001[Music] hi I'm on Bridge Run and welcome to this uh Bon briefs episode in this episode um we have an exp Linda Heimer uh who is going to be talking to you a little bit about long-term care insurance uh so I'm often when I talk to clients as most folks know I do nothing but elder law I'm dealing with these issues all the time and this question always comes up how do we try to deal with if somebody either needs nursing home care or needs a lot of Care at home in order to avoid going to a nursing home and for those of you who can in specific situations I really suggest one of the things you got to talk to about is whether long-term care insurance solves this problem so I asked Linda to
002join me to talk about that Linda can you just give the folks who are watching a little background about about you and how you ended up doing this uh and about kind of the who you who you typically see as a long-term care insurance applicant and and and what their issues tend to be and then we can kind of go for ab absolutely so my name as as you mentioned is Linda taller been specializing in long-term care insurance for over 23 years my background is that I am an occupational therapist I have my masters in healthc care administration and I transitioned from healthc care into long-term care insurance when I saw the challenges of of uh the nursing home setting that they were becoming more challenging setting settings to provide uh you know the real
003high level quality of care and so my clients are people who tend to be planners um or have seen the high costs of care and they're trying to figure out how do we stay in our homes longer and better and how do we afford the very expensive cost of long-term care giving us more choices and options um in in a more cost-effective way that's a that's a that's a wonderful quick quick summary and so let's let's just kind of talk about um a couple of things the first I know when people hear long-term care insurance they're thinking nursing homes how do we make sure that I've covered for the nursing home cost and they're not often not thinking about the cost of not being in the nursing home the co which because of which is
004everybody's last possibility oh my God keep me out of a nursing home right um and so and so for those folks can you talk about what what that long-term care policy might offer in terms of Home Care in terms of dealing with assisted livings can you just kind of talk about that for a little bit absolutely yeah so I actually call long-term care insurance nursing home avoidance policies nobody wants to go to a nursing home and the reality is that the nursing home is where people go when they don't have any money those are the settings that are covered by Medicaid home care and assisted living are private pay settings generally speaking and they are very expensive so for example in Massachusetts the average cost in home care is about $37 an hour you can't
005get anyone to walk into your house for one hour of care it will be a minimum of four so you're talking about you know $4,300 a month just to get one hour of care and home care and I usually tell people this is the most important amount of money for a long-term care policy to cover because when you need care and you know you need an hour an hour and a half a care and you have to pay four hours a care people say you know I'll just do it myself and and that is the beginning of the end because families get overwhelmed and then people end up in facility settings sooner than than they would otherwise so having that opportunity to to quickly access care stay in their homes longer and better is great
006um assisted livings expensive right so we're looking at averages in Massachusetts about $6,500 a month you know the nicer ones up around 75 8,000 and if it's a dementia unit It's Not Unusual to find them at $11,000 a month so very close to the cost of nursing home care right absolutely absolutely in fact I tell people that the you know it's in the ultimate planning it is to uh set yourself up so you can go to an assisted living and supplement your care and stay out of nursing homes right because nursing homes have become places for the very sick and the very poor which is not a good Financial mix right right and that you know the the as I spoke to spoken to people about and I remember thinking about it from myself you
007know because I say to myself I have I have so I'm the last of six kids I I have a one my oldest sister died of cancer a couple years ago but she would would have been 89 my next sister is in a nursing home right now excuse me and then he's she's in her mid 80s my next brother should be in a or would be in a nursing home except that he's at home because his wife is taking care of him but it's really hard they don't have a lot of resources and they hate to be and it's a finite pile of res s ources so they're trying to figure out how to manage she doesn't want him to end up in a nursing home but she's killing herself and I and I I
008regularly talk to my clients that say you know when you have a husband who's or a spouse who was going through this the last thing the worst thing you can do for that spouse is die if you die your spouse at that point is a really going to be depressed that you're not there and B is definitely going to a nursing home and and and and I also kind of talked to him about the fact that you know the thing about the nursing home care is that it inevitably there are there are practically no singles in a nursing home so that to the extent that an important part of your life is your privacy right in the best nursing home you can't get it you know because you're in a double and you're you know
009the other person has got their own lives and people are coming in so trying to figure out how to do this home the home pieces are really really important right absolutely now can you can you know one one of the things that people get concerned about though they're talking about the long-term care insurance of course we're always talking about a can I really qualify and then B aren't the premiums going to kill me right so can can you just can you talk a little bit about that right absolutely so let's talk about the the additional protections that longterm care insurance provides most people aren't aware that a very small policy two years $130 a day no inflation even up to a a year of elimination period um for a 55-year-old couple who was not in
010fantastic Health you know they got a little high BL blood pressure a little anxiety they might have had a hip replacement $100 a month for the couple so we're talking very very little money to get a long-term care policy to provide a catastrophic protection which is the protection of your home in Massachusetts by the way that's that's a great that's a great example I do a lot of work um in my own area in matro west but I do a lot of work in the is and N talk in Martha's Vineyard a lot and I told houses are worth2 million you know and and and but I tell people you get this little policy and now your house is Sav it maybe that your other assets may be exposed but you're not your house you
011know yeah so and so in um so actually it was in 1995 I believe that the um in two I'm sorry excuse me 2005 that the um the the law changed bit so you can't hide everything in your house it's a graduating increasing number in your house it's it's about $890,000 that is protected in a primary home and the reason for that was just as you were saying many people were throwing all their money into a home to to to hide it so they are they are trying to cap it but still it's a huge protection and if you have any people in any in the surrounding states like Rhode Island you know for example Connecticut there are partnership policies which you can protect dollar for dooll so every dollar you receive from your policy
012is protected um against your estate um one of the other things that I think is important is a lot of people are concerned about the cost and what I tell people is this is that you know this is all about leveraging the insurance companies are looking at 100,000 people in a room and they're saying how many of these people are going to end up in claim and for how long so there's no question that putting money into a long-term care policy is going to be the strong strongest leveraging of your money as opposed to an investment um and for those who are concerned that they may put money into a policy and not use it we have hybrid policies that return the premium and interestingly those policies have reduced significantly in fact one of those
013hybrid companies have reduced 24% in the last few months due to the high interest rates so there's no better time to be looking into hybrids with this return of premium and within the last month we have the first hybrid cash policy shared so that means that you could have for example eight years of coverage between a couple first one can use all of it first one could use nothing everything's left to the air and if no one uses it the whole premium or greater than the premium is left to the airs tax that's a pretty wonderful yeah that's a pretty wonderful policy so can you talk a little bit about eligibility I know the went the first issue people talk about is premium the other issue is how could I possibly qualify you know and
014and and just talk about so is is there a magic age above which this is really out of the question at this point for you to get a long-term care insurance policy no age is the the least of my concerns um so we're really talking about uh 18 to 84 off as as an opportunity the biggest thing we worry about is health and health does decrease your opportunities although I do have an 83 year-old who just received got a policy so um the the key is that I always tell people they're younger they're better for those people who have lots of money and planning on leaving money in a state I en encourage them to get a long-term care policy for their kids while their kids are young and healthy as as a part of
015Estate Planning and they can you know they can pay it up in a single pay or over 10 years and uh but in terms of this insurability there are home care policies that are not insurance that I help people with that provide home care with no insurability at all as long as you are independent with your daily living skills your community living skills and you're still driving so as long as you can do all those things you could have a mild dementia you could have MS you could Parkinson's you could have had a stroke but as long as in those that moment that you're signing you are independent you can still get that that Home Care policy that's a huge that's a big big deal because I often I once again I'm often talking to
016folks who are saying if you're a couple and one of you needs to qualify for Mass Health because you're in the nursing home I we can shift assets around we can get you qualified into like all cases right the the the issue though is and that there isn't I tell them there isn't Mass health program that will help you try to stay home the frail waiver program right but the problem in that case is that you're so constrained in terms of the caregivers you could get because you're stuck with only the caregivers who have signed on with the regional uh a the regional Aging Services access point as opposed to you really being able to find any caregiver that kind of works for you right but I had no idea until you just said that
017that there existed a policy that could deal with those issues that didn't have the kind of more serious con eligibility constraints to them that a long-term care insurance policy might have yeah absolutely and actually these policies start much earlier um than long-term care so um you know for example I I got this policy uh from my father-in-law when he was uh 85 years old and he start to access benefits at 88 and used him until he was 90 and so the the definition is just that you need help so these are really designed around keeping people in their own home um shopping laundry uh food prep money manage I mean uh yeah it could be money management it can be um food uh preparation and then gradually increasing to the daily living skills and um
018as well so I I try to to tell people when I'm talk toing about this whole cluster of issues they say look your attorney isn't going to be the expert on this you know it's like when people look for me for financial advice I'm going like wrong person you know I understand a little chunk of the world this elder law I don't understand that so so I just really try to encourage them to just to talk to somebody right so do so do do you find yourself just it obviously doesn't cost anything to talk to you right and are you um do you have people like just from all over or are you in a specific geographical area yourself you know yeah so um so I I live in Massachusetts but I am a national
019expert in long-term care and I um provide long-term care uh education as well as as right people across the entire United States and um and so I'm actually a trainer for agents so as well that's great so what I'd like you to do and I know that you know we we'll put up a slide at the end of this right and and so that'll have your contact information for folks that may want to just talk to you about to get more information but in the meantime can you just give folks you know once again a lot of my clients they're still emailing like yeah maybe right so can you just talk about a phone number what is the best best number to reach you sure sure so the best number to reach me at is
020201124 99 and an easy way to remember me is to think about long life planning if you're going to live a long life you need to plan so longlife planning.com and all my information will be there and they can also click on a link and schedule a time and uh but feel free to email or text or call I'm I'm open and I do uh love educating people and helping you make an informed decision with regards to long-term care planning so Linda thank you so much for coming on I really appreciate it so folks once again this is the point about long-term care insurance is like you know you call and you check on and stuff and you know if you get turned down it isn't like they're going to sue you you know you
021just get turned down just no right so you have to check this out this is an important piece of how you may want to think about really protecting your assets for your family that's really the goal of this is to make sure that after you die your that the family gets the assets and not just home just care providers so thank you very much for watching Linda thank you very much for tuning in uh and folks I hope you enjoy this and and and check my website with my my uh YouTube channel once again elder law Frank and Mary to look for other burgon briefs episodes that it may be of interest to you thank you very much perfect thank you so much hi I'm art Bon and welcome to this Bon briefs episode uh
022today we are talking with my friend Scott aen from Cornerstone Bank about an issue or a part a POS a solution to an issue that comes up with my elder law clients all the time as folks know um I always talk about my friends Frank and Mary and their kids Peter Paul and Mary Jr the joke is if you you know if you can get the joke you're old enough to be my client and and their goal which is to live in their house until they die and be buried in the backyard and ideally leave as much as they can to their kids not to the nursing home not to the government to their kids um but what often comes up for my folks you know is you get older and you got a house
023and you killed yourself to pay off the mortgage right or maybe there's a small mortgage left um but you don't have a lot of money you're on a fixed income now you're getting Social Security and pension you got a little bit of cash but you got a house and your goal is to stay in your house forever but it's a house and houses are expensive you know stuff happens with a house it's not $5 dollar it's a thousand a year it's 10,000 there and so you're trying to figure out that and you're also trying to figure out as you get older you know you never never never want to go to a nurs nursing home which means you want to stay in that home and it may be that there are some home things that
024you need to do to make that home safer for you right because I tell my clients you know you can you can live in your home for a long time but just don't fall down you know do not fall down right um or you may just need some help you may just need some personal help and you don't have the kind of savings you know to deal with that personal help so in all of those issues I often tell people I know you say forever and you really want to leave the house to the kids but you want to stay in your house until you die so how do you do that Y and so I asked Scott to come on and talk about those issues so Scott can you just tell us a little
025bit about um you know you and Cornerstone Bank and how the two of you ended up being connected uh and talk a little bit about those issues okay yeah so again like Arthur said my name is Scott Allen I'm the Executive Vice President of retail lenion at Cornerstone Bank uh I I've been with the bank for 11 years you know quarterstone Bank was uh derived from a merger between Spencer bank and southb Savings Bank uh I've been in the financial services industry for over 30 years I worked for larger institutions small institutions in the midwest on the East Coast so I have a broad range of experience and exposure to uh all types of financial issues um you know what what you're talking about with the home equity um it's a big product right now
026for us and we've seen a very big uptick in home equity lending really is around 2021 because interest rates dropped um homes appreciated you know through the roof so there's this wealth of available funds and equity and you know speaking to you know your type of clients qualifying for that and be able to getting that um you can definitely get done and it's easy to do but there are a little bit of nuances to it which we can talk about today Arthur and that's and I kind that's what I'd like to do so you know think think about say so I'm Frank and Mary and I'm trying to weigh my options in in that situation I have the house I have a little bit of extra cash but what I really want in in in
027in in this case which I hope and I try to make the typical case it's not an emergency yet it's not an emergency yet I'm not I don't need a check for $100,000 tomorrow you know but I want but I want to sleep well at night I tell my clients you get to our age you know and fame and fortune has pass Us by you just want to get a good night's sleep right so I want and it's going to help me sleep knowing that I because I think about these possibilities you know what if the roof goes on the house and what if I need a deceptic system or or what if I need I am personally more disabled and therefore either need to change the house to add things you know to add
028whether it is something to get me to the second floor or or flights or whatever or I need some Care at home H how can I how can I sleep better at night yeah and and that's with obtaining a home equity line of credit and ideally they should be thinking about this before they retire during there years of you know higher income it'll be much easier for them to qualify but let's say they've already retired and they're on that fixed income whether it's pension Social Security we can still qualify but we have to qualify him off of that new income stream so it can still get done but we have to look at really their ability to pay it back but the beauty of of those emergencies and sleeping well at night is having that
029home equity line of credit in place because you only will have to pay it back when you utilize it so it's that flexibility and be able to access those emergency funds when you need it is really the main driver why you should have a home equity and retirement so so can you talk talk to me or talk to us it is now you know it's August of 2023 and the rates have gone up you know and and and so can you just talk talk a little bit about if a person came in say they've got their house and it's worth $500,000 not an unusual house anymore right $500,000 no mortgage this Frank and Mary they've got their you know and he's getting Social Security of a couple thousand she's getting half of his so she's
030getting a thousand so they get income about $3,000 a month and once again what I'm telling you you've heard a ion times you know in these kind of variations right C can you just kind of walk it walk Frank and Mary through what the process would be that the that the bank would use if they came in to kind of analyze um what what their what what might be available to them and then if they wanted to to go through with this and use what what I always remember these used to be called Improvement loans or what and I keep thinking home equity lines of credit are helocs right but if they want to be they want to be accessing that what are they going to need to go through to do that how are
031we going to figure out how much they could afford to get as a line of credit I always tell people what this is a social this is like a this is a credit card that's supported by a mortgage you know right so how big a credit card and you get a credit card limit it's a credit card right so how much credit can you get and what are you going to have to go through in order to get it in terms of um of upfront costs and closing costs and any of this Jazz and then down the line how's that going work sure you know how long does the line of credit run for when you know when if ever does this have to get paid off you know as often people are comparing this
032to like a reverse mortgage so you're saying you know you know which where am I going so and I know you're you're you're you're shaking your head but that that's why I want you to understand how why they should be coming to that conclusion sure they would simply you know come in one of our local branches we would sit down with them take maybe 15 20 minutes spill out a simple application then getting into the qual fation process it's really looking at their credit which we're assuming is typically always very very good um how much Equity they have a ton of equity and then we'll look at what their income is you know pay stubs um Social Security pension have they been taking any draws out of their investment accounts and then based on all
033those characteristics we would determine how much they would be eligible for and the mechanics of the helck is there's a draw period and a repayment period and the draw period is typically around 10 years where they can access those funds and draw it down and typically most lenders there is no fee if you don't utilize it all lenders are different um and that that payment is typically an interest only payment which is tied to Prime and granted Prime has gone up but again you're only going to pay and it it's only interest only payments during the draw period and it's only interest only payments on the money that you've used not the entire amount of the line of credit right exactly only amount you use so you want really want to think about you know
034it's not be to be used as an income stream it's really for you know Home Improvements emergencies things like that or you want to help your kids out with a down payment or something major or significant um and typically the there's a margin tie to it whether it's prime plus or prime minus you know Prime minus a half every lender is different and there's a typically a floor rate which is around three or 4% um and and and once again if I were walking in today and you know once this is August of 2023 if I were walking in today about what would that rate look like about well for us we're Prime minus a half so that would be 8% I get it yes Prime is eight and a half um but we also
035have a future where once you open the home equity line of credit you can take a fixed rate advance and lock that in for a period of time whether it's 5 10 or 15 years but you're starting to pay that back and amateuring payment but the advantage of that is it's a fixed payment and a lower interest rate I see I see so so so these when when I think about HELOC I'm thinking about something that's more kind of cut and dry but you're telling me that at at corstone because you're doing a lot of this stuff you're also looking at different variations on that theme really in order to accommodate what the uh what the customer is looking for right exactly and then you get you get into the repayment period That's typically a
036little bit longer than the draw period but at that point in time you can no longer draw on the funds the repayment period runs from anywhere from 10:15 I've seen some as far as 20 and that payment is really an amateurz payment so you're starting to pay back principal and interest and this is a good point to remember for you know Frank and Mary that payment should be or will be significantly higher than the interest only payment right of course because now you're paying back principal so during that qualification process up front we try to qualifying them to avoid what we call payment shock right we don't want to be shocked by a large payment if you have to pay all that back over the repayment period so that's why it's we want to put
037them in you know the the right credit limit knowing they the ability that they have back and and when you're and when you're doing that kind of qualification is your analysis of ability to repay based on the the ability to repay the interest only or or be on the ability to pay if they if they start in that at that point where they're actually having to repay the principle yeah we we try we look at it as far as if they drew the entire credit limit out yeah and that payment during the repayment period so we we are qualifying that much higher than the interest only payment and most lenders do that and they should do that right because that's you don't want to put them in a situation you know and I guess from
038my from Frank and Mary's perspective therefore right if they were if they were doing this you know they they they might really want to be looking at once again H how old they are when they do this because you're telling me that in the typical package you've got interest only for 10 years and then that other thing kicks in and and and and you're saying to yourself well I don't want this other thing to be kicking in and I'm like 90 years old and I've got like and now really because the older you get the more you're kind of stressed in terms of these finances right that's what and that makes sense to look at that up front right so it does and you know the you know you are accumulating debt and like you
039said it is a basically simplistically a credit card tied to your home right and you want to make sure you use it wisely and um you know it's a better tool than say pulling down funds from your investment accounts right especially in a down Market you know you're losing um you know wealth accumulation by pulling those funds out right and it's better off utilizing that helck and then when the market turns around then maybe utilizing those funds to pay back the helck and by not drawing into your investment accounts you you're avoiding you may be a tax implication right because that's the other issue most of most of these folks you've got my classic folks you've got a house and you paid off the mortgage and you've got some tax deferred you've got a you've
040got a 401k that turned into an IRA you you've got some tax deferred so the one of the other advantages I tell people of doing doing the the HELOC is that you're not having to pay income tax on those Reserve funds at this point you may want to kind of save those for later on and you just and you know once again ideally people say yeah but then what if I die and I always say well that solves all the problems dying is not the problem you know living well until you die is the problem right dying solves all issues right so can you you just also just talk a little bit about what's getting they walked in the door and they're thinking about this what's it going to cost them to to do this
041and is it related to the amount that they're borrowing because because once again when they're trying to compare apples and apples you know they're they're looking at this worth versus a reverse mortgage where where the I tell people The Upfront costs are really really high so you you need to really be absolutely comparing right yeah and for us in really most lenders there are no upfront fees for the home equity line of credit unless you get into a a much larger credit limit request or a higher LTV then yeah there might be some cost Associated but it it's it's marginal compared to especially a reverse mortgage or doing a full first mortgage refinance so and there isn't a kind of an expected automatic fee like a point or a percent or two two percent I
042say we we majority of our hel loocks there are no fees to take it out right and then and then I know that also I tend to be the one of the biggest fees on this the the attorneys tend to be big fees when it's when it's a first mortgage right been my experience that's much that's a much lower that's much lower because a lot of that is handled internally when it's a HELOC or a second it is we don't get full title insurance we get a property rund down title report uh you know rarely do we have to get a full appraisal um it's typically just a uh automated valuation um very quick you know typically we close them with less than 30 days it's really a a very simple process for most applicants
043of course you get into the the larger requests or more complicated borrowers um it might be a little more more to it but really not much more and it's pretty straight pretty straightforward so yeah I really appreciate you're doing you know taking the time to do this I think these are these are questions that folks come up with all the time and we'll have a slide that we ask we'll ask you to you know to give us with your your contact information or the contact information for the Bank you know whoever they should be calling but I just I just like you to leave people with so if there are questions who should they what is the number who should they call who should they talk to right yeah they can reach out to me
044directly and uh my phone number is 0945 or if you go to our website Cornerstone bank.com um you can search for our lenders and any of our mortgage loan officers anybody in their Branch can help you with this product um it it's pretty simple straightforward um you going to a local lender that liveing works where where you live I think is beneficial uh my suggestion is to shop around a little bit not all Hecks are traded equal um they're they're very similar in nature but they they can vary from um fees costs um interest rates um so it's important to really investigate those and and check them out and I think heck's a great product you know I I I encourage everybody to have one but they have to be be used responsibly uh and
045carefully uh because you don't want to use it as an ATM so to speak it it is emergency vehicle to help you out when needed and Scott and I know you're you're referring it to as an emergency vehicle but to me it's a sleep well at night vehicle it's that you want to use before the emergency right so you just know that if there's an emergency you're not going through anything you're just you know writing a check you know you're just and and and so I really appreciate you taking all this time you know and and and I hope that that uh that uh if folks have got questions F folks this is something you have to do if you're Frank and Mary if you want to stay at home if you've got limited other
046savings which is most people's situation you need to make sure that your house is available and I know you don't want to take use the money because you want to leave it all to your kids but what they're going to tell you is Ma look and Dad you you saved that money this is your money take care of yourself right and so this is an important tool for us so thank you very much Scott I really appreciate it and folks I hope you you know tune in to our on our YouTube channel you can find any number of these Bon briefs as well as other seminars that we do on other facets of elder law other facets of elder law so thank you so much all right thank you Arthur