Fantasy vs. Reality in Long Term Care Insurance Planning

In my adult years I have noticed a great shift occurring in the American psyche. And the shift could best be described as accepting theories for facts. In my youth I noticed that people were more skeptical towards hare-brained ideas and schemes. The old adage, “I’m from Missouri, show me!” illustrated the caution that folks had toward new ideas—especially those that threatened the old, accepted ways of doing things. But in recent years, with the expansion and ease of information dissemination, people now are quicker to jump on any information bandwagon that has emotional appeal to them.

There seems to be less concern for the facts than there used to be. If I am correct in this assumption (and it’s only a theory), we have to wonder about the causes. The “information explosion” is one possibility, whereby knowledge in any field doubles in a 3 to 7 year period! This means that much of what you learned in school as a youth is now outdated and needs to be modified. And to keep up with this new knowledge means you must spend an inordinate amount of time doing it, leaving you less time for such mundane activities, such as parenting, recreation, resting and the like. And, of course most of this new “knowledge” is theory. And theories await proof, which requires observation, experimentation, replication and critical thinking. But who’s got time for all that!

Life is short and we’ve got to keep moving. Besides, proving theories is for the experts, and isn’t that what we pay them for? So most of us just “surrender” our critical thinking to the so called experts, while accepting whatever pops into our heads as reality. But the danger is that even the experts, or scientists, are becoming overwhelmed, as are average people. A case in point is the nation’s current economic crisis. It’s obvious that most of the so-called experts don’t know what to do.

A stockbroker friend of mine calls the way we’re currently going about things the Indian medicine man solution, whereby he tosses the bones into the air, and depending on the way they fall, he will act accordingly. He goes on to say if economists were bones, and you tossed them into the air with the expectation that you could predict things depending on the way they landed, they’d all point in a different direction!

The stockbroker further states that, since economics are so complex, and stockbrokers really have trouble predicting what will happen on Wall Street, that they generally run on theories and emotion, rarely reality! Another reason we avoid reality and rely on fantasy is that most of us don’t have the expertise to do otherwise. So we seek help from experts who fail us often as not, leading us to erroneously generalize that all the experts are crazy or incompetent. But don’t mistake my drift here; there are experts who are rational and reality oriented, who make every effort to seek reality.

You just need to cautious in evaluating who to trust. Have you ever stopped to wonder why long term care insurance is becoming so popular—when such insurance didn’t even exist before 1974? That’s when Genworth Long Term Care Insurance began offering such insurance. The question becomes, “Why would they, and other Long Term Care Insurance soon to follow, do something so innovative, when no one had done it before?” The answer is that they had experts—actuaries and statisticians—who knew what they were doing and had a good grasp on insurance reality. And they saw they could make money doing it. No fantasies or theories here—just reality. And what were—and still are—those realities. Number one, the population is aging.

The average life expectancy from 1900 to the present has gone from the 40’s to the 70’s. In the old days people simply died before they could develop many disabling conditions that medical science can now successfully address and improve. Also in 1900 most of America worked on the farm, lived near their families, who assisted in their old age if needed. Nowadays that extended family is almost non-existent, families are spread out all over the country, so other resources developed to care for us when needed. We now have nursing homes, rehabilitation professionals and facilities, rudimentary government programs and various Long Term Care Insurance options that we can use.

It is tragic, but a fact, the family alone can no longer do the job it used to do, primarily because of the high divorce rate and the increase in single parenthood. But a plus side is that people now have more income and thus more financial options. They can purchase long term care insurance to augment the empty holes that might occur in their need for nursing care as they enjoy increasing life spans. And one reality—not fantasy—is that 50% of the people who attain the age of 65 will need some sort of long term care at some time. That is a fact and you can look it up!