When Long-Term Care Insurance was a fledgling product, my role as an advisor was to help clients determine if paying the premium was needed based on the wealth they had accumulated. I thought that if someone had enough money to "self-insure" then they did not need to apply for the insurance. This thought process of using a financial ledger to determine if one needed to purchase Long Term Care insurance changed for me one summer several years ago.

That summer I received a call from a client's daughter. Her father Bob1, my client, had a stroke and was in the hospital. Let me tell you about this man. Bob was a veteran and had the persona of an army sergeant. Bob was the undisputed leader of the house. I can imagine Bob sitting in his easy chair at night, watching the 6:00 news, complaining about how the world had turned out. He would be wearing his dinner jacket, pipe in one hand and drink in the other. By the way, the drink was lovingly made by his beautiful wife Anne (1) and any demand that Bob made would be respectfully filled by her. Don't get me wrong, he was not a disrespectful guy to his wife, they are just a typical couple from the great generation. Anyway, he made all the financial decisions of the household and then in one moment he could no longer play that role.


Anne, with the help of their daughter, had to make the tough decision to move Bob to a place that he could get the professional care that he needed. Money was no object and they did not own a long term care policy. The fact is that they could afford to place him in any facility they chose. The reality was that it did not turn out that way. I witnessed a daughter helping her distraught mother to select the proper care at the cheapest price. Poor Bob would have selected the fanciest place with the finest china, but he was placed in a mid-tier facility with all the best intentions.

Then, several weeks later, another client a few years younger also had a stroke. They have a little different story. Jan1 and Kevin1, both retired teachers, lived a simple life. They had a very comfortable living with two good pensions but had a tenth of what Bob and Anne had stashed away. Oh yeah, our two teachers did have long term care policies. They had always viewed the policy as a "stash of cash" that they could use if ever needed. Well, they needed it now. Jan and her daughter jumped into action and with the help of an insurance company liaison chose one of the best places in town for Kevin. I saw no heartache, no endless comparisons and an attitude of let's find the best place possible without worrying about cash flow. It was a stark difference from what our army sergeant's family went through.

So I now view long term care coverage differently. Choice and Dignity – this is what Jan and Kevin purchased. Choice and Dignity are not financial issues…they are life issues. No more ledger statements for me when it comes to analyzing the need. Are you prepared if something happens to someone in your family?

Written by Byron Ellis