Broker Check


February 03, 2023

In a nutshell:

  • According to reports, two-thirds of women will need Long Term Care Insurance, and millions of men will need it as well.
  • Asset based Long Term Care, for those people with a cash savings account for a “rainy day,” provides a life insurance payment if it’s never used for assisted living.
  • While it may seem like a smart choice to wait to purchase insurance, you may be surprised when you find out you are no longer eligible and are required to spend down your assets to $2,000 to get help from the government.

Like everyone else, I never wanted to be Insurance Rich and Cash Poor!  Basically, that means I didn’t want to spend every penny I had to get as much insurance as I could afford.  I knew you have to eat, have shelter, pay for transportation, take care of the basics for yourself and family, etc.

Now, don’t think I’m an insurance pauper.  I have four life insurance policies (including work), three health insurances (Medicare, a supplement, and Plan D), auto, home, identity-theft, business liability, a tax preparation bond, property and casualty errors and omissions insurance (E&O insurance as an auto and home agent), investment E&O insurance as an investment advisor, and I am sure I have more small policies offered by banks and credit cards, tax audit protection, etc.

This time, the reason I wanted more insurance was that I truly believed what I had been telling people for a long time about the value of Long Term Care Insurance.  I purchased it for my mother when she was 73.  You may have heard my story that she paid about $15,000 in premiums over about seven years and received $118,000 in benefits over eight years to pay for a professional to come into the home to help her when it was discovered she had dementia due to TIAs. While this example regarding premium payments and benefits paid out will be different for every policy and client, I’ve always thought it was a pretty good return on her money! **

In my 50’s and early 60’s I wanted to gamble a little, because I never had any major health issues, except a few kidney stones. No doctor had ever warned me to take any medication, so I didn’t.  In fact, I decided not to worry myself poor by paying the insurance companies needless premiums too soon.  That seemed like a great idea back then. 

A little over three years ago I took the “23 and Me” health/DNA test.  It was fascinating to see where my genealogical lineage was really from.  It was in these reports that the DNA results showed all sorts of genetically collected information over the millennia.  The number one gene in my body was intriguing.   Simply put, my body likes to make excess cholesterol.  I remember seeing the report and telling my wife that when we have the time, I should see the doctor and check into this.

That was just a couple of weeks before we went to the mile-high city to visit my daughter, son-in-law and their brand-new baby.  The two of us enjoyed a few days vigorously hiking through the snow in the high Rockies, while the little sweetie’s other grandma visited.  The night we returned to their home, I had a heart attack. Over the next three days, I had five blocked arteries made "like-new" again with five stents in one operation.  I remember the doctors and nurses remarking to me what a strong heart I had, just a lot of clogs.

During the past three years I’ve been trying to eat right, walking a mile a day, lifting weights, and staying active.  My great cardiologist has me on a couple of medications that keep my cholesterol at a poster-boy level.  To this day I really feel good.  In fact, my uncle had a stent put in when he was my age and lived a very active life till 94.  I feel great!  I still hope to surpass his age.

So recently, the insurance agent and investment advisor in me thought, “Where is a great place to put my money to use it for long term care needs, or if I didn’t need it, to pass it along to my family?”  

I chose one life company that offers asset based long term care insurance, and I gave them a brief review of my health and they quickly came back with an unequivocal “No.”  No discussion.  They don’t like stents.

I couldn’t accept the “no”, because remember, I feel great!  I figured they just didn’t realize that I’m going to live for a long time.  Every family member that has been treated has done very well.

So, in the last couple of months, I have contacted a number of companies who have turned me down.  The answer in every case was “no” as they consider me to be an uninsurable risk.  I’m still searching for a company that will take me, but it doesn’t look good.

This is what I know:

  • 70 out of 100 people who turn 65 years of age will need Long Term Care Insurance.
  • Women will need Long Term Care longer than men, about a year on the average.
  • Nearly 41% of people under 65 years of age will need long term care for illness, injuries, accidents, or disabilities.
  • 100 out of 100 people will die. If they wanted to pass along assets without creditors, and without income tax, it would have been wise to have some type of Life Insurance.

I have personally come to know – too late – that you need to purchase the policy when you can, rather than waiting for some future date, for the “right time”.  

You don’t want to be an “Uninsurable Risk.” Whatever it’s for.

“An uninsurable risk is a risk that insurance companies cannot insure (or are reluctant to insure) no matter how much you pay….  When the probability of loss is too high or the claims costs are too high on a particular risk, the insurance company may consider it uninsurable and exclude it from the policy.”

Remember, most asset based Long Term Care and Life Insurances are never “too expensive”!  Whatever amount you pay into these plans will always result in your family being able to receive a sizeable benefit when you need it, or at least you or your family will receive a substantial amount of money if you live for a long time.  I do not know of anyone who paid more than what they or their family received.

Learn from my personal experience.  Don’t let your fear or greed get in the way because it may not end up the way you expected.  While it may seem like a smart choice to wait to purchase insurance, you may be surprised when you find out you are no longer eligible and are required to spend down your assets to $2,000 to get help from the government.

Finally, while I have your attention, Life Insurance companies are notorious for taking their time approving an application.  The reason is partly because they don’t want to be pushed into insuring someone who may be a high risk, anxious to get their policy “as soon as possible”. 

If you’ve ever thought about asset based Long Term Care built on a Life Insurance chassis, contact one of us at United Financial Center, LLC in Tucson.  I truly believe you and your family will be much better off in the long run.

**The example presented regarding insurance premium payments and benefits paid will not necessarily be representative of the experience of any other client.  All insurance guarantees are based on the financial strength and claims paying ability of the issuing insurance company.