Friday, January 15, 2016

YOUR DOG WILL THANK YOU PART II: ‘Continuing Connection’ (Tzavta): Long Term Care & Living Wills

‘Continuing Connection’ (Tzavta): Long Term Care & Living Wills

            Again – some statistics:

  • 19% of those over 60 are orphans – in the sense of no family.
  • the fastest growing segment of companion animal ‘ownership/guardianship/parenting’ is age 50+ with 3 or more dogs and or cats
  • 70% + of our dogs & cats sleep in their guardians’ bed. (Sealy study)
  • Companion animals extend our lives an average of 7 years (AIG commercial)
  • 90%+ of us, in study after study, believe our dogs and cats are ‘members of the family’ (not personal property!)

And yet, especially for those without families, you need long term care assistance even while still living in your house.
What provision have you made for your dogs and cats if your are unable or need assistance in caring for your companion animals?
And what, if you need an assisted living facility or nursing home care – again what provision is made for the care – if you may not be able to fully care for your dogs and or cats?

Of course, each of us wants to continue our connection (tzavta) with our companion animals. And there are two things in particular you can do – to minimize compromising the care of your dogs and cats relative when you are unable to or can’t fully take care of them:
  1. a living will with instructions for example  for home or other pet sitting and
  2. long term care insurance (LTC):

A good estate lawyer – preferably one who has companion animals (rather than one who nods with trying to hide that ‘it’s just a dog look’) – will be necessary to go through all the scenarios, the if then’s etc – in case of – to protect your dogs and cats. This living will should be done in conjunction with your overall estate planning AND the pet trust and pet protection agreement referenced in part I – the previous entry.

As for long term care coverage, let me stipulate:
 1) getting on claim regardless of good carrier or not – is a hassle so build into your mindset hiring legal counsel should the need arise and
2) remember Schwartz’s Insurance provider rule: what good is a Cadillac without any gas that’s in the shop all the time. What this means is you can have excellent coverage per the policy but if the insurer’s financial strength is questionable, and it has a high complaint ratio (multiply by at least 4 as National Association of Insurance Commissioners ((aka The Insurance Complex Revolving Door)) complaint ratio reflects only closed complaints).

That said, the Long Term Care (LTC) coverage offered now is drastically reduced in benefit periods offered awhile having increased cost substantially as the actuaries – again – screwed up on pricing believing in lapse supported pricing.
(The thought the lapse rates on policies would be much much higher leaving those premiums of the policies that lapsed for the claims of people who continued coverage. Like crash value life insurance “Life Insurance Is Hell & Then You Die” that blew up in the late ‘80’s and early ‘90’s the actuaries (cpas without personalities) used lapse supporting in the premium calculations and didn’t learn their lesson. The actuaries will blame low interest rates – certainly a factor – but not an excuse as the lapse calculations failures were deliberate. So when the companies blame ‘low interest rates’ they are trying to escape blame for their own incompetence.)
It use to be one could get lifetime coverage – for nursing and home health care. You will be lucky if you can get 5 years in offerings and at stiff premiums. Furthermore, whereas there was relaxed underwriting when the policies came out initially – the underwriting has become more and more stringent in rating coverage (meaning possible increased costs over standard or preferred premium rates).

That said, it is true – that something like 98% will spend less than 3 years in a nursing home. But it is also true that more likely than not, home health care could be longer (I have no stats on that). And it is very true that cognitive disorders (dementia, Alzheimer’s etc) can go on for 5-7-10 years in some cases – and a 3 or 5 year policy will have been depleted.
(The answer is really a 2 year wait period long term care policy – maybe a shorter period for home health care – with a 15 years or lifetime coverage. But alas, unfortunately my joke about innovation at insurance companies: if you want to commit suicide just stand in the insurer’s lobby at 4:25 PM (when work is over at 4:30 PM) and you’ll be stampeded to death.)

Given the above – carriers to consider – though I am not recommending them (nor do I receive any remuneration from them) – and who knows 20 years from now when the coverage is needed: Mass Mutual, New York Life, and Northwestern Mutual.

Put in place your living will and secure the long term care coverage!
Your Dog and or Cat Will Thank You.


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