#11 - Unlocking the Secrets of Long-Term Care with Dina Mabry
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Ever wondered if it’s too late to dive into long-term care insurance?
Slide your headphones on and plunge into an enlightening chat as Eric Blake and Dina Mabry peel back the layers of this dilemma, placing a special spotlight on challenges specific to women. Drawing from their combined experience, they provide an in-depth look at the journey to financial security, even if you’re late to the game.
Key Highlights:
- Why the saying, “The best time to plant a tree was 20 years ago. The second best time is now,” could reshape your financial thinking
- Reimagine long-term care: Beyond just nursing homes
- The evolution in modern insurance policies: What unexpected benefits might your beneficiaries reap
- The showdown: Traditional long-term care insurance vs. asset-based policies. Which side will you pick
- Age concerns? From 40s to 80s, there’s a strategy tailored just for you
- A sneak peek into Dina’s offerings: Why one size doesn’t fit all in insurance
- Hear firsthand accounts of how Dina’s knowledge has made a real difference
- And much more!
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Episode Resources:
➡ Join the Simply Retirement Newsletter
➡ Ask a Question
➡ Dina Mabry, LinkedIn
➡ BGA Insurance
➡ dinam@bgainsurance.com
Episode Transcript
Wendy McConnell: Welcome to the Simply Retirement Podcast with your host, Eric Blake. I'm Wendy McConnell. Hi, Eric. I love that quote.
Eric Blake: It's one of those things. We always say that hindsight is 2020 and think we should have taken action a long time ago, but if that's not the case, we can still start with what we know now and take action today.
Wendy McConnell: That's right. If you think you're too late, you're not, but you will be too late tomorrow. So do it now.
Eric Blake: Take action. That's the key.
Wendy McConnell: Eric, who’s joining us today?
Eric Blake: We’re welcoming a very special guest, Dina Mabry. Dina is a life and long-term care and disability insurance solution specialist. Our primary focus is going to be long-term care. What is it and how do you pay for it? This is going to start a series. We’re starting with the most important aspect, which is how do we pay for it and what is it? Then we’ll continue on to some of the different types of care to give you more education on one of the biggest aspects of retirement planning. It's the idea that if you've only got a Plan A and no contingencies, and Plan A fails, what do you do? So, Dina Mabry, welcome to the Simply Retirement Podcast.
Dina Mabry: Thank you so much. I'm so excited to be here.
Eric Blake: Very excited to have you. If it's okay with you, please talk a little bit about your background, how you got into long-term care specifically, and what's your why. We've had conversations in the past and have had a chance to get to know each other a bit. I think you have a great story and I'd love if it you’d share it with the audience.
Dina Mabry: So, I'm a 55-year-old female, and I say that because it puts into perspective that I'm over 50. When my children were young and I was under 50, I was concerned about dying too soon. But when you start inching up out of your 50s and you’re heading towards 60, you start thinking, “What if I live too long? How is that going to look?” I spent most of my early career selling pharmaceuticals. It was a very mom job because I actually had infant formula. I was all about babies and moms and taking care of people.
And that's kind of at the heart of who I am. Three kids, I've been married 31 years, and I'm all about protection; planning and protecting. I had twins in the year 2000, they're 23 years old now, and I pivoted into life and long-term care insurance. What a way to lose family and friends. No one wants to talk to you or hang out with you. I could clear a room by just saying I sell life insurance.
Fast forward to now, I've been doing this since 2007. It is my passion, planning and protecting and talking about the risk and consequences associated with not planning, That's who I am.
Eric Blake: Excellent. Thank you for sharing the story. My first question: With every client, we go through a process where we talk about what their retirement goals are, what their resources are, and what they’re going to do. What's their strategy for paying for healthcare expenses long term?
When I ask them about long-term care, they say they’ve got coverage through work if they get sick or hurt. But that's not really what long-term care is, right? Can you help us understand what long-term care is and why it's important for individuals and families to plan, and specifically women?
Dina Mabry: Long-term care is for if you have an extended health care event. It could be for when you're old or it could be for when you’re young and are affected by a stroke or cancer. It’s for anything that would inhibit you from performing your activities of daily living, or ADLs. What if you can't bathe yourself or toilet yourself? Transfer yourself from a bed to a chair, dress yourself, feed yourself. What if you can't do those things? Who's going to do those things for you? We kind of have a running joke in the office that if you don't have a plan, it's usually your oldest daughter, so let her know that she's your plan and make sure it's okay with her.
Another trigger for an extended healthcare event is cognitive impairment. That's the thing I'm most worried about. I'm involved in the Alzheimer's Association in my community, and though we're making strides and developing great medications to try to slow down the progression, the incidence of Alzheimer's is actually on the rise. One of the risk factors of Alzheimer's is longevity. I want to live a long life, but what if I get Alzheimer's? If you have a cognitive impairment, who's going to take care of you?
Here's the problem. Who wants to talk about not being able to toilet themselves, not being able to transfer themselves out of bed, or losing their mind? No one.
When we have these discussions, the first thing that happens is the arms start to cross. That's my first sign that the client is saying, ‘Not going to happen to me.’ And I say, ‘Well, I hope you're right, but where's your crystal ball? Maybe we should think about it and plan for it.’
What's awesome about the policies that have come out over the past 10 years is that they help people. These policies have a life insurance component to them, which means that if you end up not using it like you say you're not going to, and you never need long-term care, all the premiums that you paid into the policy will be returned to your beneficiary in the form of life insurance. So, let's plan. Maybe you won't use it, but you have it just in case. And if you end up dying peacefully in your sleep when you're a hundred years old and you never needed long-term care, then all your premium money will go back to your family. That's a win-win.
Eric Blake: I've been in this business for over 20 years, and I've sold long-term care policies. I've seen premiums for traditional long-term care insurance skyrocket to a point where people can't keep their policies and end up letting them lapse, and all the money they put into it over the years is just gone. Can you tell us what you consider the top three ways of paying for long-term care?
Dina Mabry: I love hybrid asset-based policies. They're my favorite because all you're doing is repositioning money. They’re like a savings account. You're diversifying your portfolio. You have your house, you have the money that you're investing and growing, and then you have savings and whatever other money is out there. This is just another bucket of money, but it's earmarked for your extended healthcare event.
There's a whole psychology with this. I talk to women all day because they're the ones who are concerned about risk and consequences. They are 71% percent of claimants at Lincoln Financial Group right now, and if you look at a nursing home it's full of women too. Women need to pay attention to this. When we look at these policies, we’re just repositioning assets and creating a dedicated bucket of money for care.
Do you know what that does for your psyche? What that does for your daily life and your planning for living in retirement? It allows you to travel. It allows you to spend. It allows you to have fun. And the reason why is because you don't have that worry in the back of your mind saying, ‘I better not go on that trip because what if I need care? I better save money.’ Now you can say, ‘No, wait a minute. I have that huge bucket of money over there and it's tax-free for my care. I can use my money and enjoy my retirement.’
Eric Blake: Tell me about the tax-free component because I think that part is often misunderstood. How can it be tax-free?
Dina Mabry: This is the best-kept secret. There are a bunch of tax benefits to having a long-term care policy. The first is that all the benefits you get from the policy come to you tax-free. Let's say your benefits are $5,000 a month and you need to put in a claim: You can't bathe yourself, you can't toilet. That money comes, and it really is $5,000 a month. Per the Pension Protection Act of 2006, it’s not taxed. All your benefits are tax-free, even if you have inflation on those benefits.
Most policies are growing, compounding at, let's say, 3% as you're aging. When you have that bucket and you’re 85 or 90 years old and you turn it on, there’s zero tax. The life insurance that we talked about is also a tax-free benefit. So, if you use it, it's tax-free and if you pass away and it goes to your beneficiaries, it's tax-free. And there's also a tax deduction on your tax return for the premium payment. From age 61 to 70, there's an IRS code that indicates how much you can write off per year, and there are stipulations — check with your CPA, because it needs to be a percentage of your medical deductions.
Eric Blake: You brought up the dirty words, nursing home. Many of our clients are women who are going into or navigating retirement on their own. They hear the phrase nursing home and they think that's when we’ve finally gotten to what long-term care is. The first thing that pops into their head is, ‘I do not want to go into a nursing home.’ What can these benefits be used for besides nursing home care? What types of care can this coverage help pay for?
Dina Mabry: That's a great question. I don't want to go into a nursing home either, though I do have clients who say they want to go play bingo. But here's what I want. I want to stay in my house. If I need care, I want to flip on my policy. I want all that money to come in tax-free so I have independence and I can pay a caregiver to come into my house maybe three days a week, maybe four, I don't know, maybe full-time. I want my three kids to be able to come over and hang out and watch Netflix and visit. Not to bathe me, not to toilet me, not to transfer me. That's what I want. These policies are awesome because they are for home care, adult day care, board and care, facilities, nursing homes, wherever you want to be, as long as you can't perform two of those six activities of daily living or you have a cognitive impairment.
Eric Blake: We talked about asset-based solutions, but there are still traditional long-term care insurance policies out there. What should women be thinking about if they need traditional long-term care insurance? What are the key factors that would help distinguish which solutions might be best?
Dina Mabry: So, we need to decide what's really important here. I work with a lot of clients who don't want to pay premiums until they have to file a claim. You could be paying premiums for 25, or 30 years, depending on how long you live. The asset-based hybrid products can be paid for a shorter duration, maybe over 10 or 15 years. It's all really a function of premiums, how much you're willing to put into it, and also your age. I get that question a lot, Eric. People say long-term care is too expensive. And I say, ‘Yeah, getting care is expensive, and a policy is a function of premium. Something's better than nothing.’
I always recommend starting at the bottom. Let's look at something very basic, no need to go crazy. If you cover a portion of your expenses with tax-free money out of a policy, that would be better than having nothing at all.
I do caution that the traditional policies can have rate increases. My own parents just got hit with a very big rate increase from Prudential. Prudential doesn't sell new policies: Theirs is a 12-year-old policy and they got an enormous rate increase. We gave up some of the inflation to keep the premium low. We're coming out of a very low interest rate environment, and that means the carriers haven't made money like they wanted. When they're promising a client a 5% compound, it makes them nervous. So, my parents gave up some of the inflation and got to keep their policy and keep some of their inflation. There are always options, and that’s what I love about what I do.
I'm a broker and I have all the carriers. I joke that I love them and hate them all equally. I don't play favorites. I think having the conversation is important, and so is knowing what's out there. If I'm going to buy a car, I want to test drive all the cars. I want to look.
Eric Blake: I think that's a good point. You have access to all these different carriers. How valuable is it for somebody shopping for insurance to go to somebody like yourself, who has many different carriers available to them?
Dina Mabry: I think it’s really important. There are so many nuances to these products. Most of the products are reimbursement, but some are cash indemnity. Some have a six-year benefit. Some have a five-year benefit. We have one carrier that offers unlimited benefit years, and if you have a genetic predisposition for Alzheimer's, maybe that’s what you should be looking at because eight to 10 years is about the average claimant for Alzheimer's. So, I think it's important to look and shop for what's important to you and your family.
Eric Blake: Excellent. I always like to have our conversation tied to the quote. You always think, if I’d done this 20 years ago, I'd be in much better shape. When you're thinking about age and a woman is thinking she needs to be doing something, what's the earliest or youngest age that you think somebody should be starting to look at long-term care? And what's the oldest that it would still be a reasonable solution to look at?
Dina Mabry: Age 40 is when clients start thinking about it. What's great about a 40-year-old is they could pay it up by the time they're 50 or 60 and be done. So why not? Five hundred a month, maybe move it over, start chipping away at this policy and paying it up. The oldest we can go up to is age 80 for some of our solutions.
The problem is that once we get older, things start breaking down, so we have to shift the underwriting from thinking about dying to thinking about living. The carriers are most worried about people getting around. If you've had joint injections or you need a knee replacement or a hip replacement or you have osteoporosis, those are medical conditions that they won’t accept.
We do have annuities. They're called annuity care. We can position those for older people, maybe over 75. We can look at more of an annuity option, which is still great. You can double and sometimes triple your money. The younger clients really get the benefit because they have the advantage of time.
I'm working with a lady in Florida right now. She's a single female, 55 years old. She's going to pay $6,000 a year, but she's only going to pay for ten years. So, she's going to reposition $60,000. Then it’s paid up, guaranteed, and done. And when she's 85, she's going to have half a million dollars tax-free for her long-term care. So give a carrier $60,000 and you have half a million for care when you're 85 years old. If she needs care along the way, it's there, just not as big. If you're over 40 or 50, start having the conversation. Start thinking about it. Plan for longevity. Let's plan to live a long life and protect your assets, protect your family, protect your independence, and have options when you're older.
Eric Blake: Clarify this for me. When you think about traditional long-term care insurance or life-insurance-based strategies and solutions, there’s a medical qualification of some type. It’s always looking at the individual situation and what strategy is going to be best for that individual, correct?
Dina Mabry: They do.
Eric Blake: Whereas the annuity may not be the optimal solution, depending on the circumstances, but there's not necessarily going to be a medical component.
Dina Mabry: Exactly. Most of the annuity carriers have five knockout questions: Are you on oxygen? Do you use a cane? Do you have trouble getting around? They’re already things you would be using it for. That's the problem. So back to your quote, we need to plan when we're young and healthy because that’s when it’s the least expensive and the best way to get insurance. It makes me super sad when I get a call from a client who's already diagnosed with something and they're saying, ‘I've kicked this can down the road for 20 years. Now I need care. Can I get a policy?’ And I have to say, ‘No, you can't.’
Eric Blake: You gave me an example of somebody you've been helping or working with. Is there an example you can give of somebody where you felt that you made a difference in that person's life, that, that you were able to give them peace of mind or help them sleep better at night? Is there an example where you just say, ‘This is why I do what I do?’
Dina Mabry: I have so many. Now that I've been in the business so long, people are using their policies. I've had death claims along the way and I know we're not talking about life insurance, but those claims have been so impactful because you look at the family and think, ‘Oh my gosh, if they hadn’t bought that policy, think of the devastation this family would be going through financially. They're already going through it emotionally.’
Regarding long-term care, I got a call last week from the son of a couple that I’d sold. It was a traditional long-term care policy with MetLife. The husband had passed away already, he’d only used a little bit of his policy and passed away, but the son was calling to tell me that his mom had Alzheimer's. He thanked me and said, ‘You don't understand. We're getting $8,000 a month tax-free for our mom right now. If we didn't have this policy, I don't know what we would do.’
Eric Blake: That is so great.
Dina Mabry: Those are the kind of calls that I just think, wow. I've never had a call where anybody called me and said, ‘Darn it, Dina, why did you sell me this policy?’ It’s never happened.
Eric Blake: That's awesome. So, how can our audience connect with you, and learn more about your services and what you can do to help?
Dina Mabry: They can call me, text me, email me, go to my website, check it all out. What I love to do is just get on a Zoom call or a phone call and just have a conversation. My phone number is 818-601-3049. 818-601-3049. My email is DinaM@BGAinsurance.com. Our website is BGApremierinsurance.com.
Eric Blake: Excellent. We'll make sure we have all this information in the show notes. Thank you so much for joining us today, Dina Mabry. If you have questions or would like more information about how she can help you and your family, we're going to share this information in the show notes. If you’d like to learn more about Blake Wealth Management, please visit our website, BlakeWealthManagement.com. You can learn more about our team, access all our free resources, our newsletter, YouTube, and if you're a woman who is less than five years from retirement and you have questions about how to optimize social security, minimize your lifetime tax liability, and investing smarter, be sure to click the Start Here button on the website to learn more about our process for helping you make an educated and informed decision about whether we’re the right firm to help you navigate your retirement journey.
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