Are You Taking The Long View?

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When is it that you realize you can't stop the aging process? When you lose a parent to age, or when instead of seeing gray hair you see white? Or how about when you start taking the stairs slowly? Whenever it is, the realization comes with the experience of age and the knowledge that your health isn't something to take for granted.

As the Baby Boom bubble (those 75 million Americans born between 1946 and 1964) gets older and drifts into retirement, issues of aging and health become increasingly important. Long-term health care may be one of our country's most under-appreciated health-care concerns. The U.S. Census Bureau says our population of persons 65 and older will double to about 70 million in less than 30 years, while those 85 and older will grow to 8.5 million. Yes, we're living longer, but as we age, we'll need to plan on spending a bigger piece of our disposable income for medicines, physician visits, hospitalization, and such.

In most instances, the earlier you plan for something, the better. Kind of like when you put that first $2,000 into your IRA-it's an investment in your financial future. And that's why planning for long-term care needs with the insurance to cover those needs is becoming a must for most seniors and older middle-age members.

We're seeing a lot of interest and increasing demand from credit union members wanting to preserve their savings and investments with protection from these unexpected and often devastating expenses. Of the 75 million boomers I mentioned, about 30 million of these are credit union members. As their trusted financial services provider, you can help your members understand this need and protect the assets they've entrusted to you.

You and your members (and your fellow employees, for that matter) should consider long-term care insurance for several reasons-protecting assets, insuring reliable care is there, and for peace of mind. This protection is not like traditional health care insurance, it insures against long-term chronic care needs, which can include care at home, in assisted living facilities, and at traditional nursing home or skilled care facilities.

Statistics show that four out of every 10 people reaching age 65 will experience the need for long-term care. Will your members and their families be able to afford the physical care and emotional support should it be needed? Will they have to sell assets and liquidate their possessions? Medicare is there, but its coverage is limited. Medicare supplemental policies fill gaps in health coverage, but not in long-term care situations. Medicaid requires participants to spend down or exhaust their personal assets to become eligible, and the participant's choices can be limited.

For these same reasons, we're also seeing long-term care insurance becoming an increasingly popular employer-sponsored benefit. Last year, for example, federal government employees' benefits included this option. As a credit union leader, you may want to consider adding it to your package of benefits to further reward and retain your employees. Coverage options are flexible and CUs and employees can share in the cost of premiums.

As with the purchase of any type of insurance policy, buyers must weigh the options. Keep in mind that the average cost of a one-year stay in a nursing home now exceeds $50,000. An aide making home visits three times a week can cost upwards of $1,000 a month. Add in the need for physical therapy or skilled care and retirement savings can be drained quickly. So, when choosing a policy, make sure it covers all types of care, pays sufficient benefits for an adequate period of time, and includes a built-in inflation protection option. The plan should be designed for your needs and may include spousal benefits and other options like waiving the premiums while you're on claim. Talk to a professional to help sort your options.

When shopping for a carrier, take a careful look at the marketplace. Like many industries, long-term care insurers have experienced company consolidations in recent years and many have exited the long-term care market altogether. Check to be sure the company you're considering is committed to the business. Has it raised policyowner premiums? Perhaps most important, make sure it has sufficient reserves to pay future claims. An "excellent" classification from a rating agency like A.M. Best is a good indicator of financial strength.

There's no easy way to deal with the difficult decisions and challenges of growing older, but long-term care insurance can lessen some of the financial stress as we age. Today, when you don't need it, is the best time to shop and consider all the options. Your members and employees will thank you when they're older-or maybe sooner.

Chris Abely is National Sales Manager for Long-Term Care at CUNA Mutual Group. Contact him at chris.abely or (203) 315-6760.

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