

Unknown 16:29
right? And you just I mean, that's what makes planning so challenging is we don't know we don't have the answer. If we did it would make planning so much easier if we had that magic eight ball to know. Okay, I'm gonna need care for two years and four months, right. Okay, perfect. I'm gonna get a policy or I'm going to, you know, have a separate bucket of money for that, but we don't know. So what we see is that most people are going to need some form of care, right? That could be three months. That could be 1015 years, right? It could be in between but typically, we're looking really at like three to five years of some form of care. Now, women are typically going to need more care and why why is that? Why do women need more care generally? Well, number one, we are generally the caregivers first. So we are typically taking care of our spouses, our partners, other loved ones, it could even be parents. Sure. And that has a significant toll on our health, physically, mentally, emotionally. there's really it takes a toll on us and I've seen this many times in my family. So it's very difficult. There's a huge caregiver burnout. So we see women often needing more care and for the anger,

Unknown 17:46
I thought you were going to lead with the fact that we live longer in trouble and we live longer. I think it's both first might come prior and their country. That's because I don't have the statistics. I'm sure you have it somewhere in your wheelhouse or even you might even remember, but it is there's a certain percentage that causes just chronic illnesses even down. Well, there's a statistic I remember learning from a nonprofit that even children can have chronic illnesses from the stress in a home so I can't even imagine what a caregiver could have. And so that's what I think we're talking about, is that

Unknown 18:19
exactly, yeah, yeah, there's the caregiver burnout. And so yeah, that's going to happen even before women need the care because they're caring for someone else and there's a takes a toll on on women. Now. Also women do typically live longer, and we typically have more chronic illnesses versus men are more likely to have those acute issues. So maybe it's a heart attack or something like that. So that's more to versus women you know, maybe overtime just simply as we age, we are having mobility issues. We are slowing down our bodies are more fragile, and we're not as strong and we're moving more slowly. And so that takes its toll. So typically we are seeing seeing women on claim longer and more often than men. So what is that even even when we're looking at rates of long term care insurance, you know, what does that do to rates? Well, the insurance companies, they know this, they know this data, right that women are on claim longer and they go on. Generally it can even be more catastrophic. So rates are higher for women, you pay more in our insurance premiums than men do. So that is you know, another reason to consider this when you're younger, and when you're healthier, because it's going to be less expensive and you're going to have more options.

Unknown 19:46
Okay, so I think with your your initial just meeting with people, you have a husband and wife, I think men might have a different mental picture of how this would look than the female given everything you just said is it hard to get spouses and partners on the same page? Because it is a different story. Men might say, I have life insurance. I'm good. We're a female say, look, I want you on my plan. We got to do this together. Right, but I need more. You know, we need to build this out for the possibility of meeting more. Is that a real?

Unknown 20:22
Absolutely, yeah. I mean, women are typically the ones that are driving this conversation that are pushing for the coverage because they might be the caregiver right now to a parent, or they've experienced it or they see their friends doing this. And they're thinking, oh my goodness, I'm more likely to need care and for longer. So we need protection. We need a plan. We need to talk about this and men, you know, women are thinking about the consequences. And men are like, Oh, it's not going to happen. We're going to be fine. You know, like I'm really good at

Unknown 20:57
saying no you know, hey,

Unknown 20:59
that's right. Or they're thinking, you know, oh, I'll just die in my sleep. I'll have that heart attack and then you're gonna have this bucket of money for my life insurance. And women. Women come into like, No honey, like no but seriously, but like, you know how I'm caring for my mom right now? Right? What happens

Unknown 21:16
to him because I think I've had that conversation a few years back.

Unknown 21:19
Right, right. And so yeah, so So really, we are approaching the conversation. There's really two different angles. It's one personal experience, and the other angle is longevity. So typically, the men might identify with longevity, you know, do you have family members that typically live a long life like can you see in your family? Do people live in their 80s and their 90s? And if they have that longevity, oh, yeah, my Well, my dad's 85, you know, okay, well, they can typically relate to that a little bit more. Whereas the women are looking at that personal experience. And they're thinking, Oh, my goodness, this is so hard. I don't want this to happen. I don't want to burden our kids, right. If both of us if both husband and wife need care, at that same time, who provide that right like our kids going to do that they're probably adult children with families, are they going to give up their jobs? Do they even live in the same city? How am I going to work? Right, right, exactly.

Unknown 22:23
I just the part of this is to take away the fear factor if we can do you and I and others that we work with do our job to just help people go and I think this is you've already said this at the very beginning. By the time we get to the point that we worked so hard to get to this period of time of being with our people and then just enjoying life. If one of us is now dealing with something like what with what you everything you're talking about, wouldn't you rather have the options to just be with your person? Right, but not work for them?

Unknown 22:58
Exactly. So and and the verbiage I use is Don't you want to be a companion and not really a caregiver? Yeah, right. Because you want to, you want to stay in that role as the spouse or the daughter or the son, instead of being okay, I'm the physical caregiver here. Right because when you do that, those roles you you are no longer just the spouse just the daughter and that was a significant there's significant significant stress there. And so if we can pay caregivers to do those mundane tasks, right, the getting dressed, the showering, the transferring the those bathroom, those bathroom issues, then your spouse, your kids, they can continue to be those roles and not and this might not caregiver.

Unknown 23:50
This might sound awful, but I mean, early in business, we talked about delegation being efficient. Yeah. Right. So why would we want that for our personal lives? That's right. If there's an issue. So yeah, that's

Unknown 24:01
exactly right. And so having a plan to figure out in a policy to figure out okay, well, you know what, I've got this bucket of money that's designated for LTC. And that is what we're going to use right I am guaranteed this amount of money at this point in time in in the future, to be able to hire professionals to come in to do this. So my wife doesn't have to do that, or my husband doesn't have to do my kids. And so that they can, we can really keep our relationship intact and help right. Let's talk about the different components of a long term care insurance policy contract and what that actually looks like. So when people are considering coverage, what are the main things that they're going to be looking at the first thing is benefit amount, how much coverage do I want on a daily or monthly basis? Okay, and so that's typically going to be $2,000 all the way it could even be up to $15,000 per month that you can have coverage for and then the second component is going to be benefit period. How long do I want benefits to last from two years all the way up to lifetime benefits? You know how much coverage is going to be meaningful to me and I think this is often sometimes difficult for people to really to choose. And so when we're looking at that, what I generally start out with is first we look at you know, family history, do you have family history of people needing care, what does care cost in the area that you want to retire in? Right might live in Columbus, but maybe you want to retire in Arizona and be near and write you out? That's right. You want to you want to have some warmth, so looking at cost of care in the area that you think that you're going to retire in is really important

Unknown 25:46
and a good part enough to know how much money do I want when I retire? Right? So you have to do a little bit of research to see location and the cost, generally speaking, and then I know you're gonna get to the rising cost eventually. So we have to kind of look at that and build that out correctly.

Unknown 26:04
Right. So those are the first two components benefit amount and benefit period. The third is, is inflation. So this is going to help you increase your benefits over time, your monthly or daily benefit as well as your total bucket of money. And so especially if people are younger, if you're under 70 years old, you need to consider inflation protection, right? Or if you're around 70 You need to consider a higher monthly benefit without inflation protection. So it really depends on what the premium ends up being but it's it's we want growth in our policy, you know when we're doing it at a younger age, because cost of care goes up. It's just incredible. And especially with COVID These last couple of years, it's astonishing, the amount that care has increased due to you know, lack of labor and so many shortages. So right so we've definitely seen a big increase in care costs over the last couple of years but generally I mean, we could look at between three and 5%. That care costs increase year over year. So most of my clients that are under 70 are looking at inflation protection. So what this is going to do generally we generally look at like a 3% compound inflation protection writer so every month, you know every year I'm sorry, and every overtime your policy is growing, to keep up the cost of care yeah to keeping up with the cost of care. So that's the third component that's really important.

Unknown 27:30
Kelly does that kick in immediately when you initiate the contract when you fund it? Is that going to start cooking inside the contract? Yes. So stay was some of us some of the audience listeners might have already worked with us on the disability side of things and that inflation rider works a little differently. So what's interesting is we don't always sell cola cost of living adjustment on disability contracts. A lot of times we do, but it just depends on variables. Sure, but it's rare to say I think that we would say go without it on a long term care policy typically, because of all those factors,

Unknown 28:05
right? Yeah, we definitely want to consider inflation protection on an LTC policy because cost of care continues to go up. And it's really important thing to consider. So the fourth thing to consider a component in a policy is the elimination period. This is the amount of time that you are going to self fund your care costs before your benefits begin. Now typically we see a 90 day elimination period that's pretty standard. Sometimes we see a zero day homecare waiting period. So that means you're getting benefits right away at home. Now if you then move to a facility, it's going to be 90 days but usually if you're receiving care at home for at least 90 days that will actually credit towards your facility. elimination period, which is nice, nice, very nice because the carriers are recognizing that people want to receive care at home. That's the number one place people are receiving care and want to receive care. So they are creating flexibility and many of these policies to be able to do that. Now that's not always the case. Sometimes it's just a standard like this is what it is. And I think two other things to consider too with the elimination period is carriers can do it a couple of different ways. So they will look at an elimination period based on calendar days, or service days. Okay, like business days you're saying right so the calendar day that is going to be the quickest, most really preferred way to have an elimination period counted because they are literally looking at every single day that the after you've qualified and triggered your policy every day that passes will count towards your elimination period. You don't have to receive care. Every single one of those days is every calendar day, okay? Versus a service day elimination period. They're only looking at days that you're receiving care. Okay, so if you're receiving care three days a week, it's going to take longer to fulfill your elimination period. Okay. And then we have a carrier that will actually do almost basically if you receive care one day a week, they're actually going to count it towards a full seven days. So carriers differ and how they do that, but it is important to consider when you're looking at policies, how does my insurance carrier How does my policy count the elimination period? You know, what inflation options do I have? What's my benefit period? And how long? How much do I have per day or per month? Those are the four big things.

Unknown 30:25
So as you talk about days, it makes me think of things that I know about lightly about Medicare days, and we'll talk about that a little bit.

Unknown 30:33
Yeah, so common misconception about LTC is that Medicare covers long term care. It does not Medicare is not intended to cover long term care extended care services. That's not what Medicare is for. Medicare is intended to cover acute medical issues. Now when do they kind of overlap? Why do people think this? It's because it will do it on a short term basis. Okay, when you need skilled care. Now, it will sometimes provide custodial care if you also need skilled professional care okay. So what Medicare will do is they will say we will cover the first 20 days in a skilled facility. After 20 days, there is a copay and you will pay that copay. But once you get today 101 So first 100 days, there's some coverage you get today 101. No coverage, okay, and that's skilled professional care. This is not in formal custodial, non medical care. These are different things. Okay, let's,

Unknown 31:43
let's break that down. skilled care, where am I going?

Unknown 31:46
Yes. So typically, skilled care is going to be received in a skilled facility, so a nursing home, possibly a rehab facility. So these are places where you have professionals, like nurses that are providing this care on a day in, day out basis, you might be receiving physical therapy, occupational therapy, speech therapy, those types of things along with maybe you need custodial care with activities of daily living like transferring toileting, you know, bathing, dressing, eating incontinence, but skilled care is really going to be professional. More medical care. Now, the non medical custodial care. That's really what most Long Term Care is held throughout the day. Those activities of daily living or supervision due to a cognitive impairment so

Unknown 32:39
you're in your home, usually.

Unknown 32:42
Right, right. Typically people when you have when you're receiving Long Term Care, typically people are in your home. Now we do have people in in nursing homes now oftentimes, those are people that are on Medicaid, which is different from Medicare. Okay, Medicaid. Is a government program for those that have low income, low assets and their suspend down. That's a whole nother episode. But yeah, those are basically the poor that that, you know, they don't have any more money to pay for their care, and they are receiving care in a nursing home. Okay. Different. Most people are not receiving care in a nursing home. Most of my clients and future they will receive care wherever they want, whether that's at home, maybe it's in an assisted living. We have a lot of really nice assisted living facilities. Now. I've heard some people say yeah, it's kind of like going back to college. And you know, I've got my roommates down the hall and I've got community and socialization with assisted care.

Unknown 33:41
Let's not confuse that because there's not nurses walking around taking care of everybody all the time, like a skilled care facility, right. So

Unknown 33:49
assisted living is going to be it's another place where you can receive care. There's not as much hands on assistance, as you would have in a nursing home. Yes, you do have nurses, you have AIDS, a lot of aides are in assisted living facilities to help with activities of daily living and help help with grooming and showering all those things, but typically you're not having as much hands on assistance in an assisted living facility. Now, I've seen people have or be in an assisted living facility and they even end up bringing in more care. So some homecare agencies will even go into assisted livings to provide more round the clock care if the assisted living facility doesn't have enough staff. We've really seen that during COVID where they have been short staffed and the in the care recipient needs more care than they can provide. And so the families will pay someone to come in to provide additional health additional care so they're getting the care that they actually need. So, but again, most people are receiving care in their home that's preferred. But then sometimes, you know, in the care continuum, you may need more help. And you may actually prefer that because often we see older adults get lonely especially if you're if you're at home by yourself. Yeah, it's one thing if you're still at home and you have a spouse, it's another thing if you're a home and you just have a homecare provider, you know if they're not there 24/7 And you don't have people coming in and out all the time, friends and family. It can get really lonely and depressing. And we see this so sometimes people have family so my grandfather, yeah, and sometimes it makes a lot of sense to you know what, like this happened with my mom. I was like she was we saw serious signs of depression in her and so she was right she was happier in the assisted living. I mean, did she miss her home? Absolutely. Like she talked about wanting to go back but she had an immunity. I

Unknown 35:49
think I think when you can have that. You still feel in control when you're losing control sometimes and it's out you know, it's not your fault, right. So the Medicare though back to that, when you're talking about assisted living, that's not what we're talking about. So there's this conception, but when you plan you can decide where you want to be.

Unknown 36:10
That's right. That's right. You're staying in control of your care options when you're planning for extended care. You're choosing and when you have a policy then the insurance company doesn't say you have to receive care in this facility. No, you know, that's the idea is you are receiving care where you want and then your benefits are going to pay out wherever you choose to receive care. And I think another important thing to talk about is how are benefits paid out? And really there are two there are two ways benefits can be paid out. Good one. The first way benefits can be paid out is cash indemnity. So let's say your monthly benefit is $5,000 a month and that's the coverage that you have at that point in time. Okay, maybe you've had some growth in the policy, or maybe you know, in 10 years will be 10,000 Whatever the case may be, that carrier will pay out that monthly benefit. Just send you a check. You can do whatever you want with that check. Okay, it's cash. So you can pay an informal caregiver you can pay a spouse you can pay a family member a friend, a neighbor, a homecare agency, whoever you want to be able to provide that care, okay? It's just a check. You use it how you want versus reimbursement, which is the more common way that policies are paid out. And that is when the insurance company will say okay, your benefits are $5,000 a month, but your care costs are actually $7,000 a month. We're only paying you for your for your monthly benefit your full multi vendor a five, so they are going to reimburse you you're going to pay for those care costs up front and you will submit invoices or receipts and the insurance company will reimburse you for that up to your monthly benefit up to that $5,000 or whatever your monthly benefit or daily benefit is okay. So you cannot pay and formal caregivers with a reimbursement policy has to be a professional so it has to be homecare professional service or a facility. Now, some people get a little like, oh well I want cash right because cash is king I have flexibility. Well, one important thing to consider with reimbursement Yes, you cannot pay informal caregivers. But oftentimes, homecare agencies and facilities will do what's called an assignment of benefits. So you will sign a form that basically says we authorize the homecare agency or the facility to do this on our behalf. So your family doesn't have to actually submit the receipts. They're just working directly with the homecare agency or facility.

Unknown 38:42
Yeah. So I want to pause there because that I think is huge. And I want to also talk about giving family members or kind of setting family members aside from these choices. So back to this there's less bookkeeping, so cash is king, but you have to do the bookkeeping credits right? That's right, and they're out

Unknown 39:01
there extra like when don't want to do that. That's right. And there are extra IRS forms that need to be filled out about like your CPA definitely is going to need to be very involved here. So it seems very easy and definitely the option to be able to pay informal caregivers. is amazing. But there are there are other things that do need to happen along the way versus reimbursement. Of course, like there is you know, IRS forms to fill out for that. But you know, it's it's a little less time consuming on the back end because you've got you know, a checks and balances and you've got the insurance company double checking that this is legit, right? Like you need to say 30 hours a week but the air the agency is trying to charge you 40 Ooh, they're gonna say, oh, wait a minute. No, this isn't right. Like you're auditing your plan of care says 30 hours and they're charging you 40 hours. So something's not right here. So there is an extra checks of checks and balances there. But then also, you know, it's important to ask whatever agency homecare agency or facility you're working with, you know, can we do an assignment of benefits? That's an important question to ask to see if they're able to do that. Not all well, but it is something to consider when you're looking at agencies and facilities and you have a policy.

Unknown 40:19
I think the beauty sometimes with these policies is that you when you fill this in advance, just like your estate plan or the wills and trusts it's taking it off the plate of the child, even if your children love you, and they would probably be there when you can put a kind of a barrier between decision making. There's other children on your children's side there's spouses, there's other family members that tend to get interesting will say when money is on the table and when there's so many things going on. So if we can just put a like a like invisible barrier around any of these other potential drama that you would never think would happen. Things can happen. People cannot be had different your children have different marriages. Illnesses over their addiction, all these things that can pop up. This keeps it out the noise away from your care.

Unknown 41:13
It really does. Oh my gosh, absolutely. And definitely when when families when a husband and wife, individual whoever it is when when you have a policy, okay, this has given you permission to receive care and quality care. If you don't have a policy and you're self funding your care. Okay, who is doing that on your behalf because most likely you're not going to be capable of doing that is a is it an adult child? How many kids do you have what what spouses are involved in this process, too? There are a lot of eyes on that checkbook. Let me tell you lots of eyes, right? Especially when they're considering the estate. How much are the kids expecting at your passing? And if you're if they're having to write checks, are they going to be a little stingy in maybe choosing the homecare agency or choosing the facility and say, well, this agency over here is only charging X amount when the other agency is charging $5 more per hour. When in reality you really want and deserve that that better care but you have lots of eyes on that checkbook. And when you have it, yeah. And when you have a policy, it's like no, like the insurance company is paying for it right now. There might be extra charges, right? Right. This is what we need. This is where things are going. They can't kick start counting things. And it's awful to think our family would never do that. But you know, I know we have those stories complicated can happen. It gets complicated. There's so many emotions involved like when there's an extended care situation. It's so hard to remain indifferent and to remain just really logical. Because it's so emotional. It really is because you know, you've got a loved one that needs care. You do want the best for them most most often your family members do what's in your best interest, but especially if this is like a really long term situation. Maybe it's five plus years. And that checkbook that those accounts are dwindling, you know quickly. It's Oh my goodness, what are we going to do? Right? We have to we have to cut corners. Yeah, we have

Unknown 43:24
to cut crumbs, because that inflation writer is not there. There's other things that are not there and so and they're crooked, I mean the last few years, you don't know what the economy's going to do. We don't know. So take, take the UN I think you talk about risk and consequences with your clients and they take the risk off the table by looking at it from you know, before thinking about it.

Unknown 43:45
Yeah, absolutely. Let's reduce that. Let's reduce the risk, reduce the consequences, transfer that to the insurance company, come up with a plan of how we're going to pay for it, who's gonna provide it Where do I want to receive care, talk to your family about it. You know, talk to your spouse about it. Talk to your adult kids about it they they deserve to be to be in the know, you know, like, you're absolutely you're gonna make the decisions as the parents of this but ultimately, but you need to include your kids because if you expect your kids to provide the care, but they have no idea what kind of put them in Exactly exactly. Like, are they logistically going to be able to do this? Do they want to can they physically? Do they have a family of their own? Do they have kids, they've got sports, they've got school, they've got jobs. It's probably unrealistic to expect that out of your adult kids. So having these conversations up front while you're cognitively aware and good how to make the right decision to do it. Love anyone anyone loves you. I

Unknown 44:51
always say you know, that's where this planning if you have you have to do this for the Pete your people and for yourself who and so maybe we could wrap up with talking about when is the right time because we've most people deviate towards elderly people need this. I want to start the conversation earlier because it could be for your own care. But it also could be is the are the children and the parents talking and educating themselves on do we need to buy something for the children or vice versa with the whole sandwich generation? Right? The conversation is to start earlier do not and not to be scared of that.

Unknown 45:29
No Right? Don't don't run from it. Don't you know hide from having conversations early. And plan early. So what does it early even look like? I mean, I have coffee and really 40 all the way up to 70s. Yeah, okay. All in between. Now, the ones that are planning early, you know, maybe they're 40 early 40s They have a lot of options available leave a lot of policy options available because typically, they're healthy. And just because they're younger, they have they have a lot of options and it's going to be less expensive. Okay, versus you wait until you're older. Typically we tend to have more medications. or more chronic issues that start to pop up as we get older in our 50s and our 60s and even definitely in our 70s Right. That's that's pretty common. So the older you are, the more expensive it's going to be and the less options you have. But even having these conversations maybe at 40 You're not ready, but you can start having a conversation, right? You can talk to your spouse, you can even talk to your parents about this and see if they have a plan. Hey, Mom and Dad. You know, this is really important to me. I think it's really important to our family. I think we need to talk about this like Do you have a plan for extended care if so, what does that look like? If they don't? Well, let's talk about it. Okay. But oftentimes my younger clients Amber, like even in their 30s and 40s. They are looking at coverage where at that point in time, typically their main priority is life insurance. Okay, it's not typically LTC at that point. So what they're looking at is life insurance with a long term care rider. And what that really means is you've got a death benefit and you're able to use accelerate a portion of that death benefit per month, two to 4%. And generally, if you need extended care, okay, if you need help with activities of daily living, so, but that main priority is life insurance, there's no extension of benefits. There's no information protection, it's really life insurance that you're able to access. Okay, if you need extended care,

Unknown 47:35
yeah. And so we're not sure but with certain legislation, some of the underwritten LTC riders are potentially a solution that you can use for some of the rules that are coming our way in different states. The other thing is, is a nice affordable writer usually to just add on to that life insurance you just covering your bases, right while you kind of figure out alright, do I want something more complex to cover? All these things we talked about for this last episode? It's a good stopgap to have right.

Unknown 48:07
It is it is and I think, I think also to the I think it's important for people to know these are permanent life policies with long term care writers. These are not term policies. With long term care rider. So these are permanent policies that will last your entire lifetime. But you've got a rider on there for extended care, okay. Once my clients typically get in their 50s, that's when the LTC is more of a concern. Okay, that sandwich generation right they might still maybe they have high school kids, college kids, still on payroll, and maybe table from

Unknown 48:41
a younger and then the alternative, and maybe

Unknown 48:46
that's right, maybe they're providing care for parents and so they know that this is a very, very real thing. And they're ready to start planning. Okay. 50s is really the typical time for most of my clients. And then I have clients that have retired, they might be in their 60s or early, even early 70s. And they they just hadn't planned yet. And so then we're looking at options, what's available. We'll look at a traditional long term care insurance policy where it's like pure insurance, where it's like your home or auto, you know, there's no added benefit. If you don't use it, it's simply it's really oftentimes the most bang for your buck as far as coverage. And then we're or we'll look at a hybrid policy where you are combining that pure insurance long term care with an added benefit and that's going to be a death benefit from a life insurance policy or cash value from an annuity and there's an extension of benefits with inflation protection. So lots of options, but the timing matters. Yeah, we have

Unknown 49:41
so many things now. So it's really if you start the conversation early, look at where you are and like with an independent brokerage, we can find certain things for you and really build that out. And then you just have the coverage that you need as you transition as you grow up. And as your dependents might change. You never know what could happen. So always checking in with your team and looking at what's out there and what do we need as your life evolves? So,

Unknown 50:06
right, yes, lots of options. And it's really important to work with an independent agent, you know, someone that specializes in long term care planning because it is so complex, it really, it's like it's like a whole nother beast and so having someone that has lots of options, not just one carrier, lots of options, understand the industry understands, you know, what's out there and a comprehensive planning approach. You want

Unknown 50:33
to customize it based upon your interests and not just this, like the cookie cutter one carrier option, right? I agree with that. Right? Obviously, we would being independent ourselves, right? Um, so as we wrap this up, I will link up information so people can find you. Is there anything else you'd want to say to close this off to say, here's what you can do today, just to kind of give a takeaway?

Unknown 50:58
Yeah. So I think to recap plan now to live well, I mean, that's really the takeaway, right? Don't put this off until you need the care because it's gonna be really too late at that point. So plan early so that you can stay in control of your care options and make good decisions for yourself and for your family, for your family and your finances both so that I think that's a key takeaway. If you want to learn more, I do have a podcast steadfast care planning and so I've ever

Unknown 51:27
read that Kelly. So yes, this just launched and we are excited right strictly

Unknown 51:32
launched November. First. And so my goal is to have conversations with professionals all along the continuum of extended care. So we're covering up

Unknown 51:44
to about that. Definitely. I'll link up your podcast. Let's do that.

Unknown 51:48
Yeah. And then our website said best agents.com So Thanks, Amber.

Unknown 51:52
Okay, Kelly, thank you so much. For being here. I'm so happy you're out there helping people with this. And it's important because we might feel overwhelmed, informed and overwhelmed. Let's, we have teams out there to help you guys. So thanks so much for being here. And thanks to the listeners. Have a great day.

Unknown 52:09