Wednesday, June 17, 2020

Analysis Paralysis*

Back in April, an agency client (we'll call him Mark) inquired about Long Term Care insurance (LTCi). As usual, I forwarded the link to FoIB Herman Bruns' evergreen primer on purchasing this valuable coverage.

Yesterday, I received this in email:


Just wanted you to know I am still here, just sidetracked with other responsibilities.

I am back to reading about LTC. 

Also I am curious about the combination policies that link together LTC and universal life [ie hybrid plans]; not sure I understand the death benefit. If I don't use the LTCi funds my heirs would receive a death benefit i.e. life insurance?  But you put a lot of money in upfront? Not sure how that compares with annual premiums.

Lots of questions. and apparently one can decide on certain components of traditional LTC.

I am almost at the time where we need to talk

So, rather than try to answer all that via email, I called him.

The conversation ran for almost an hour, but I took away a few key points that I thought would be helpful to our readers.

First, I told Mark that, while I certainly encourage my clients to be informed consumers, there's a point where that becomes "information overload," and one simply shuts down, unable to make an actual decision.

And that would be bad.


Well, to paraphrase a dear friend:

The best LTCi plan is the one that is in force on the day you enter the nursing home.

The worst plan is the one that you never bought, and so wasn't in force when you needed it.

So ultimately, it doesn't really matter which plan you buy, as long as you make the conscious decision to either pull the trigger or self-insure.

Now, one may quibble as to which plan design represents the "best bang for the buck," and I'm happy to have that convo, as well. But the bottom lime is that a well-designed plan, that fits one's budget (both current and projected) is the goal.

It really is that simple.

(* Thanks, Jeff M!)
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