Long Term Care Funding with David Clemons

*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.

And Welcome back to answers for elders radio everyone, as we’re talking about financial and legal foundations to start the new year. I am here with Mr David Clements. He is a long term care funding expert, David, and you’ve been in rounded, you know, quite a whild for about sixteen years doing programs helping families afford the expensive cost of long term care. And Welcome to the program yeah, thanks for having me. It’s gonna be fun talking to your audience today. You know it is, because that’s the big misnomer. People Think, oh my Gosh, how in the world am I going to take care of myself, especially now after we’ve been through a horrible recession. A lot of us are family caregivers, a lot of us have lost our jobs doing caregiving and we’re in a situation in many cases where we sit back being in our S and s not having much in the way of savings or equity in our homes or all different kinds of things. And obviously there’s different degrees. But, David, what do you find most most often with families that are in that role? Well, if a family members taken care of a parent, there’s a huge fight family dynamic that I’ve watched. I’ve got over forty clients right now that are using their long term care insurance, but I talked hundreds of families that are dealing with this life event of taking care of somebody right and the family dynamics is that, you know, the children which are usually doing it. A lot of times just the spouse to but the children have to stop their lives and if their kids are in school, they’re missing the soccer games and their college football games or or they’re just missing promotions and just missing time away from their lives their parents, if they’re taking care of their parents, just that day to day grind of being with a parent. You know, sometimes we didn’t have fun living with our parents, let alone taking care of them. So that family dynamics in my in my history, it’s tears families apart more than it brings them together, because people will say, all my mom wants me to take care of it, where she really doesn’t. She just wants you to be around, to be a supporting person, but not the one actually doing the work. Well, and that’s the other side, I’m sure, of taking care of a parent. They know how to push your buttons they’ve you know, they raised you, they know you. There’s all different types of dynamics and a family and it’s the siblings. You know, if you’re the one that’s on the front line with caring for a loved one and you’re the one that’s missing out on work and you’re the one that’s, you know, driving to the doctor appointments and helping them, there’s it’s there’s a big difference in your experience of your parent as opposed to your siblings that come in and maybe visit once a month or once a year, or whatever that is, I’m sure. And sometimes family members run away from the problem because they won’t come home for the weekend to see mom because she’s in that position. And then there’s animosity between the children because you’re not helping enough and the one that’s doing all of it thinks they’re getting the bad deal right, right. So obviously now you, I know you’re one of the endorsed local providers of the Dave Ramsey sow was just which is really awesome and and I’m so glad that you’re here because a lot of people have questions about long term care funding, whether it’s veterans benefits, whether it’s you know how one of the biggest concerns of families is how do we manage not only mom and dad’s long term care funding, but the cost of health care and and the cost of care going forward? And you know you’re going to multiply that by you know, I’m in my s today, I’m going to be in my s probably if I live that long. You know, who knows how expensive that care is going to be. Then well, so there’s only really four ways to fund long term care. There’s just those four ways. And the first ways your family just does it. I mean that’s just a way. It’s fun and by the sacrifice of the money that the children sometimes will put into it or the fact that the spouse stops their life to take care of a spouse. But the second way you do it to just pay for it. And if somebody’s got, I’m million bucks, you know they can write a check for a hundred thousand dollars a year to pay for the caregiving. If somebody doesn’t have a lot of money and they have to spend the money because the family is not there to help or they didn’t have a lot of wealth, they’re going to spend their money away. And then there’s Medicaid. The welfare system is losing ground because there’s no beads anymore, and so and then so medicaids kind of like that the aid and attendance benefit you’ve been talking about on your show. You have to spend down a bit to get to that va benefit. So you got your family your money, and then welfare, if you write out of money. All Long Term Care Insurance is is just a funding mechanism for allowing you to have money to pay for care. Right. There’s a monthly limit to how much they’re going to let you spend every month, but all that really is is a permission slip to not force your family to do all the caregiving. I mean, even if it’s four or five thousand dollars a month of assistance, if your care expenses were Eightzero, because you’re paying for caregivers, if the insurance pays half of that, that’s half of it that the family didn’t have to do. Well and you don’t realize it. It’s like like, for example, my mom, I she was started out in assisted living, right or independent. started out in independent, but she really should have been an assistant living. She did not have long term care in shirts and we ended up having to. By the time she was done, she was paying eighty five hundred a month versus a living where most of that was based on she had lived in a studio apartment. So it wasn’t like her apartment rent that she paid was that much. It was like over, you know, probably close to five thousand dollars a month. That was it. Had she had long term care insurance would have helped with that. Not to crack. And even when the insurance doesn’t pay the whole bill, when somebody has to start dipping into their portfolio of wealth, whether it’s in their home or there, they have to sell a piece of property or an investment, you’re usually going to have to pay taxes on that money. Right, if you got to sell a home, you’re going to pay closing cost and a state and so everything. Getting to your money, unless it’s in a rath higher ray costume me, and so you’re going to lose twenty to twenty five percent of it just to get to your money, and so that’s expensive. And then you pulled money out of your portfolio which doesn’t now. It doesn’t earn income anymore, right, and doesn’t get passed on to the kids if you go into going through a bunch of it right, right. And so obviously we as adult children need to think about our own lives if we’re taking care of mom and dad. I mean think about today, you know, if you’re listening and maybe you’re taking care of a loved one or know people that are taking care of loved ones and know the expensive cost. Think about yourself, because I think one of the things that I didn’t do when I was a caregiver is I didn’t think about me. I was your sacrificial lamb to the INS degree. You know, I put everything in my life on hold, which you talked about, and I didn’t take care of myself and what I should have done is all kinds of things, and that’s why we’re here today, obviously, because I had to learn all these things after the fact. Now, one of the things that I know for for what you do, is you help obviously, even you know, if you live on a budget, to be able to pay a little bit per month towards a long term care policy. That the younger that you get, isn’t that true? It’s less money, absolutely, the Yuggy you buy this insurance to less expensive it is and you’d be pretty much lock in the prize. But it long term care interns is really hard to get now you have to be very, very healthy. I had thirty percent declines last year in the couple hundred policies that I took applications from. So the insurance companies of tightened up their underwriting. The policies are expensive. So there’s lots of reasons people don’t buy this, is this insurance. One is they can’t qualify with health. Another is they just can’t afford a hundred dollars a month for kit, you know, for the insurance, and they don’t have much wealth anyway. So I wouldn’t make sense to buy a policy if you don’t have wealth because you’ll end up on Medicaid. But I didn’t know that it was so restrictive as far as what did the insurance companies look for? As far as hell? Well, we’d have an our show of we’re going to talk about all the hundreds of things that either create higher premiums or decline. Uh Huh. But any chronic condition or a combination of chronic conditions is going to not you’re not going to buy in show just because they’re really gotten, really picky about who they accept. Interesting. So it’s it is become very difficult. So we are talking to David Clements. He is a long term care insurance agent, I guess I would say, but he’s an advisor. He works with families. David, tell me a little bit about you know, how you work with families. What would be the one thing that you would talk about with families and to determine their needs? Great. Well, after you know, listening to your show for the last few weeks, you know a couple of your guests have talked about how there’s, you know, in the estate planning world, only sixty four percent of the populations ever written a will. Well, that’s crazy. Eighty percent, eighty percent of the of the population hasn’t taken and put it together a long term care plan. So if you don’t have a plan, just like if you don’t have a will, you go to probate, blah, Blah Blah. Well, if you don’t have a long term care plan, you’re kind of expecting your kids are taking it for granted that your spouse or your kids will take care of you. That’s unfair to everybody. But if that’s going to be. Your plan is that your family is going to take care of you. They need to know that. They need to be living closer to you or living across the street or something. Obviously some people will never even consider insurance because they don’t like insurance companies and just don’t plan ahead. But if somebody is going to have to, if they’re going to self insure because they don’t want to buy insurance or couldn’t buy insurance, then they just need to be ready to liquidate their money and they have to be. They have they not? They can’t be stingy about their money if they have to stroke and need care right because the family won’t want to spend the money, the thirty bucks an hour to hire a caregiver. Amen. So the daughter will do it and the daughter will have to do it because she’s trying to protect mom’s money so she doesn’t lose it all or the right or that the daughter will potentially inherit some of it. But what I encourage people to do if they’ve got the money, spend it on care, because that’s why you saved it and earned it. Don’t put your children through having to be your caregiver every day for ten hours. Have them come on the weekends and and use your money that you’ve grown with to take the burden off the family to have to do it right. Let them come over when they want to, not when they have to. And it’s always, you know, we talked about is if you’ve lifted this show, is any time that you can be a daughter or a son. That’s the right decision to make. Is Not about you know, I always talk about with families, choose your battles. You know, don’t always, you know, don’t parent your parent. You know, don’t be in a situation where you’re taking care of a parent and all of a sudden, you know, you’re trying to be the one that is the savior, because there’s other things, resources out there that you should take advantage of as a as a child, and that’s certainly one of the things that you know, taking care of yourself is that long term care. Even if your parents were healthy, you’re going to come over to see the folks on the on the weekends as because you love them and you want to hang out with them. Right when you have to come over to do their dishes and laundry and drive them to a doctor’s appointment and cook their meals for him. It takes on a different role right. I like the term being a tender, loving caregiver as opposed to a caregiver because you’re coming over to watch the Oprah show with her and not yes, Baker bread for so Dave. How do we reach to my office number? I have an office in Kirkland, but I cover that. You know all kinds of different states. You know masurely nationally. I can help people. I’m the ELP for Dave Ramsey in a way. So I talked to a lot of people in a way. Love that. But my phone number at my office is four to five, eight, two, three, eight nine, six, one and an email I have as DGC cl em at Earth link dotnet. That’s wonderful day. Thank you so much for being on the program with this today. I sure appreciate and had fun