 everyone. Thank you for joining me on Think Tech Hawaii. I am Shonda Park, your host for Money Talks. November is recognized as Long Term Care Awareness Month and my guest today is no stranger to the show. She is actually the person who introduced me to financial education and because of the education, my net worth went from zero to millions. On my last show, I had Ken Hurleyhee from One America who talked about a particular Long Term Care product called Acid Care and today I have Reanne Ischevez who will talk about a different product called Hybrid Long Term Care. So Reanne, welcome back to the show. Hi Shonda, thank you so much for inviting me back. Always a privilege to be here on the show with you. Always an honor for me to continue learning from you. So thank you for sharing your time. You're welcome. So yeah, Hybrid Long Term Care Insurance is definitely something that's increasingly popular on the marketplace today. So I'm glad that you chose to talk about this potential solution that a lot of families can look into. Yes, Long Term Care Awareness Month, it's something that I feel this information is greatly needed. So what better time to share it? Yeah, absolutely. And so the reason why they created Long Term Care Awareness is exactly that. They want to bring more awareness to people so that they can start to really look into what it is and what solutions that they can put in place for their families. So before we kind of get into talking about our topic today, let's do a quick review on what is Long Term Care. So if we look at the definition here, it says Long Term Care is a personal and medical care needed if you become disabled due to age or adverse health conditions. So I always, in simple terms, I always like to ask people, think about how your day started. I think I asked you this last time, right, Shonda? How would you start your day today? If you think about it, and in fact, we don't even think about it because it's something that we do. So as a habit, right, how did you start your day today? Jumped out of bed. You jumped out of bed. Jumped out of bed, woke up my son to bring him to school, got him ready, and got myself ready brushing my teeth, showering, you know, the normal stuff. Yeah, but all the normal stuff that again becomes a habit and you don't even think about it. So, you know, when I talk about Long Term Care, it's basically what we do on a daily basis. It's what we call activities of daily living. So if you look at the slide, it will show you, you know, bathing, transferring. You said you jumped out of bed. So can you ever imagine you no longer can do that? You actually need someone's help to be able to get out of bed. That's transferring or getting in and out of, you know, your seat or your bed, bathing, toileting. When we can no longer do that on our own and we need assistance, whether it's due to aging, whether due to chronic health conditions or a disability or an accident, when we can no longer do those things on our own, that is basically what Long Term Care services are for. So I just wanted to kind of quickly review and touch up on that so everyone knows what Long Term Care is. Because I think oftentimes we associate it with medical, which isn't always the case. And so many times it's assumed that our health insurance will cover it, but which, you know, is not actually true. And so that's why it's so important to talk to families about, you know, what solutions are there that's out there that can help them in the case that they need or are ever in this situation. So yeah. And then another thing, you know, is we look at costs, right? So I think that that's probably the biggest thing when we look at, when we start to think about Long Term Care. Because again, we don't know how much care we need. And so when we look at the costs, there's, you'll see that there are many different types of services listed on the cost, right? You can, there's all the daycare center, you know, down to nursing home, whether you're going to be sharing a room with someone or needing a private room, you can see that the annual cost varies pretty greatly, right? And so this is the costs, the average national cost. And you know, in Hawaii, I always say we like to be number one in a lot of things, number one in costs of living. And a lot of times these services cost a lot more in Hawaii. However, you know, I wanted to share with your guests, just give them an idea of what the average national cost is for different types of services that we may need if in case we needed long term care. But I think the biggest question comes down to who will pay for it? Yeah, and always keep in mind with those statistics that Hawaii will always be higher. Yeah, absolutely. And so, you know, and I think that's why just in general across the board, the most common type of care is actually unpaid care. So there are, you know, most families, because if you look at that cost, and the question is who pays for it? A lot of times, you know, many families end up having to take care of their loved ones. And I think in Hawaii, you know, our culture, we definitely want to make sure that we take care of our kupuna, right? Right? Our seniors or our parents or grandparents. But, you know, a lot of times there are, we want to share with families different options so that or solutions so that they have additional options to look into and not just providing care for themselves. You know, because we've seen that usually when a family member has to take care of a loved one, they have to cut their hours, right? So lost, you know, opportunity and their income, you know, they can no longer invest or they no longer can invest into their retirement. Usually it's not just the person receiving the care, there's a financial impact, but on the family as well. You know, just to share with you personally, Shonda, just this year alone, I've had, you know, my OBGYN and my mortgage broker both had to close down their practice because their reason was because they had to take care of their parents, right? Take care of their moms. And so we're seeing that more and more common today where the care that they're providing is through family members. And I think a lot of it is there's different reasons why people want to take care of their loved ones. But a lot of times it's also tied to financial reasons as you can, you know, as we saw, right? How much it can cost up to $100,000 a year or even more. Yeah, that's true. So even the last office that I worked in as a dental hygienist, the other hygienist that I worked with, she retired in the summer of 2020. And when I seen her recently, she actually had both of her parents move in with her because she is now the caregiver. And recently, I also had a really good friend who had her mom. Her mom had her own house. So then she didn't qualify for a certain type of benefits, right? So because of that, she had to move her mom into her home to be the caregiver. And unfortunately, her mom passed several months ago, but she was the caregiver. And most recently, my first cousin, so I recently lost my, my oldest uncle. So she lost her dad. And she actually had to move out of her home to move in with her dad. And she was the caregiver up until he passed away the day before Thanksgiving. So yeah, very, very common. Yeah, definitely very common. And I think that's why it's so important, you know, I think people are really realizing it now because we're having to take care of our, our, you know, our own parents or grandparents. But what about us? You know, I know today, a lot of people are not having children, or maybe even if they have children, because they went through it, they don't want their families to go through the same thing, right? So what is it that, you know, what are their options? And I think sometimes, you know, people are not aware of the different options that are out there, like the hybrid long-term care insurance that, you know, a lot of people may pause, you know, it may not be for everybody, but it's definitely a solution that a lot of people can start to look into. Yes, definitely. So please tell us more about it. Yeah. So, you know, when we hear about the word insurance, right? I think a lot of us are pretty familiar with the two types of insurance, right? There are, there's term insurance and then there's permanent life insurance. So exactly what it means term, it's good for a certain term of our life. And then permanent, permanent, meaning it's supposed to last our whole life, our entire life, right? Whether that we pass in our 80s, hundreds or early on, it's supposed to last our whole life. And so that's the main difference between the two. But when we actually, life insurance today is very similar to cell phones, right? It can do so much more than just the, you know, traditional thought that people have. Well, if I pass away, you know, within this term, whether that's 20 or 30 years, or whether I have a permanent insurance, which will cover me whenever I do pass, most people think it's just going to cover them when they pass away. However, today, a lot of carriers offer what, what we call riders, right? So these riders are what they're like bells and whistles on a plan or kind of like upgrades to your life insurance plan. So much like our cell phone, what kind of cell phone do you have, Shanna? I have an iPhone. An iPhone. A lot of us have iPhones, right? Whether you have an iPhone, but even if you, whether you have an iPhone or like an Android or Samsung, most of our phones can do multiple things, you know, not like before where we could only make calls with our cell phones. Now we can call, we can text, we can take photos and videos. It's a GPS. We can check emails. It's like, it can do so many more things. And like insurance today, you know, when we have riders, it's like being able to do many more things on our insurance plan. So if we look at the riders here, riders are options for which you can add to life insurance, right? That provide additional benefits. So in short, that's really what hybrid long-term care insurance is. It's when you have your insurance, do what it's meant to do, right? Transfer the risk in case something happens. Just like what most people know it's for if you pass away, your beneficiaries will receive the proceeds. However, these riders are additional benefits. People can add to their plans so that it can do so many more things. And so you see here, additional insurance, you can actually have more than one person on an insurance plan. So, you know, there's many different types, but today we want to talk specifically about long-term care rider. Okay, so a long-term care rider, if you see here, I like to show this visual of what we call like the three buckets, okay? So that people can get a better idea of what it actually does. So think about your life insurance. You know, it's something that you pay for every single month. And so what the premium that you pay for, it actually gets allocated to the different buckets, okay? So if we see the bucket here, it says there's, well, there's three main features, right? There's the life insurance, there's the long-term care benefits, and then there's the cash value. So part of the premium that you pay into this insurance plan goes into your cash value because most insurance, hybrid long-term care insurance plans are permanent insurance plans, right? Especially the ones that are qualified long-term care plans. There is a cash value bucket to it. So part of the money that you put in goes into that bucket, which earns interest. Another part of that bucket is the actual life insurance itself. So most people are familiar with, you know, if you pass away, right? That's what we call a death benefit. So those proceeds will go to your beneficiaries. And then what do you mean by that? So permanent meaning, say that again, shall I? For what age? For what age? Actually, it really depends. You know, some people can live till their 80s, their 90s, pass 100 years old. Some insurance plans today are designed to last at least 120 or even longer than that, right? So that's what we mean by permanent. It's not like the term where it's only for a term, right? So most term insurance means it's good for maybe the term that you choose, whether that's 10 years, 20 years, or 30 years. So even if, let's say you're very young and you started your plan at 30 years old and you get a 30-year term, by the time you're in your 60s, that term insurance will expire because it's passed at 30 years versus a permanent plan where the same thing, you started at age 30, but it will last until basically you pass away, right? So that's what permanent means. Got it. Yes. And so the biggest difference between the two is really the permanent insurance always has a cash value bucket to it. And then when you add a rider to it, like the long-term care rider, now it's giving you additional benefits. And so your money goes to the insurance, the cash value, and now also the long-term care. So when you look at those three buckets, you know, it's either you use your benefits while you're still living to pay for things like long-term care, right? So some people even refer to this as living benefits because they're life insurance benefits they can use while they're still living. Or if they never used it, you know, actually the money will still get passed on to their beneficiaries and that's why we call it hybrid long-term care and why it's increasingly popular in the marketplace because people feel like, okay, well, I have peace of mind because if I ever need long-term care, I know that my life insurance plan can cover it. Or if I never need long-term care, I think that's one of the reasons why people don't get long-term care insurance because they think that maybe they don't need it, you know, but the truth is, you know, at 70% of people age 65 and older will need some form of long-term care, you know. 5%. Yeah, that's one in three, right? We'll need some form of long-term care. So it's very highly likely it's just the biggest variable is at what level of care do we need. And so that's where I think that that's the most difficult part about planning. And so when you have a hybrid long-term care plan, you know, it's you have peace of mind in case anything happens to you if you pass away or if you get sick or disabled and need some form of long-term care, at least you know that you can take your benefits while you're still living to cover those expenses because as we saw on the previous slide, you know, it's very costly depending on the care that we need. So let's say someone gets a $500,000 permanent life insurance and they add a qualified long-term care rider. So that's really important. We won't get into that too much today, but if you are looking into a hybrid long-term care plan, you want to make sure that the rider you're adding is a qualified long-term care plan. Okay, and usually how it works is you would be able to get 2% of your designated benefit. Okay, so like for example, if your insurance is $500,000 and out of that $500,000, you want to be able to access $500,000 specifically for long-term care, then every single month you can take out in this example, you can take out 2% to pay for long-term care. So that's about $10,000 a month. Okay, that's pretty significant. You know, for families, at least they have more options, even though we want to take care of our loved ones, but at least maybe we can, it will help pay for daycare during the day, or you can hire a nurse like a few days out of the week. So you have some time, you know, in between, right? So I think having that option for a lot of families will give them a lot more choices when it comes to providing care for their loved ones. Yes, I agree. So personally, so I have a million dollars, one of them for long-term care with 2%. And so that would cover me for $20,000 a month. And some people may look at that as a big number, but when you look at what long-term care costs was in 2000 versus 2020, or even now 2022, and there's a huge, there's a significant increase in what long-term care costs today versus 20 years ago. And if I think about what I may need in 20 years, or maybe even 40 years from now, you know, 20,000 a month, it's not, it's not going to be much, right? And so can you talk about the different percentages because I do have another policy, a long-term care policy for 2 million, and that one is at 4%. So that would be 80,000 plus the 20,000. So total 100,000 a month in long-term care. Yeah, you know, I'm glad you brought that up, Shauna, because, you know, for some people, they feel like, well, 10,000, for some it may be enough, and for some it may not be enough. And what's really great about these plans is that they're flexible. You can choose a different percentages. So say for someone who feels like, okay, well, you know, I can afford a $500,000 plan. However, I still need more long-term care insurance on a, and so you can actually choose your different, the different percentages. Some carriers will allow you to choose 3% or even upwards of 4%. So 4%, that's $20,000 a month. Yes. And so that's very significant. And so having that flexibility, and you, the good thing is that you don't have to claim the entire 20,000. Let's say initially they thought, okay, well, I would need $20,000 a month. However, they find out, okay, well, maybe with, you know, their other sources of income, it will supplement some of the costs, then they don't need as much long-term care, then they don't have to claim the 20,000. They can just take whatever they need. Right. And so that's the other flexible part of the plan. They can choose how they're, up to the maximum that they can claim, or add, while they're on claim, they can choose, okay, I only want to take, you know, X amount because I actually want the long-term care plan to last longer. Right. So it's up to the family how they're going to use the plan, whether they want it to last just for maybe two years to five years, depending on how they draw from the plan. And again, I think that's really why it's increasingly popular because most people have some kind of long-term, I mean, excuse me, most people have some kind of insurance plan. And now having the option to use your benefits to pay for things like long-term care, I think it gives the family peace of mind, knowing that there is somewhere they have, you know, a financial resource they can pull, you know, monies from to take care of their family. And, you know, even as early as 18 years old, my son, I have a 20-year-old son, and as soon as he was eligible to qualify for long-term care, we actually added it to his plan, or we got him a plan that has the long-term care insurance because, you know, I know we talked about 70% of people age 65 and older are likely to need some kind of long-term care. But when you look at people on claim, 40% of those people are under the age of 65. Right. And, you know, I think I talked about this last time too, but I always think back about Christopher Reeves, right, Superman. He was only in his 40s. And so, you know, he had just that unfortunate horse accident, right. And, you know, we just never know when we may need the care. So that's why even something having something like this that's already part of your plan is something to consider whether or not, you know, to be prepared just in case we need to have a plan. We need the care. We always say that we hope that people never have to use it, however. Better to have it in place just in case. Yeah, absolutely. The way I design my plan, you know, I'm never going to have to pay more than from when I started. So whatever I started with years ago, I don't have to worry about that ever changing. And, you know, just putting that in place now years back gives me peace of mind for the future. Because I wouldn't want my I don't want to burden my children. And I've seen the resentment that it causes because of the struggles and just the hardships that that come along with caregiving. You know, I I seen it in in so many families with friends, friends and family members. Yeah. And I'm glad you brought that up, Shonda, because, you know, some people might say, well, your son's only 20, like he may not, you know, like not even need it for a very long time. That's a lot of premium that you're paying into just for long term care. But the truth is with these types of hybrid long term care plans, you're really paying very little so that you have access to those those your life insurance, you know, if in case you need it while you're still living. Yes, exactly. I agree. And it's shocking the high percentage of people that are already on long term care claim between between the ages of 18 and 64. So I feel it's greatly needed at age 18, just to have something in place already. But would you go over the financial foundation next? Yeah, so you know, I just want to share with everyone. This is really the core principle of what we teach here at with World System Builders. We always talk about, you know, your financial foundation, your financial house should be just like your house. You want to build it from the ground up, right? So you always see proper protection on the bottom and proper protection really means income replacement in case something happens to you, right? If you pass away too soon, right? We need some protection from that. If we live too long, we know we may need additional sources of income coming from somewhere else. So you want to make sure you protect your income. But you also want to protect your health too at the same time. In case, you know, again, you're ever disabled or you need some form of long term care services, because when you look at the foundation, it talks also about that management, emergency funding and investment, right? If one, how long term care fits into all of this is, you know, we want to make sure we stay out of debt and not have to, you know, really spend down our emergency fund or investments, because we see that all the time where it really can drain someone's financial assets. And so I do want to encourage everybody to attend any one of our workshops. We always talk about the financial foundation and each workshop covers specifically different topics in the financial foundation, because we want people to really take a holistic approach when it comes to their finances. And so that's why we say we want people to build their financial foundation. Wonderful. Thank you so much for sharing your expertise and your experiences. And you're just so knowledgeable. I always learn so much from you. So if you want to learn more or take the financial workshops, please feel free to contact Raeanne. And you can put her information up there on the screen. And I want to thank everyone for joining us today and we'll see you on the next episode. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram and LinkedIn and donate to us at thinktechawaii.com. Mahalo.