By Kenneth Schulman, CLTC
The impact of long-term illnesses and the
stresses they place on families is difficult to
measure in the workplace, but studies in recent
years have also shown that U.S. employers lose
significant dollars in productivity each year in
tardiness, absenteeism and “presenteeism,” when
employees show up for work but are too distracted by
the responsibilities and issues of caring for a sick
family member to perform well.
Overcoming the Myths
A large part of my role when meeting with
families is to help them understand the important
role families and long-term care insurance can play
in a parent or loved one’s future. For every truth
associated with long-term care insurance, there are
10 myths. Here are some of the top myths that should
be addressed in long-term care planning:
Most people can pay for their own care
Many people think they can liquidate taxable or
tax-deferred assets, including retirement plans or
annuities, to pay for long-term care costs. The buzz
surrounding reverse mortgages has also given
momentum to the concept of paying for care instead
of having a policy. As with all financial decisions,
you should first consult a trusted financial
professional and a tax advisor to determine the tax
implications and the recommended sequence for
liquidation before doing so.
Long-term care insurance is only for
nursing home care
When most people think of long-term care, they
think of nursing homes. However, over 80 percent of
persons receiving long-term care are in home- and
community-based settings, not in nursing homes,
according to “Long-Term Care: An Overview.”
(Testimony before Senate Committee on Finance, March
27, 2001, statement of Carol O’Shaughnessy,
Specialist in Social Legislation, Congressional
Research Service.)
All long-term care insurance is the same
Actually, many policies offer various options,
and all policies are not created equally. When
making a direct comparison from one policy to
another, keep in mind that five key elements of any
policy contribute to price and quality: the
financial strength of the company underwriting the
policy, the daily benefit, benefit period,
deductible, and inflation protection:
- Financial Strength Ratings: Be sure to
weigh the reputation and financial strength of a
company in the decision-making process, so
families have a sense of confidence, as high
ratings are an indication that the insurance
company will be able to pay any future claims
against the obligations they have outstanding.
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