Insurance in Action
Pondering personal decisions about the financial risks of disability during one's working years or in retirement - and the need for insurance coverage can be daunting and confusing. AHIP's "Insurance in Action" stories put these issues into practical and human perspectives through the personal stories of individuals who have had the need for - and benefit of - disability income insurance and long-term care insurance coverage.
Long-Term Care, Long-Term Security: The Lenore Bible Story
Lenore Brown Bible says she’d be on food stamps if she hadn’t protected her family’s assets with long-term care insurance. Instead, she’s tucked into a cheery, spacious apartment in Coleville, Washington, a farming and logging town of some 5,000. And she’s living it up, at least as much as her age-related infirmities will permit.
Lenore saved her estate by buying long-term care insurance in 1974, 10 years before her husband Ralph’s physical condition became so debilitating that she had to place him into a nursing home.
He died in 1990 and, at 84, Lenore is finally dating again. Her beau is Joe Elles, Lenore’s "first love," as she calls him, from the Colville High School class of ‘34. He’s recently single after a long, happy marriage that ended when his wife passed away. Together, Lenore and Joe are finding their way back into the gentle rhythms of their hometown.
Their mutual agenda includes dining out, rooting for the Mariners, visits with old pals, occasional meals at the senior center, church on Sundays, and long drives through the meadows and pine-clad mountains of this Rocky Mountain enclave.
Lenore’s days weren’t always this comfortable or secure. So, she says, she "grew up looking ahead."
The Brown family was making it—barely—when their father was killed in a logging accident. That was in 1930, when Lenore and her twin brother Leonard were just 14. The family hadn’t had much before, but their breadwinner’s death was devastating.
"Dad didn’t have insurance, so we were left with nothing. That sure helped teach me the value of planning for hard times," she says.
Floyd Bible, a year ahead of Lenore in high school, introduced his brother Ralph, older by four years, to Lenore at a Grange Hall gathering in nearby Myers Falls.
"He couldn’t dance, so I taught him," she remembers with a laugh. "But he had a 1926 Chrysler, a grand big car, and he hauled me, mom, my brothers and sister and anyone else who wanted to go to the Grange, to the movies to picnics and to ball games. They married on October 29, 1938.
Life was suddenly sweeter for Lenore. They moved onto Ralph’s parents’ land and built a home and barn where they lived and worked for the next 15 years until buying a spread of their own in 1953. Ralph built a herd of cows that would eventually grow to 46, a grade A dairy.
In comparison to her previous life, Lenore was now relatively prosperous. Her new husband even took on night work at a sawmill to bring in extra dollars for their growing family.
And grow it did. Ron arrived in 1940, followed by Jean the next year. Kenneth was born in 1943 and, finally, Theresa in 1958.
They didn’t have insurance in those years, Lenore explains, and that made her nervous.
"Ralph’s family was relatively well-fixed and they just didn’t believe in it," she says. "They always made enough to pay for doctors and medicines as they needed them, and they looked at insurance protection as a big waste of money. On the other hand, my family had lived pretty close to the bone, and I was concerned. But to keep the peace, I went along."
She went along, that is, until the ‘70s when her part-time work and the family’s growing prosperity gave her enough "pin money" to buy some security.
"I was bringing in a fair amount, doing alterations for tailor shops and dress shops and making clothes for friends. I salted a bit of that away each month.
"We were going along pretty good," she recalls, "when a friend referred an insurance agent to me. I learned some things.
"He told me that neither Medicare nor health insurance would cover long-term care. If we needed it, Ralph and I would have to pay for that ourselves."
She reasoned that, by the time she and her husband needed the kind of help the policy would provide, their children would be grown and tending to their own families’ needs.
"The more I thought about it, the more I felt that kind of policy would be a good investment. When we needed it, we’d have funds to pay for care in a retirement home or a long-term care facility, or even in our own home."
Recalling her family’s precarious existence following their father’s death, the agent’s reasoning was enough to persuade Lenore. She signed up, for both Ralph and herself.
But she didn’t tell her husband.
"I was in charge of the checkbook," she explains. "I paid all the bills, including the policy. One of the biggest things it brought me was peace of mind. I didn’t have to worry about what would happen to our savings if he or I got sick. And if we needed it, we could pick the kind of care we wanted.
"The alternative was that, if we got really ill, we’d have to spend every penny we’d earned, then accept whatever kind of help the government was able to give us. I didn’t like that option."
By 1980, Ralph’s sixty-ninth year, they decided it was time to quit farming. Ralph and Lenore divided their property into 20-acre parcels then moved to town as they were sold.
During the next few years, she and her children noticed that Ralph was becoming forgetful, vague.
"It was little things: forgetting where he put a tool; that we had an appointment to meet folks; not being where he said he’d be. Things like that."
Over time, his condition worsened, and Lenore found it harder and harder to care for her husband. A doctor finally confirmed what she’d begun to suspect: Ralph had Alzheimer’s disease. Ralph also was diagnosed with Parkinson's.
They’d fallen into a category occupied by an increasing number of Americans. In nearly one-quarter of households, at least one adult is providing care for an elderly person.
In 1984, when Lenore could no longer take care of Ralph at home, she moved him to a nursing home. He was in and out of assisted living facilities for the next five years, but always in decline.
"And the insurance was there the way we counted on it being. All those years, and I never paid a dime."
Finally, on February 13, 1990, he passed away in Colville’s Pinewood Nursing Home, just a few blocks from her apartment.
Looking back, Lenore considers what might have happened: "When I bought the insurance, we were relatively young and, because of that, the premiums were certainly affordable. And when Ralph needed it, the money was there. Without it, we would have been wiped out.
"And I’m keeping up the policy for myself. I have an active life, but I’m probably going to need help before too many years pass. My kids have lives and bills of their own, and I just wouldn’t ask them.
"Besides," she says, "I’m used to taking care of myself—and sometimes, a few others, too."
#####
Investing in the Future: The Maxine Philipps Story
NORTHWOOD, IOWA—When Maxine Philipps bought long-term care insurance in 1993, she didn’t think of it as an investment, but it turned out to be one of the best she ever made.
Before entering the Lutheran Retirement Home in this tidy north Iowa farming community in November 1997, she’d paid $9,480 in monthly installments of $197 over a four-year period. Thus far, she’s collected $80,400, and she’ll receive about $7,000 more. Now that’s the kind of return a financial counselor would feature in full-page ads.
At 91, the retired bookkeeper is tucked into a cozy room that is obviously home. She’s furnished it with a refrigerator, a television set, and the dresser, desk, chairs, and prints that she and her husband Henry cherished during their 40-year marriage. There’s a touch of the twenty-first century, too: a computer that her nephews and nieces bought her. Maxine uses it to stay in touch with family and far-away friends. Without her long-term care policy, says Maxine, which pays nearly two-thirds of the $94 dollar-per-day retirement home fee, her estate would be exhausted. As you might expect, Maxine describes herself as "insurance-minded. There are some people who are insurance conscious and some who aren’t. I am."
Maxine’s decision to buy a long-term care policy was prompted by a visit with her sister and brother-in-law. "He was a good money manager," she explains. "He’d investigated and learned that the policy provides you a choice. Some plans pay for home health care, allowing you to spend a longer time in your own place before moving into a nursing home like this one. And all of them protect your estate," she adds. "Without the long-term care policy, I would have been forced into poverty. I understand that, today, the government won’t take you on Medicaid if you have more than $2,000 in assets.
"And if you get Social Security or any other income, the government takes all but $30 of it each month to pay the nursing home. That dollar a day is all that some of my neighbors get to buy permanents, newspapers, or whatever other incidentals they need or want."
A few years after purchasing her policy in 1993, Maxine began suffering heart palpitations, then took a bad fall. This was followed by four hospital confinements with around-the-clock care. Lingering back pain, bad knees, and macular degeneration combined to convince Maxine that it was time to enter a facility where she could get needed medical care at any time, and where she could get help with everyday tasks, something half of all Americans need by the time they’re 85. Sixty-six of her 83 neighbors in the Lutheran Retirement Home are female, which reflects national statistics: the majority of residents in assisted living facilities are women in their 80s.
As she looks back on the decisions that brought her here, Maxine has only one regret—that she didn’t buy her long-term care policy sooner. "My husband and I saved what we could, and I inherited a bit from an aunt, a businesswoman, who died in California. That gave me a little nest egg, enough to be comfortable. But I’m convinced that, without the long-term care insurance, my life today would be very different."
Maxine adds that once she bought the policy, she had "peace of mind. I knew that, if or when I needed money to pay for my care, it would be there, and I’d have a choice as to where I’d live. My only regret is that I didn’t learn about long-term care insurance earlier, when I was younger. The premiums would have been less, of course. But then again, I did invest in it before it was too late."
#####
Caregiving-The Hardest Job You'll Ever Love: The Ann J. Goody and Rose and Ulmar Chamberlain Story
A recent study conducted in Hawaii found that people who serve as caregivers—those who help others with activities of daily living such as meal preparation, housework, and financial management—do so predominately out of love and compassion. Ann J. Goody, a caregiver for the past eight years to Rose and Ulmar Chamberlain, an elderly couple unrelated to her, personifies those motivations.
Ann, 41, is a registered nurse, former administrator of a home health agency, and one of the founders of the Hawaii Community Caregiver Network. It was during Ann’s years as an emergency room nurse in a Kona, Hawaii, hospital that she first met Rose, who came in with a dislocated hip in 1993.
Rose and Ulmar had moved to Hawaii in 1984 to enjoy their retirement in a warm-weather clime. They didn't have a safety net of investments, so they made ends meet with their two Social Security checks. After all, they'd grown up during the Depression, lived through two world wars, and raised three children each through previous marriages. They knew how to keep their finances and their obligations in balance.
Four years after the move to Hawaii, Rose decided that a Medicare supplemental insurance policy might be a good investment. "I bought the Medigap coverage for nursing home and assisted living expenses," says Rose, "but it has limitations." Those limitations didn’t worry Rose right away, at least not too much. But she had arthritis, and she felt more or less certain that it would become more debilitating as time passed. So when an insurance agent spoke to her one day about long-term care insurance, she listened.
"I like to have control," says Rose, "and this [long-term care] insurance seemed to offer that. It was important to me to be able to receive care in my home." She purchased a policy with an inflation protection provision and a 45-day waiting period.
Later that same year, Rose once again met Ann, who had left the hospital for her position as a home health agency administrator. Rose had developed problems with her hips and knees that required her to seek the agency’s help. When Ann visited Rose and Ulmar to determine what care would be needed, she and Rose recognized one another immediately, and their relationship began to blossom.
The agency began to provide skilled nursing care and rehabilitation, most of it reimbursed by Medicare. "Medicare pays for a limited number of skilled visits to the home as long as the care is medically necessary to follow the physician's treatment plan, the care has a clear end point, and the care is noncustodial," says Ann. "But Rose and Ulmar soon needed help with the more mundane tasks of living—meal preparation, shopping, cleaning, things like that. Safety was not a concern they particularly articulated, but it was a big one for me as I thought about appropriate care for them. What if one of them needed help during the night?"
Ann set up a system of care that included offering free rent to a person who would sleep there at night and prepare breakfast for Rose and Ulmar before leaving for work. That person was "on call" every night but not responsible for care beyond calling the emergency number or Ann, who lived 10 minutes away. Ann arranged a schedule for other custodial caregivers to come into Rose and Ulmar's home during the day to make lunch and dinner, take care of laundry and bedding, do grocery shopping, or take them out. And, from time to time, play a few hands of cards.
"These are the kinds of things people need, but no insurance except a long-term care, disability-based policy pays for them," says Ann. "More people should be buying this protection as part of their retirement planning. Some people say it's better to buy later rather than sooner, but you'd have to be a psychic to know when you're going to need care. If you wait until you need it, you can't get it."
Ann applauds Rose for her farsightedness in securing protection against care costs that could have led to financial ruin. "We're all living longer, and that's the good news. The bad news is that we're facing longer periods of chronic degenerative illness that robs us of independence, mobility, and wellness. It can get expensive, and it's not covered by federal programs."
As Ann and the couple shared more of their lives and grew closer, it became clear that Rose and Ulmar wanted Ann to become more involved in managing the couple's affairs. After Ann had left her job as the health care agency administrator, she accepted an expanded role on one condition: she steadfastly refused to be paid for her services. Since then, Ann has handled everything from paying bills and directing investments to monitoring medication to ensure that the couple's wellness needs are met at the lowest possible cost.
Clearly, the relationship Ann, Rose, and Ulmar share is extraordinary. Most caregivers in the United States don't have the legal or financial power that Rose and Ulmar have ceded to Ann. Most caregivers are family; Ann is unrelated to the couple. Most care is informal and provided by nonprofessionals. Ann is a highly educated medical professional as well as a gifted caregiver. But there are two ways in which Ann is like most other caregivers in the U.S.: she is a woman and she is unpaid.
As rewarding as caregiving can be, it can take its toll. Caregivers employed in other jobs (usually their only paid employment) must juggle caregiver responsibilities with other work. Consequently, they often experience higher absenteeism, which can affect job performance and chances for advancement. "Many women—and caregivers are overwhelmingly women—simply quit their jobs and resign themselves to this new life of nonpaid labor," says Ann.
Happily, Ann, Rose, and Ulmar have a caregiver relationship that has fostered love and admiration.
"She's my angel," Rose said of Ann. "Without that girl, I don't know what I'd do."
Today, settling in to their new home in California, Rose and Ulmar don't worry about keeping a roof over their heads or burdening their children with their care needs. It's all neatly tended.
With her bilateral hip and knee replacements, Rose enjoys the therapeutic effects of the facility's pool. "The doctor a few years ago told me I'd be in a wheelchair," said Rose, "but because of my pool aerobics, and my keeping going, I'm still getting around."
She jokes with the nurse who comes in to deliver medication to Ulmar. The nurse laughs at Rose's good-natured wickedness. "I'm still able to irritate everyone a little bit," said Rose, with a self-satisfied smile. "They seem to enjoy it."
Certainly, she has a fan in Ann.
