Last month the satirical newspaper The Onion published a story that was headlined, “Alzheimer’s Disease Causing Baby Boomers To Misremember 1960s Even More.”
The story, which was centered on a “study” conducted by Dr. Arthur Rothensen from Stanford University, basically poked fun at how boomers have perhaps used a bit of revisionist history when talking about what they did in the 1960s.
In reality, the prospect of Alzheimer’s is no joke for Baby Boomers. Last week, we examined a study by the Center for Retirement Research at Boston College that indicated a potential crisis down the road as Americans struggle to meet health care costs. If real studies are to be believed, Alzheimer’s is a subject that should be broached when advisors are discussing the possibility of long-term care insurance with their clients.
“It seems to me that it’s more prevalent now than ever before,” said Jeffrey Weiss, who heads up The Weiss Group, a financial advisory owned by MetLife. “It’s affecting families that are not prepared for this. It uses up all of the family assets. If there are no children or grandchildren they run out of money.”
There are currently 5.3 million Americans suffering from Alzheimer’s, according to the Alzheimer’s Association. It is the seventh leading cause of death and accounts for $172 billion in annual costs. Furthermore, the association released a report in 2008 estimating that 10 million Boomers will develop the disease in their lifetime.
The age of highest risk for the onset of Alzheimer’s is 65, which could be a hindrance for advisors trying to broach the subject with younger clients.
“It’s tough to discuss something like this when they’re in their 40s because they can’t comprehend it unless they have a parent that had it,” Weiss said. “Young people think they are invincible. You have to do the proper planning and ask the right questions as a planner.”
Weiss said that he has insured people up to their mid-70s, but as mentioned last week, the older one gets the higher the premiums and the harder it is to qualify. Weiss said that financial planners have to do a bit of fact finding with their clients — determine their cash flow, whether they have any sort of inheritance, etc.
Once you have this figured out, you can find a long-term care plan that fits a client’s budget. As far as Weiss is concerned, any sort of long-term care coverage is beneficial.
“I would rather someone has a three-year benefit, which means you are covered for three years when you get sick, than a seven year benefit if they can only afford three years,” he said. “Three years is better than nothing.”
Although clients might be reluctant to discuss the threat of Alzheimer’s, it is important for advisors to stress how expensive care can be down the road. This goes for any disease, obviously. Weiss relates the story of his own mother who was diagnosed with cancer.
“My Dad kept spending money trying to take care of my Mom and he told me that if she continues to live this way we’re going to run out of money,” Weiss said.. “There’s a fine line between taking care of a loved one and then finding that after you worked your whole life you have no money left.”