Insurance World

Copyright 2006 Clay Cotton

Long term care insurance is an obvious “must-have’ for Americans with assets and families to protect and with discretionary income to afford the premiums. While Suze Orman publicly promotes this coverage as the foundation of your financial plan, we wonder if she ought to put even MORE emphasis on LTCi protection

People all-too-often assume that long term care is just for the elderly, and it’s shocking to learn that over 40% of nursing home residents are currently under age 65. In fact, because of my advanced Multiple Sclerosis, I would be in a nursing home right now if I had LTCi coverage to pay for it, and if my beloved wife, Kimberly, would agree to let me out of her sight.

In any case, while Suze Orman is clearly America’s most popular financial advisor, she is also America’s most visible proponent of long term care insurance.

This is a good thing for all of us since, of every 20 folks who need long term care insurance, only 1 of us owns it - A sad state of affairs to be sure. And we had better learn more about it fast…

But now the question is this: Should Suze Orman be even more forceful in her insistence that long term care insurance be the bedrock upon which everybody’s financial planning must be anchored?

And why all the fuss over long term care insurance, anyway?

Well, just ask Suze Orman: It’s because she knows as well as I do why Americans have no other common sense choice than to embrace this family financial tool if they want a mature, secure retirement. I, myself, was stricken with Multiple Sclerosis at age 50 - WITHOUT long term care insurance. Now I can never get long term care insurance coverage because of this pre-existing condition. Rats!

Suze Orman is bringing America’s baby boomers into awareness on retirement planning and the need for long term care insurance, and for this she should be commended, but is she saying enough? You be the judge.

Here are few words from Ms. Orman: “Considering how hard people work for the majority of their lives with an eye towards retiring, it’s surprising to find that many give little thought to actually funding (and protecting) their retirement.”

In You’ve Earned It, Don’t Lose It: Mistakes You Can’t Afford to Make When You Retire, Suze addresses this sad fact and “goes beyond the usual financial primer to describe how to safeguard your financial future with smart long term care insurance.”

“No well-planned retirement should be without long term care insurance. It is the very cornerstone of retirement security.” - Suze Orman

What is the value of an expert’s advice? I have found through experience that it is difficult to put a price on advice that comes from an expert. It is actually invaluable when you consider the cost not only in money, but also what your personal time is worth and what your stress level and lack of distraction from your important day-to-day tasks are worth. Informed decisions based on knowledge that are generally offered at no charge can save time, stress and a great deal of hassle. As an example: Hiring a plumber if you don’t know how to plumb. I tried to do my own plumbing once. I found out rather quickly, that I am not a plumber. I ended up not only ruining the faucet components I was trying to fix, but also causing water damage to my residence. When I finally did get an expert plumber to do the job, and fix the mess I had created, it cost me much more than it would have if I had hired him in the first place.

Another example is utilizing a lawyer’s advice to avoid legal chaos. When I ended my marriage a dozen years ago, I made the mistake of thinking I could get a divorce by using a “divorce kit”. This strategy may work for some, but in my case it didn’t turn out very well. Even though I did a ton of research, followed a strict time-line and meticulously dotted every “I” and crossed every “T” on the petition, I paid the price for not seeking an expert’s advice. Although I felt confident on the day of the hearing, I found myself encompassed into a war of words that made my head spin. As a result I was ordered to pay exorbitant support. Years later, when my children reached the age of maturation, and my ex-wife had remarried; it was time to file for some relief. This time I hired a lawyer. My expert’s advice was not only to end the excessive support going out, but in all fairness, to get back some of what I had been strong-armed into paying out under duress. The court agreed, and I found that I had needlessly suffered a lack of funds for many years.

Lastly, a good example is finding insurance professionals to avoid inadequate coverage or huge hassles when the time comes to cash in on a policy. Years ago, I decided to buy renters insurance to guard my home’s contents. Trying to be thrifty, I searched on the Web for the best deals. I found a Website offering the insurance at a “cut rate”, so I submitted my personal information and received an “automatic quote”. It came up on the screen rather quickly and it looked fairly generic, so I called the toll-free number provided. I wanted to find out if I should serialize, or mark my possessions in any way so they could later be identified, and also find out if I should submit a list of my personal items and the value I would place on them. The “automated insurance agent” on the other end of the line wasn’t much help, and I finally got frustrated with trying to get an actual human being to talk with. Foolishly, I signed up for the insurance and started paying the premiums, automatically withdrawn from my checking account, of course. I never actually talked to an insurance agent, although I tried several more times to do so. When my house was robbed and I turned in a claim, I found that I would only be paid pennies on the dollar and that my future premiums would be more expensive. Again, not seeking an expert’s advice proved to be costly.

Insurance, whether for life, health, home or your automobile, is considered a daunting subject by many. Most people avoid it and carry only what they are forced to have. For example, mortgage insurance because their home is financed and it’s a requirement. The very word “insurance” has a reputation and conjures up images of hours of research or sitting at the kitchen table with an agent being overwhelmed by the choices. I have found that I have a lot of apprehension towards discussing my own demise, as well as considering the need for insurance protection that benefits my loved ones upon my departure. When I was twenty-something, I laughed when someone mentioned life insurance. I saw no need for it, as I had a long way to go before I had to think about those things. If I had been smart, I would have sought an expert’s advice while I was young. I could have purchased a lifetime policy for a small amount. There is much value to advice offered to young people on this topic. I have personally found that there is a trend in the insurance industry that has taken customer service full circle, back to face-to-face and personal one-on-one attention. This valuable service, combined with the expediency of the modern age and the Internet, works very well to simplify and increase my understanding of insurance. There are good, reputable companies in which first contact on the Web leads immediately to a personal phone call from a knowledgeable and professional insurance expert that specializes in helping one understand in simple, straightforward terms, an expert’s advice.