When President Ronald Reagan declared November National Alzheimer's Awareness month in 1983, fewer than 2 million people had been diagnosed with the disease. Now, an estimated 5.5 million people are living with the disease, and by 2050, that number could rise to 60 million.1
November is also Long-Term Care Awareness Month, making it the perfect time to plan for conversations about the impact Alzheimer’s and other debilitating diseases can have on retirement plans.
Hopefully, someday a cure for Alzheimer's will be found. Until that time comes, the American public needs to be made aware of the impact this disease can have on them and their family.
According to the Alzheimer’s Association:
- Every 66 seconds an individual age 65 or older is diagnosed with Alzheimer’s
- 15 million Americans provide unpaid care for Alzheimer’s or other dementias
‘Better than average’ planning
Talking about Alzheimer’s with clients can be difficult, but talking about building a retirement plan to survive any long-term care event is a good way to bring up the subject. Studies indicate that people age 65 and older survive an average of four to eight years after a diagnosis of Alzheimer’s, yet some live as long as 20 years with Alzheimer’s.
A good retirement plan considers the possibility of long-term care, either in home or in a facility. But planning for an “average” long-term care event can leave a big gap later in retirement. The average long-term care event lasts just under three years, depending on factors such as age when the event begins, whether a person is male or female, and others.2
More and more as Baby Boomers age, they’re increasingly needing some degree of long-term care for chronic health conditions or other disabilities. About half of the people using long-term care services—either in home or in a facility—have a long-term disease such as diabetes, Alzheimer’s disease or other dementias, or depression. These types of illnesses often last far longer than the average of three years, and may not be anticipated when a person first enters retirement.
Self-funding long-term care longer than five years becomes all but impossible for most people. More likely, they end up spending down assets to qualify for Medicaid, which can leave a surviving spouse or children with little to nothing left of the assets the person built their retirement plan upon.
The non-financial burden on families is high, as well. When Alzheimer’s patients need care, often a loved one is the primary caregiver, especially in early stages. However, 35 percent of caregivers for people with Alzheimer’s or another dementia report their own health has gotten worse as a result of their caregiving responsibilities.2
For clients who’ve planned to leave a legacy behind, long-term care insurance with lifetime benefits becomes the only option for leaving their legacy intact in the case of Alzheimer’s.
Lifetime benefits with guarantees
Lifetime long-term care benefits have become a little like a unicorn – they’re increasingly difficult to find, and prohibitively expensive if you do.
Asset-based long-term care can be an attractive and more affordable alternative to traditional, health-based long-term care insurance when it comes to lifetime benefits. Many people nearing retirement age choose to reposition some of their existing assets to an asset-based LTC policy, which can provide tax benefits as well as a guaranteed death benefit should they not use the full LTC benefits. And with a continuation of benefits rider on an asset-based LTC solution, premiums and benefits are guaranteed.
As a financial advisor, you have an opportunity to raise awareness of Alzheimer’s, share the hope for a cure soon, and help families plan for solutions should they become one of the millions of people who find themselves facing an Alzheimer’s diagnosis and the prospect of years of care.
OneAmerica® is the marketing name for the companies of OneAmerica. Products issued and underwritten by The State Life Insurance Company® (State Life), Indianapolis, IN, an OneAmerica company that offers the Care Solutions product suite. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice.
1 Alzheimer’s Association, 2017 Alzheimer’s Disease Facts and Figures
2 AALTCI: What Is The Probability You'll Need Long-Term Care?, as of Aug. 31, 2017