Long Term Care, Disability Insurance, & Wills
So let's, talk about long term care insurance, probably a lot of your thinking, okay, let me get a cup of coffee, let me get my piece of chocolate and, you know, it's not the most riveting, exciting part of the conversation, but it is so important insurance, maybe I should have done insurance in hindsight, like first thing in the morning, we were all away in such so who needs long term care? Well, I will start by saying that on the whole, if you're a woman and you're forty years old, watching this, you should really sit up right now. This is for you, because I don't have the starts off the top my head. But women live longer than men, women make less money than men and women also take off on average, eleven years from the working world to take care of our children or parents so that's eleven years that they're not earning money and not putting money away into retirement. So let's, let me think about this equation. Women are going to live longer than men by, like seven or eight years, an...
d they're gonna have less money to live on, and I think like seventy percent of women in their seventies or eighties are alone because they're divorced or widowed or just a really, really large number. This is who needs long term care because on the whole women need someone to take care of them and it's really what I call the middle class insurance so long term care is an insurance if you're going to be in a nursing home or an assisted living center or if you're going to have home health care and so if you are healthy until your age ninety and never need any of that good for you. And so what long term care does that just offers you more flexibility and options and it's not a cheap insurance, which is such a bummer because I feel like everybody needs it, especially the middle class because if you think about it, the rich don't need it because they're going to have enough money to pay for a nursing home or assistant living or or home health care and if you're truly low income, you're gonna have medicaid, it will protect it will help you it's not going to give you the care maybe you want, but it will pay for it if you have no assets, the government will give you something for nursing home. Are you no medical care again? Not the way you want it, but it will give you that money it's the middle class if you have a little bit of assets if you've saved one hundred thousand dollars two hundred thousand dollars you don't fit into the system, you don't have enough money necessarily to take care of yourself if you really get sick, but you also have too much money to qualify for medicaid or something like that. So that's, who needs long term care? So if you are forty years old, I would definitely start shopping now and just getting some quotes e no, because aunt, I have worked with so many people who bought long term care, and they never bought it right away. So the first thing I would say just get the quote, see you much you to see how much you can afford because really, you probably should buy it by the time you're fifty sir, if you're in your forties, at least you can start shopping around. Let the price tag kind of sit in again it's, the middle class and it's, especially for women because they live longer than men. So it's like what we talked about before, do you want to take out there's? No student loans of retirement? So if you have children, do you want to be a burden on your children, your child, financially and physically? I no, I don't, and I'm dealing with aging parents now, so I know it's something that's really coming up, I don't know if anybody here has that and actually it's something that especially if you're young in your twenties and you're like, okay, I'm going to tune out now and not think about this this is a great conversation to have with your parents saying, do you have long term care? What are you doing coming by a policy? I mean, if they're close to sixty, seventy it's so expensive, so they might not be able to afford it. But then what do you doing about that? I don't know the exact numbers, but I mean a nursing home today, a good nursing home is like seven to ten thousand dollars a month. The average stay is only about three years, but do the math it's ten thousand a month for three years that's, you know, three, four hundred thousand dollars, so if you buy a policy for, say, two thousand three thousand, a year it's still cheaper, but I like about long term care, and I started shopping for policies were gonna shop tomorrow because I'm not forty, just kidding hive them there, but what I like about it is that if I don't want to live in a nursing home or if I really wantto live more the life that I want to leave and that's that's, what I put here is that it offers flexibility and options, so maybe I just I want to still stay in my house and I want to live where I want to live so I feel like a long term care could be just a better option for me about that so that's something that I'm looking at so get the quotes there's so many different ways to look at it and um you know, I I would say with long term care some of the things that you can really think about is like you could get a policy that maybe start three months or six months even after you start needing it but that'll reduce your premiums so there's what's called a waiting period so it's a little bit like health insurance or homeowners insurance if you increase your deductibles then the insurance premiums lower so you could do that with a long term care so say you're watching this and you're thinking I need it I really need I'm going to go get it I'm going to go spend the money then maybe say I'm going to get one that has a much longer waiting period and then I'll bring my premiums down or maybe I get one that doesn't have what's called cold a cost of living inflation adjustment so it'll just be a set price but at least that's something because I think the ones with kohler much more all right? My one big caveat with long term care and life insurance is make sure you go with a company that has a good reputation because nobody's bhai's life insurance for tomorrow right we buy life insurance for twenty years from now thirty years from now I hope that companies around so it's called the financial viability of the company you want to find that out that's really easy to find out by asking for the a m best rating of the company I'm just a wealth of knowledge I was amazed myself when I first I forgot about this one so this is just the a m best rating and it's like the morning star rating but it's like a plus b plus c plus it's a little bit like school so if you are looking at life insurance long term care insurance we're going to talk about disability insurance see what the ambassador rating is so you can really see the financial viability of the company because if something's really cheap like and that's why I also working with like I wouldn't go too just one agent who works for say state farm or new york life I'd go to an agent who sells a lot of different policies because you want to get quotes so a client came to me and she's like okay I got a quote from an amount thanks new york life for state farm aren't great cos they all are but she's like okay I got a quote from you know jon worth state farm northwestern you know companies like that and one was a lot cheaper and so I said, well why is that she she was like, why is that cheaper? And I'm like because the financial viability the company's a lot less like who knows if they're going to be around especially I mean this is where you want to go with brand names you want to go with a company that's been around for if you're ready to buy it and spend the money on the insurance I want someone who's been around for a hundred years who's dealt with market's going up and down and it's still there paying out policies, right? I mean that to me is like I don't want someone that I hope is around in twenty years and my family and I are depending on it so I might pay up a little bit for the quality in that sense that's just my own personal thing in terms of whether it's life insurance for long term care insurance. So you said when you're looking at mutual funds it's foreign five stars is what you look for is there a criteria? Is that a plus you want to go below b plus I can't say that I mean I think it's I think if you don't know the company and the policy looks really cheap, I'd ask the rating and I probably wouldn't go with anything below a b but there are lots of ways that you can save money on long term care insurance if it's something that you know, you really need it's like life insurance, maybe it's not enough to fully pay, but at least it'll help. And again, I think we're the for me personally where I really wanted to help is the day rain like I want someone to come to my house if I'm sick, so I don't have to leave my family or leave my home. That's when it's really important to me so maybe it only gives me one hundred dollars a day and I pay the rest of my pocket like right now today, I think having good home health care is like two hundred dollars a day. Good, I mean there's, obviously last but that's just in today's medical prices. So maybe I get a policy that pays fifty dollars a day towards that and that's all I can afford that something is better than not so that's. Why I get the quote now start talking to the agent now let it sink in. Learn on there's a great website l c t q dot net long term care quote so it's l l c t q dot net so what I like about it and you can get quotes on it, but it has a lot of articles on it too, so it has a lot of information because it's a learning process I mean, I'm not going to spend too much time teaching about long term care, but it is really good to just start learning about long term care and really start saying okay, I needed what is the day rate? Does it pay for an alzheimer's clinic so depressing talking on this? What is the waiting period is their cost of living does it if I moved to a different country if I moved to a different state like is, you know, just the limitation so actually what I'm working with my clients, I have a checklist, a long term care checklist question from ninety nine per center who wants to know why by long term care insurance in your fifties as opposed to later? Well, I don't think you can buy it later because you probably can't afford it gets so expensive. I think it's like once you hit fifty fifty five sixty goes up dramatically because they know that you know you're probably going to use it right? Because if you're in your sixties and you already see that your health is not vibrant and failing you still to do a physical again it's based on health it's the same thing any other questions? Yes cindy wonders if you have your rainy day and everything else all taken care of is it better to get a whole life policy versus and on retirement investment that's a good question you know it's hard to answer not knowing her story her situation but but if she feels comfortable about it and he's the life insurance do both yeah you do ten thousand in the non retirement investment and buy a whole life policy for hundred thousand to moderation over yeah I think it's l t c yes long term yes yes thank you. Okay, yeah thank you that's why I wrote it down yes oh it's a long term care quote dot net? Yeah that's from clear clear I'm not endorsing the website. I mean they sold insurance there that's not I don't get anything paid off of it. I don't even know if it's that good of a site I just know that they have really great articles and questions and so if you are starting to shop around, look around it's a great resource. I will say in new york there's a few women that I've met that sell long term care in my industry and in my like sort of networking community and they're so good like if I'm gonna buy from someone I want someone who only sells long term care insurance because they're really wealth of knowledge there is a last comment here so cindy had said on chat if you've no dependents though wouldn't you just stick with non retirement investment because I have no dependent yes then she should not my whole life I didn't realize she had no dependents yeah yeah but then leslie love says if you don't have life insurance how he's supposed to be buried well you've got savings and you have a well that says how you'd like to be buried but your savings will pay for the burial and if you truly have no dependence your retirement savings if you die we'll pay for the burial when a burial cost six to ten thousand dollars it's not a lot of money in that sense I mean you could have burials that are much more but if you're so folks so focused on saving enough for your burial make that part of your savings but don't buy an insurance policy if you don't have dependents and don't really can't afford it for that burial it's not a lot of money and I feel like the people who are a soul that are preyed on I really do yeah for that okay let's quickly talk about disability insurance and on a positive note this is where I um I'm really a big fan of the freelancers union because so freelancers really stand to lose the most in case of sickness and injury and I didn't I knew this, you know, I'm my intellect knew this, but then I worked with a client who savings were wiped out for six months because she got sick wiped out and then she just didn't have the energy to really get back on she she was like a set designer for broadway and so it was a real physical job, but she was an artist and so she was really like, but she'd have to get on top of the ladder and paint the sets I mean she's she's so talented she paint murals and she did a lot of she worked for the metropolitan opera I mean, just such a talented woman let's talk about an artist and she made a great living she had the savings, she got sick, I think she got like lyme disease, I mean something just like you can't plan for, and I mean, I live in the north east lyme disease is actually a really big issue they wiped out her savings wiped out, and then she did not have the physical energy to really get backto work for another year, so she did some things, but I mean, she couldn't get up on those ladders and build those sets and paint and do the wonderfully talented things she was doing if she had disability insurance like it would have saved her absolutely saved or so again, it's an insurance like when you start going through these insurance is it seems so expensive and it's a lot of money and I get it, I totally get it, but if you feel like you've got no backup plan and if god forbid you get sick and people are depending on you for income, get a quote for disability insurance I think one in five people needed and if you work for a corporation, you've got a little bit of backup plan for a lot of good corporations have short term disability policies, so if you're really out for a few months, they will cover percentage, but you get a paycheck, you get sick days if you are the breadwinner, if you are bringing in the money and people are depending on you for income shop around for a policy, and so how if you're in the northeast and I'm not sure if it's national, but I know if you're in the northeast, the freelancers union has disability insurance that isthe so affordable it's under one hundred dollars a month that's really, really great and so definitely check into that. Yeah, just actually kind of a personal story on that if you know my mom sharing love it, but I was actually speaking with, uh, my girlfriend yesterday about finances and we're starting to talk about I mean, we're going there at some point in our lives so we're starting to talk about our finances and she's very positive about talking about finances for monterrey obsessed with finance um and she was like she asked me do you have disability insurance? And I said I don't and she said, well, I got I was a freelancer now she has like a regular job just like I was a freelancer and I got really sick and for three years I couldn't work right and I didn't have disability insurance and so I had to like ask my parents for help at and she's like how I had it it would have right it would have been fine right would have you know I would have gotten cover she's like hi hi you're you don't feel that strongly until you meet somebody who needs it and I think because I've worked with so many freelancers I met I was kind of a time when I was like, yeah, I think you need it I get the numbers, I hear it but then you meet somebody like your girlfriend or like I had this client you can see how khun really devastate you and hopefully she didn't go into debt like hopefully but what if you don't have parents to ask for what if you don't have friends or you don't want to ask, you know it can cripple you financially so mm mm mm. Life step. A question about what it covers. You know, the sum sum businesses are structured around salary and then there's some distributions that come through how what are they covering? Your no, no that's a great point. So in terms of disability insurance, on the whole, if you get a plan it's really not going to cover more than about sixty percent of the income that you need so if you need five thousand dollars a month it's going too rarely cover more than sixty six or two thirds of a of your income. So it's going to be an agreed upon amount from the gecko, so don't expect that it's going to cover your income one hundred percent, so it might be two hundred dollars a month. Five hundred like I worked with a client who was a solo practitioner psychologist, she was a therapist, and I don't know how, but she there was like a site that was like a psychology union were not union, but like some sort of an association, so she was able to buy a disability insurance through them, because if you just go by yourself is a freelancer and try and get disability insurance from an agent, it could be really expense. So being part of the union organization or association, you could get a group rate, so she basically got a group rate that would give her, you know, and she paid for it, I can, you know, I can't rember the doll around, but it was agreed upon that she would get two thousand dollars a month. Is that enough for her to live on? You'd be type, but at least it's income and she wouldn't have to, you know, go through her savings. So I think you sort of agree upon the amount beforehand, but just know that it's not going to cover one hundred percent at all, but get the quote it's like what I'm saying before, I'd rather so you have some insurance that covers a portion of what you need, then nothing, and then again, people are so scared of insurance because they think they can afford it. And it's true, like we've gone through a lot of budgets and there's not a lot of room, so it's hard to see can I go through it, but get the quote and you're like, okay, I need life insurance, disability insurance, long term care. Well, I don't have a child right now, but I am working by myself let me get the disability insurance now. I'm you know I'm with my girlfriend we're probably going to get married in a year or two maybe we look at life insurance or two or three years that's our goal for that I'm forty in ten years I'll look at long term care so if you are a forty five year old freelancer who has small kids yeah, you're probably thinking I need to find three things right now which cannot be easy but maybe on the flip side I'm just throwing this out there if you've really gone through the numbers if you're in your forties and you have already saved a good amount of money, maybe you don't need as much disability because you do have a have to your savings that won't wipe you out if you're not working for three to four years. So just a question about the payout on either disability insurance it's a long term care or in whole or term life insurance are these pre or post text amount that's a great question so um we'll talk about a state planning so life insurance is used you know, I don't know the answer about taxes for life insurance but it's usually part of an estate so somebody's dying it's considered the estate so how much of the estate is taxable or not, which we'll talk about it a minute um you know, I believe the other in terms of disability insurance it's like income so you pay taxes on your income but at least you've got the income and long term care I don't know I don't know the answer good question oh yeah it's just something to think about resetting the and the amount of her disability right what to ask right well I think it's really what can you afford in a payment so because I have worked with people to buy it and it's usually how much can I ford is the payment because yeah you want to get as much as you can but you can only afford so much ok very rarely I mean probably working with a few doctors are the only group that I've seen that really take on a lot because if they get hurt like if they're hand gets hurt they can cut you know, do surgery I mean are you know it can really cripple them in that sense and it's not an easy policy to buy because there are some limitations on what constitutes working like maybe you can still work again I I don't know the ins and outs and this is where you getting informed and I you know I have help people by the policies and I think once you're looking through what it covers and what it doesn't cover it's what's acceptable to you and again what can you afford because the better policies cover mohr but can you afford that so making that a priority and if we you know, probably a lot of you are watching this in the game I don't even realise I need this but now I do and so if you think about some of your goals at the beginning, maybe this's really resonates to you that you really really have to make this a prayer so this is a state planning by the way, you know, when we talk about a state planning that's what this is this is taking care of myself taking care of my family, taking care of my benefits you know, I heard somebody say recently in your twenties you get your rainy day fund in your thirties, you set up your retirement account plus the rainy day, you know, I'm just making this up in your forties you do your state planning, so I thought this was I'm not fully agreeing with that, but I thought, you know, chances are fear in your twenties you're probably not looking at long term care life insurance because you probably don't have a family yet or if you do there, you know, maybe don't have children yet or you know, you you don't have to worry about long term care, but you do have to worry about disability, so um and I know too that there are cashed the insurance industry is really creative you know that might seem hard to believe, but they sell plans that are long term care disability plans so they have characteristics of both so again, working with someone that you can trust that you get referrals on and other questions task can be really helpful okay? You're will everybody needs a will everybody I don't care how old you are, how young you are and that's where I think a lot of people think while I'm young I don't need to stay planning everybody needs a will because if you don't have a will like maybe nobody in this room has assets or nobody's listening of assets but most people I talked to have something and where do you want that to go? If you die like if you get hit by taxi tomorrow, where do you want your camera equipment to go? Where do you want your savings to go? So yes, when you fill out investment forms you have to list a beneficiary so you've list to that but what if you've cashed in the savings account? What if you have art that you've bought? Where do you want that to go? What if you wanted to go to something that's a little bit different off the beaten path, a will will take care of that will's could be amended well could be changed wheels can be very simple to create and I'll talk a lot about that but everybody needs a will and I think a lot of people think they don't need a will until they have kids or until they really make a lot of money it's kind of like that misconception that well, I don't have any money to invest, so I'm not going to learn about investing so everybody needs a well, so if you don't have a whale created well, right? Well, we'll talk about ways to do it yourself, but what the will should include is just the last will and testament where you want your assets to go, the living will and the health care proxy are directly combined, so that's if I get sick who's going to make those decisions for me and what do I want those decisions to be? So if I get hit by a car and I'm on a research, you know, a breathing tube do I want that breathing too? Or do I just want my husband or my wife or my sister to take care of that decision? And I don't know if you remember there's a really big case in the news in florida probably like five, seven years ago where this poor woman was on like in a coma practically on breathing tube and her husband was like, she doesn't want this, but she didn't have a will she didn't have the health care proxy and her family parents were like no, we're not doing it I mean, it was so horrible, so sad, so gut wrenching so if they had just had written that down I mean, I just I just got chills thinking about that so I know that's something that I put cause I'm really my husband are really clear about what we want and then guardian and trustees so guardian is if you've got children or if you've got like I've client to special needs kids it's who are older but someone's got to take care of them who's going to do that and then the trustee is usually the same but maybe somebody in charge of the money if there's a guardian so I know a lot of people have put it separate guardian like someone in charge of the kids, but someone else is in charge of the money anyway those air just decisions you've to make they're not there's no right or wrong but make him so so important so you can go to a lawyer that's the easiest and the most expensive you can also do it yourself. So no low dot com quicken has will maker, which is a program that costs, I don't know forty fifty dollars it's very boilerplate template but it's a great great tool and so I think if especially if you're young and you're just starting out and you don't have you're not your fear life isn't so complicated get this going and then it becomes legal when you print it out you get it notarized with witnesses so go to your bank whatever so create that and that will give you all of these it'll give you the living will the healthcare proxy the guardian trustees or this is a great great site is legalzoom dot com letter has anybody used it on a from the chat rooms if anyone's used it or everyone heard of it so it is a youse don't back there legalzoom so what I like about legal zoom is it's a it's a website but it's essentially like an eight hundred number that you call and it's an attorney on the line and so you could get wills you can get you can become corporate gosh what's the word I'm blanking on the word yes, you can get in corroborated if you essentially it's a legal website it's a legal service so you're not going to have one person that you're talking to your going to have joe the lawyer who you can always call up but you can call I've had so many clients call them up like especially if they have new babies or they just want to set up in a corporation and they just and it is a fraction of the cost of working with a private lawyer so I'm not saying that it should take the place of but it could be a great tool because I think to create a will that maybe you want something a little more complicated or a little more, and it might cost one hundred fifty dollars or two hundred dollars, which thinking about it, but what you like, what people like about is you actually get to talk to a person and just have them write it out, have them cleared out and they mail to you and then it's the same thing, you have to get it notarized, and they really walk you through it. So I'm a big fan of legal zoom again, it's not your final thing, it might not be the only thing. And then the other thing that I would say is with your will and your beneficiaries is very often they don't match because think about if you worked for company, you signed up for four oh one k and then you worked for that company for a long time, or you open an ira like today, you did it five years ago and you wrote a beneficiary fast forward five years later, ten years later, you still have that for one k, or you still have that ira, and you haven't changed the beneficiary, but maybe you've gotten married or you've met somebody who moved in together so that happened with a client of mine when I had her do this exercise she realized that the beneficiary and her husband's for one k was his sister and they've been married for fifteen years but he'd been at the company for seventeen years or twenty years he'd been in the company for a really long time and so if god and that was that's their biggest asset was his for one case so if god forbid he died, the money would all go to the sister not to her now I I okay I can't say that legally is true, but the point is the will said her the beneficiary said the sister what does that mean? The money goes to probate so you don't have access to the money for six months so that's what happens if you don't have a will especially if you have kids? I mean I'm talking worst case scenario, but if the money goes to probate, it gets tied up for six months is that what she wants your money horseman? So do we have any questions? I'm going to tie up this area discussion on wills and insurance not so their questions as such, but but what you're saying is thought provoking I think it's, you know it's a difficult subject for a lot of people's we've got a lot of people sharing stories of of the resuscitation yeah, various aspects of that most more than actual questions but it runs with you it's such a difficult area and it's like I said it's why I could never saw life insurance why I could never work in the industry but here I am teaching finances I'd be doing you a disservice if I wasn't talking about it so that's why I do bring it up you know what I have to admit like who was I talking? I was talking to a really, really good friend of mine the other day who's got three children and you know we were talking about the guardian visible who's, your guardian and she's like we don't have a will I was like are you kidding me? You've got three kids and she's like we can't agree on the garden way don't know we wanted to give the kids what we just keep putting off the will and I've heard that story more than once so it's just something that it's it's like a really hot topic in that sense um we do have a quick question the chats are you have you leslie loved wants to know if I die and my house is not paid off and I will the house to someone what they have to pay it off that's such a great question so if you die and needs somebody inherits the house, you will not what they will inherit essentially, is the houses the asset, so they can continue paying the mortgage. But then they'll own the house. Or they can sell the house to say the house is worth four hundred thousand. But they have a mortgage of two hundred thousand, so that person khun, just assume the mortgage. But they will have the four hundred thousand dollar asset with the two hundred thousand mortgage. Or they can sell the house, which is what most people do. Pay the bank back the mortgage of two hundred thousand. But now they've inherited two hundred thousand credit card debts are are a little weird, because sometimes on the whole people don't inherit that. Like that, like credit card debt, they inherit more like mortgage debt, like it's, really securitized, based on an asset.