Using Life Insurance to Pay for Long-Term Care with Lacey Russell

Join Kosta and his guest: Lacey Russell, Life Insurance Agent for Higginbotham and Viral Life Insurance Advocate working to share the advantages and advantages of utilizing insurance. 

Today we’re talking about how you can use life insurance to pay for long-term care and benefits you can use throughout your life.

In this episode: How you can use life insurance to pay for long-term care, what tools customers can use to anticipate their needs for care and how they will know if their policy will provide sufficient coverage and the advantages of using life insurance to pay for care versus long-term care insurance or other payment strategies? 

Watch this episode on YouTube:
https://youtu.be/Zv3u7hR6VSM

Find out more about Lacey Russell and Higginbotham:
https://www.higginbotham.com/team/lacey-russell/

Follow Lacey Russell on TikTok:
https://www.tiktok.com/@laceythelifelady

Find out more about Kosta Yepifantsev:
http://kostayepifantsev.com/

Transcript

Lacey Russell: 0:04

But it's definitely something that I would also make sure you keep the focus that this is for long term care. I wouldn't double dip and say Oh, well I've got a life policy. Let me just add the rider on and it could be either or because potentially most people will need both the life insurance benefit and the Long Term Care coverage.

Caroline Moore: 0:23

Welcome to Now or Never Long-Term Care Strategy with Kosta Yepifantsev a podcast for all those seeking answers and solutions in the long term care space. This podcast is designed to create resources, start conversations and bring awareness to the industry that will inevitably impact all Americans. Here's your host Kosta Yepifantsev.

Kosta Yepifantsev: 0:47

Hey, y'all, this is Kosta. And today, I'm here with my guest, Lacey Russell, life insurance agent for hickinbotham, and viral life insurance advocate, working to share the advantages of utilizing insurance. Today, we're talking about how you can use life insurance to pay for long term care and benefits you can use throughout your life. Welcome to the show, Lacey. For anyone that doesn't know, what are the living benefits of life insurance? And can you use life insurance to pay for long term care,

Lacey Russell: 1:17

living benefits are parts of a life insurance policy that can either be built in and already come with the policy or can be added on? Okay, there's an accelerated benefit rider that is more for terminal illness that you can tap into the death benefit prior. And there's more long term care focused ones that are for chronic illnesses, critical illnesses, and even a long term care specific writer, you can add on some life insurance policies that can help cover the costs.

Kosta Yepifantsev: 1:48

Fascinating, you know, most people I don't think they realize that you can have most people just get a life long term care insurance policy, but I don't think they realize that you can use a life insurance policy for this method.

Lacey Russell: 1:58

Yeah, absolutely. Yeah. What tools can customers use to anticipate their needs for care? And how will they know if their policy will provide sufficient coverage? Well, that's a little bit of a loaded question. But as far as tools go, I always recommend talking to trusted friends and family, you may not know what they know, they may be experiencing it with a family member, like an in law or something like that. It may not be something that they talk about openly unless you ask the question. So I think first and foremost, utilize the people around you that you trust, you can find how much they're paying for the care what it took for them to get there, what you know, alternatives did they try those type of things. One other tool that I personally use for my customers is nationwide Financial has one that's available, it's online. It's a long term care map. And so you can click on whatever state and it'll give you the average costs of long term care for your state. You can even get precision so to speak, for like major city. So you can there's a point where you can click and drop down bar comes and it gives you major cities of that state and it can customize it that way, you can get a better look, if you don't have anybody that's actually in that situation to kind of help help with that.

Kosta Yepifantsev: 3:18

That is such great advice. And it's fascinating, because there is really no like set price for what care costs in each individual state. And you said this is on Nationwide's website, like the insurance company nationwide.

Lacey Russell: 3:33

Yes, there's the actual website for that, though, is a nationwide financial LTC map. And then I think it's dot h v s financial.com, something like that. And it brings up a map of the United States and you can click on it and fiddle around. I just feel like there's so many people that are DIYers, I like to say, when it comes to that, and if we can offer a tool that they can do that I think we should do.

Kosta Yepifantsev: 4:02

And I'd say a lot of this is it shouldn't be new information. Right? But it is the industry and the industry itself is relatively new. When when when you talk about the industry to scale, right? And so, I mean, all this is that's the reason that we do this show is because we're talking to people who are offering great advice. Sometimes it's it can be a little repetitive, but I'll be honest, like I've never heard of that track that website before. And when you set it I was like, Oh my gosh, like yes, absolutely. That's like step one, right? Step one, if you're moving somewhere in your you know, you're over the age of 55 Anything like that. So

Lacey Russell: 4:45

they actually the report that they give me for a client can even get as precise as statistically speaking what age will you need long term care? Wow, it's it's like an eight or nine page report and it can get here A specific and it it brings in the medical insurance, what they'll cover all that and it breaks it down. I love their report for that. Nice. So let's get a little technical with life insurance what what types of life insurance policies and riders should be used to pay for care? And what options do customers have when it comes to utilizing a rider? The for long term care, the majority of the carriers will only put that on a permanent policy. So a universal life or a whole life policy more traditionally, the universal life policy. There are hybrid policies now. So is a just it's already built in. So there's no extra expense for that rider. So you can go to most of the major carriers and get a policy with a rider but hybrids are limited to a few carriers. They work very similar, the difference is is usually going to be how it's going to pay for the benefit. Is it going to be, you know, an indemnity or a reimbursement? I see. But yeah, it's gonna be on a permanent policy. So people should expect to pay a little bit more than they will preterm because it lasts your lifetime. And that's the intention.

Kosta Yepifantsev: 6:22

But it's definitely something that I would also make sure you focus or keep the focus that this is for long term care, I wouldn't I wouldn't double dip and say, Oh, well, I've got a life policy, let me just add the rider on. And it can be either or, because potentially most people will need both the life insurance benefit and the Long Term Care coverage. What type of policies do you sell to the majority of your clients? Hybrid? Okay, nice. And it's there like flexibility to it? Is that why it's so popular? Or I mean, what do you think makes it so popular above everything else,

Lacey Russell: 6:58

it's not a user lose, is kind of the best part. Because if, you know, you step off the street and get hit by a bus ban pays out like a life insurance policy. Yeah. But if you need the long term care, it stretches your money on three to five times, you know, you can go from $100,000 bucket of money to a 300,000 to $500,000 bucket of money that can stretch and even some some carriers will allow lifetime benefits even when that bucket runs out.

Kosta Yepifantsev: 7:31

Wow. And how much more expensive, like a month is this type of policy versus a traditional life insurance policy. As far as differences, it's not much different. It's hard to kind of gauge premiums, because there's so many different factors. But I mean, it's it's it's relative, it's not going to double your premium or anything like that very miniscule, for the benefits that you get. Got it. Got it. Okay, good. Good. So are there any restrictions or limitations on using life insurance to pay for long term care? And does the coverage ever expire?

Lacey Russell: 8:12

That's the beauty of using it with life insurance, because you are putting it on a permanent policy. Right. And those are intended to last now they'll go to age 121 21, which I hope none of them worry about leaving. They're intended to last for life or longer. So expiration really isn't a, an A concern on that part. And then as far as restrictions, there may be the same traditional restrictions you have on a standalone policy, like a an elimination period, or something like that, of course, the parameters of the ADLs that you would need to qualify for follow up for the claim as well. But otherwise,

Kosta Yepifantsev: 8:58

I mean, this seems kind of like a no brainer. So why don't more people use this benefit, instead of just buying traditional life insurance?

Lacey Russell: 9:06

Well, I think part of it is I like to call it the superhero complex. When you're young, you realize that you're gonna, you're like, Well, yeah, I'll look at it when I'm older. And that's kind of the reason why I've put myself out there on tick tock and stuff because as a 40 year old woman, had I known what I know now, you know, 10 years ago, I would be 10 years ahead of where I am. Yes. And I feel like a lot of people just don't know what they don't know. And long term care unless you've had it in your family. You You really aren't aware of it. You mean you're aware of nursing homes and stuff, but you know, I mean, think about it, my 10 year old thinks of 70 year old is old and I'm like yeah, your grandparents are just 60. So things like that. Just kind of that mentality that we have, but I also think that um Some part of it is, is there is as a stigma that goes around life insurance. And I'm trying to change that even if it's just me as a one person. We're not all grimy, used car salesmen. Some of us actually do want to do what's in your best interest. And I mean, I, personally am a fiduciary. So I'm bound to do that. It's but it's just in my nature, so it comes naturally. So it's not a difficult task for me. Yeah. So yeah,

Kosta Yepifantsev: 10:33

you know, since we've been, since we've been doing this podcast, we have met so many people that sell life insurance, long term care insurance, so different policies, and I have not met one person that I didn't personally feel like, you know, it's trying to do good by people. It's just, I think it's interesting, when you bring up you know, how people have the Superman, the superhero complex, or Superman complex, it's, you know, most of the time, people don't realize that long term care is extremely expensive. And that the only person that's going to be paying for long term care is you, you know, and so they, for some reason, feel like somebody is going to step in and take care of it, or you know, that they don't need to plan or that it's kind of like Medicare, you know, you turn 65, you get it, but that's how long term care works. And so I'm glad that that people are being educated to start preparing to start talking about life insurance, and how it can benefit the the process of paying for long term care. So in your opinion, what are the advantages of using life insurance to pay for care versus long term care insurance or other payment strategies,

Lacey Russell: 11:54

life insurance, I know, some of our carriers do what is called indemnity payments. So instead of having to keep receipts and turn those in, you know, after you've already footed the bill out of your own pocket, they just say, okay, yeah, you qualify for claim, we're gonna just cut you a check for X amount of dollars a month. And if you need it to pay, you know, the teenage boy down the street, that's helping mow the yard, if you, you know, need to pay a light bill, buy some groceries, you can do that where majority of other policies, it goes directly to either the provider or the facility that you're at. And it's, you know, you're completely out of the loop with all of it. Right. So that's, that's something I think that's really good. Also, being able to it's evolved, we, you know, you know, that like Long Term Care has evolved a lot. And I think the fact that I think the last statistic I had read was 87% of people want to do long term care in their home. Yeah, age in place. Exactly. And I don't think a lot of people realize that that is long term care, even if a spouse is providing it. And so that's something to where you don't have to have a registered nurse, you don't have to have a home health care provider come and provide those services. It can be done by a spouse, a child, a sibling, and you can still take care of your family member and have expenses to cover that. So

Kosta Yepifantsev: 13:31

that's right. So you can get paid through these policies to care for a loved one, if necessary.

Lacey Russell: 13:37

correctly. Yeah, you can use the funds like I say on the indemnity pot and didn't mean maybe policies or that

Kosta Yepifantsev: 13:44

it's a complicated word. Yeah. You can get if you have a child or spouse, you know, that maybe doesn't isn't can't work anymore, because you need so much care. You can use that to cover those expenses. And you know, they say that typically, it's not the it's not the person that's receiving care that ends up suffering physically, and may even die soon, or sooner than the person that's actually giving the care the caregiver. And so to have something like this, where you can bring in somebody to help even a few hours a week is incredible for individuals who are day in day out in the trenches providing care for a loved one. And you know, they're not willing to put them in a in a in a nursing home or assisted living facility and they want to do it in their own homes. Absolutely. Are there any tax implications for using life insurance to pay for care?

Lacey Russell: 14:48

There potentially could be okay. If you have a traditional life insurance policy that doesn't have the long term care rider or isn't a hybrid and you utilize

Kosta Yepifantsev: 15:00

Was that cash value to pay for him, then it would apply the same kind of tax implications as far as accessing that cash value, okay? Otherwise, that's the only way that you would have those implications. It's a benefit, just like it would pay, you know, like a medical benefit or something like that. So are there any other risks or any other considerations, which tend to account

Lacey Russell: 15:27

risks, I would, if you're using a life insurance policy with the rider, the risk is running out of money. And then now you don't have a life insurance policy. That's why I say, if you're going to utilize life insurance, make sure that you have this designated for long term care only, I would not have this policy, do double duty, because you don't want to need the long term care benefits. And now you pass away and you've used up all the benefits, and there's no death benefit to cover the rest of your mortgage, those kinds of things. So I do say Take, take heed to that. And if you don't ever use a long term care, then it's just additional death benefit for you. So it's kind of a win win that way. Yeah, absolutely. When shopping for life insurance, what should you look for in an agent, an agency or a policy, I recommend that first and foremost, you talk to family and friends, because you can find that trust built with some people that have already worked with people. And then sometimes we don't get to know our customers or clients as well as we want to, in our fact finding phone call. I obviously don't have trouble talking to people. But there's times where I do. I don't necessarily get the whole story. But so family and friends, definitely ask them if there's anybody that they recommend. But if you're going out on your own, I would look for somebody who is an independent broker or agent, because they have a broader variety to look at for you. And I would hate for you to be put under a microscope for a miniscule amount of companies when there's hundreds of carriers out there. Oh, wow, I would look for definitely an independent agent or broker, I would look for somebody with a certified Long Term Care designation, because they have had that specialized training. And there is little nuances. And questions that come up when you're talking to a person, most specifically like does Medicare cover this Medicaid? How does that work? How does that play into, especially if you're doing a standalone policy? Are you going to use cash? Are you going to use an asset, those kinds of things, having having that specialized education, and then on top of that, we're required to have continuing education to keep that cLTC certification. So we're constantly in the thick of it learning as if we're not, you know, necessarily focused 100% on selling those kinds of policies we do you still keep our education fresh. So I would look for the cLTC certification. So you said something interesting, and I want you to expand on it a little bit.

Kosta Yepifantsev: 18:29

If you get a life insurance policy, and it pays and you're able to afford to pay so that you can have the long term care benefit. Like if you had a hybrid policy, essentially, would you be able to qualify for Medicaid and get medicaid benefits for long term care and also utilize the benefits of your long term care life insurance policy. There you with the Medicaid guidelines being under $2,000 worth of assets, the key to qualify for Medicaid, and I'll kind of practice here. My daughter has special needs and it was born with a birth defect. So I had been providing long term care for a special needs kiddo. And so I'm in the trenches and I wish I could provide some of this coverage for my daughter, but she would not qualify. So I'm I'm coming from a caregiver standpoint, but also as a salesperson. So, ya know, reducing your assets to that$2,000 amount to qualify for Medicaid should not be the goal. It shouldn't be the goal for anybody because you are first of all, depending on your state in Texas, we're community property state. And so okay, you are depleting your spouse if they're still around of some things. Now there are some things that are excluded from that, you know, your main home, things like that, but you don't want to put yourself in a situation where you can't pay bills because you You have to have less than$2,000 in a bank account. And you can't build any generational wealth because you spent all of it on care, and you had to give it to somebody else, so that you didn't have those assets to qualify for, without the look back periods.

Lacey Russell: 20:14

Absolutely. And something else I would kind of shine a light on is not a lot of people realize that Medicare can limit you on where you can go and what benefits you can get. And there's a lot of facilities that don't even accept Medicaid. So, you know, having having that policy there, just opens that door even more, because, you know, depending on what your care needs are, you may need a facility in the closest one to you that would accept Medicaid could be, you know, miles or hours drives away. So

Kosta Yepifantsev: 20:47

what when I talk to people, and I work very closely with Medicaid in the state of Tennessee, and when I talk to people about what they should expect, people that aren't necessarily currently on Medicaid, but we're getting to a point to where we're gonna start having that conversation about retirement planning and long term care, stuff like that. And I always tell them to say, you know, if you rely on the state, if you get Medicaid, then you're not paying for care out of pocket or using some type of vehicle such as what you sell, you lose control, you lose control over the care process. And when that happens, you may be in a facility that you don't want to be in, you may work with an agency that is contracted with Medicaid, but you don't want you don't want to work with that agency. There are so many factors that you could avoid, if you didn't have Medicaid versus if you have Medicaid. So something very important to consider. So we always like to end the show with a call to action. What's your best advice for someone entering the long term care industry as a patient, a caregiver, or an industry professional?

Lacey Russell: 22:03

Okay? That my call to action as a patient would be advocate for yourself. Don't feel like speaking up and saying something is a problem. You always need to advocate for yourself. Absolutely. So that would be my advice to patients definitely do research as well. As care as a caregiver. I rely heavily on Google reviews and word of mouth. So I would say do your research, as a caregiver look into things like respite care, look into day programs and things like that, that maybe are outside of you know, Nest, that obvious scope of needs. Getting a break as a caregiver means the world you know, even if it's an hour to go, you know, walk around the park or something, sure, do your research and find out about help for yourself as well to make you a good caregiver. And as a professional, I would say definitely dig your heels in and get that cLTC there is way too many things to know, on your own. So take a course sit through that class and keep that book by you put it on your bookshelf always refer to it. And don't ever be afraid to say you know what? I don't know the answer to that. But I'll find out. There's, it says a lot as a person for you to be able to admit that you don't know something. And you know, I say that more often than probably I would like to, but I would rather have a customer. appreciate the fact that I admit that I don't know, then just open my mouth and let something fall out. So that's what I would. That's the advice I would give to you guys.

Caroline Moore: 23:53

Thank you for joining us on this episode of Now or Never Long-Term Care Strategy with Kosta Yepifantsev. If you enjoyed listening and you wanna hear more make sure you subscribe on Apple podcast Spotify or wherever you find your Podcasts, leave us a review or better yet share this episode with a friend. Now or Never Long-Term Care Strategy is a Kosta Yepifantsev production. Today’s episode was written and produced by Morgan Franklin. Want to find out more about Kosta? Visit us at kostayepifantsev.com