Solutions to Long-Term Care Costs (with transcript)
Marc Glickman is CEO and founder of www.buddyins.com, a community of long term care planning experts. Marc is also an Actuary by profession and a licensed insurance agent. His mission is to help families across the country get a Long-term care plan and to help to support the 44 million caregivers in the United States.
Frank: Welcome to Boomers Today. I'm your host, Frank Samson, and of course, each week we bring you important and useful information on issues facing Baby Boomers, their parents and other loved ones. Today our guest is Marc Glickman. Marc is a CEO and founder of www.buddyins.com. It's a community of long-term care planning experts. Marc is also an actuary by profession and a licensed insurance agent. His mission is to help families across the country get a long-term care plan and help to support the 44 million caregivers in the United States. Marc, thanks so much for joining us on Boomers Today. I appreciate it.
Marc Glickman: Thanks for having me on, Frank.
Frank: It's such an important subject. I know that we've had guests on the show that in the past on this subject matter, but we can talk about it enough. That's how important it is. The first question is pretty basic, and I'm going to ask it because as we deal with families all the time on various issues, and sometimes there's this perception out there that, "Oh, doesn't Medicare pay for my dad's long-term care? Or how do we get on Medicaid to get that paid?" We ask the question about long-term care insurance. Sometimes there's puzzled looks that we get. Talk to us more about really what is long-term care insurance, and what types of benefits does it bring?
Marc: Yeah, great question. It's probably the number one question we get, doesn't my Medicare cover this? The answer is Medicare is health insurance, and long-term care is covered by Medicaid, but only after you spend down all your assets. The idea is at some point in your lives, you suffer from needing help with the normal activities of daily living. It could be dressing yourself, it can be bathing, things like that, and usually it happens more towards the end of your life, maybe in 80s, 90s, or looking into the future as people live longer, into your 100s.
But at that point in time, that type of care can be either very expensive or it could require your family to have to come in and take care of you. Long-term care insurance is a funding mechanism that allows you to save over time, and if an extended health eent happens, like let's say you've got Alzheimer's disease and you need care for 10 years, the insurance is there to kick in to pay for that and allow you to protect your assets.
Frank: What's some of the biggest excuses that you get from people of why they don't buy long-term care? What are some of the things you hear or excuses of why people don't look at this more serious?
Marc: The number one reason, as you pointed out, is people think it's too expensive, and that's because the cost of care is expensive. But the way that I think about insurance is a little differently. It's really a leverage vehicle, and the objective of long-term care insurance agents is to figure out how do we take your budget and stretch it so you can get the most information and access that you need?
Frank: All right. Last I checked, there's still 100% chance that we're all going to die. Okay? Unless some things change on the news today that I didn't see. And I read a while ago that once you turn 70 there is a high chance that you're going to need some sort of long-term care assistance. Are you familiar with any statistic like that or have you heard it?
Marc: Yeah as you mentioned, I'm an actuary, and what an actuary does is calculate the statistics for the insurance companies so we can help price the policies and decide how much the insurance company needs to hold to pay the ultimate claims for the customers.
The one thing we're really trying to avoid with long-term care is to avoid leaning on your kids to provide for you long-term. It’s a mistake to assume that your kids can provide you with the resources you need later in life. That’s also a primary motivation for people to get life insurance policies – they don’t want their kids to have to take care of them when they’re older.
Frank: It also makes sense to get a life insurance policy and combine it with long-term care insurance. When maybe a younger couple has kids, you want to have life insurance should anything happen as they grow up. But then as you age, and the kids are now on their own, you need an insurance policy that can convert over into a long-term care policy. Again, I might've botched it up a little bit, but can you explain how that works?
Marc: What's happened is that as the market has evolved for long-term care insurance, the insurance companies have come out with some innovations. So not only do they have what they call the traditional long-term care policies where you pay an amount of money and then you try to get as much long-term care benefits as possible, they now have, like you described, life insurance combination products which provide long-term care should you run out of that death benefit.
They're accelerating the death benefit and allowing you to use it as what they call a living benefit. While you're living, you can use it for long-term care needs, and then they provide an additional amount of coverage in many cases beyond that. There are even annuity products with long-term care benefits attached to them to provide maybe two or three times what the annuity value would be if you need long-term care. There are even products designed for people that may not help qualify that they call short term care.
These are only available in about 40 states or so, but there’s a variety out there, which are essentially tools in the toolkit that your long-term care insurance specialists can use for you after they do a consultation to figure out exactly what your needs are and what your budget is and what your health looks like.
Frank: I'm sure that this depends on your health, people could get long-term care insurance at any age, but is there a age group that you think would be very wise for them to seriously look at it?
Marc: Yeah, I would say between ages 40 and 80. It's a wide range, but that’s when most people buy it. The sooner you buy it, the better off you are. The number one reason for that is that your health actually enables you to qualify for the best plans, which equates to the most leverage for your dollar and allows you to fund that over time as well and accumulate a lot more benefits.
But it's never too late to plan, and I would say in my opinion, it's never too early to plan as long as you have your other retirement plans set up as well, again because you need to be able to afford to have even a basic level of coverage, and you can do that by starting off at a lower premium. Even if you're in, let's say your 40s or in your 30s thirties, I've seen people start their plans.
Frank: You mentioned premiums. I know this is a loaded question and I'm sure you'd start out the answers saying, "Well, it depends." But with long-term care insurance costs, is there any way to give our listeners and they give me an idea?
Marc: Yeah. Most agents would say it depends. I give people a number. The reason I do that is I know all the industry averages for these things, and the average price that people pay for "traditional" long-term care, the first type that we talked about, is about $200 per month per person if you're in a married couple. That can be affordable for a lot of people. It's not as expensive as people perceive it to be.
If you're younger, you can actually start off plans that I've seen as little as $20 or $50 a month. As you get older, again, it tends to be a little bit higher because you have less time to accumulate what you're putting into that plan to get enough in terms of benefits. Just keep in mind that they cover a wide range of different scenarios. Some plans might only cover you for one year or two years, but there are also plans that have what are called lifetime unlimited benefits, which just never run out in terms of duration. So that's why it's hard to give people a quote, is because you could buy whatever it is you want and based on how much multiple you get on your premiums, you could get either a tremendous amount of benefits or just a foundational plan, is what I call it, that is going to help you self-fund it in the future.
Frank: Yeah. No, that's great. To me, I tell people this is a gift to your children. When my wife and I got long-term care insurance, I took the front page of the policy, made a copy of it, put it in an envelope and put a ribbon around it and gave it to my kids. Because it is a gift to your family because unless you really have planned a lot of money to pay for long-term care, it ends up falling on the family.
Marc: I have, and that's really what motivates me. You mentioned this, there's 44 million unpaid caregivers in the United States. Majority of them are the daughters that are taking care of their parents, which means that if you look around, in any room, one out of every six adults, maybe a caregiver today. All four of my grandparents needed long-term care.
Frank: Great. Now, can you tell us a little bit more about your website, buddyins.com?
Marc: Yeah, so the reason we call it BuddyIns is because it really involves the buddy system. I truly believe it takes a village to help people. We partner with other top long-term care insurance agents. We partner with Medicaid planning attorneys. If let's say you have a parent that's in the nursing home today, how do we help them navigate the Medicaid world and are there ways to protect the assets at that point? We partner with home health care agencies and facility placement agencies around the country.
Because we have this large network of providers of different types, we can help people with a variety of different needs. For example, I'm an expert in the business owner long-term care planning arena, which differs because there are tax advantages if you use your business to actually fund the long-term care insurance premium, in that it's treated like a business expense and you can deduct it through your business. I have other experts in our network that are experts in the medical underwriting.
If people have health issues, I can go to them and say which insurance company is going to be the best fit for this person with these health issues. So even within the long-term care insurance space, even though it may be a "niche," there are even sub-expertise is there that are very important to have. I partner with almost all of the top insurance specialist agents in the country on this BuddyIns project and this website.
Because at the end of the day, it's a very personal and customized type of planning process. It’s not a commodity, it's not a transaction.
Frank: Let's talk about that. Say you have somebody that contacts you -- what's the type of information they should be prepared to talk about? What are some of the questions you ask when you first meet or talk with somebody?
Marc: Yeah, great question. You may be surprised to hear this, but the very first question that a lot of people ask is, what's the reason why you're doing this? Is it due to somebody around you that's needed long-term care? Is it due to the fact that you may have had some type of health issue yourself and then became aware of all this? That motivation is a big driver of what direction you go down. The very probably next thing that's asked is about health. You have to do a very detailed health assessment.
Some handle people that have had prior cancers more favorably than other insurance companies. Knowing the client's health is going to help direct them towards which type of solution they're going to be eligible for. Then usually right after that involves the finances. What does your retirement plan look like? What is your income? What do your assets look like? Asking questions about, for example, to you on a business so we can identify maybe some potential tax advantages or do you have a health savings account?
You can actually fund long-term care insurance out of a health savings account, which surprises a lot of people. So there's just different ways to fund the plan, and based on all of those parameters, your long-term care insurance expert comes in and then say, "This is the right fitting product for you," and that's really how you know you're getting the right deal, is because the solution is based on exactly what your needs were that expressed to that person.
Frank: Right. That's great to know. I know that long-term care insurance continues to be a hot commodity as far as discussion goes, but there's been a lot of changes to it in recent years. Perhaps you could give us a brief history about long-term care and how it came to be?
Marc: Yeah, so in the late 80s and early 90s, as you pointed out, insurance companies raised the price of the products because they didn't have a lot of data to go by. They looked at some similar products in the market and the experience with those products, and let's apply that just as a starting point to the long-term care products. What they found out is that long-term care is actually held onto by clients much more often than other products.
These insurance companies assumed that maybe 3% of people each year would give up their policy and not use it. But it turned out that virtually everybody, 99.5% of people keep their policies every year. Because of that one factor alone, again, when you compound that over 30, 40, or 50 years, it leads to a big difference in what the open prices need to be. The good news is that products today are much more price stable, and that’s mostly due to price stabilization regulations that went into effect in the early 2000s. That's what's happening in the traditional long-term care space, and that's why we feel comfortable with those products that are sold today.
Frank: Right. As you know, we have a network of people around the country and we're literally in an automobile with them, showing them assisted living or meeting with them. It's a question that I certainly recommend to our advisors to ask the family members and ask them straight up, "Do you have any type of long-term care insurance?" So often we'll try to refer them to somebody like yourself, while reminding them that a conversation about long-term care doesn’t cost anything. Can you extrapolate on that some more?
Marc: Right. One of the mentalities of our network is we count success in terms of how many families we help. We love what we do because we know we're helping people. So absolutely, it's a partnership mentality. Some people have a financial advisor that they work with that manages their assets and their retirement. We partner with financial advisors around the country the same way. I have long-term care insurance agents that are expert in this that bring me onto calls, for example with business owners' situations that get more advanced.
Most of our experts are available online too. We're all licensed in different states, and we have to be licensed in your state to work with you. But once we have that licensing, we can hold virtual meetings with you to offer advice. That's one of the nice innovations today with the technology, is that you can get an expert from anywhere around the country to come in to a call pretty much at a moment's notice, and be able to work with you.
As you pointed out, the insurance companies build the cost of marketing into the products themselves. It's all covered by whatever product you buy usually, and there's no fee so to speak. For most consulting agents to do this is, it’s free. Again, you should take advantage of the fact that you can just window shop if you will, talk to them about it and find out if it's the right fit for you before deciding if you want to actually "purchase" something.
Frank: Got you. I could talk to you for quite a bit longer about this subject manner, but we've got about 30 seconds left here. So why don't you just share with our listeners how they could get ahold of you and any website they could go do anything at all.
Marc: Right. So www.buddyins, so B-U-D-D-Y-I-N-S, like insurance.com. If you search for that on the internet, you'll find our website. You can submit your information right on the homepage of the website by saying start your plan here, and we'll go ahead and reach out to you. We'll also match you up with a top insurance specialist. I'll be involved with your case, but I'll also have you work with somebody in our network that is fluent in all the different types of products and they can do a consultative type of approach. Again, if you do need any help, even beyond long-term care insurance so to speak, let us help you navigate a very complex planning process because you're not doing it alone. Okay? There are people out there that really care about you.
Frank: Great. Marc Glickman. Check it out buddyins.com. Thanks for joining us, marc. I really appreciate it.
Marc: Thanks for having me.
Frank: Yeah, and thank you everybody for joining us on Boomers Today. Be safe out there, and we'll talk to everybody soon.