Long-Term Care Insurance Solutions

If we asked you, “Should long-term care planning and retirement asset protection be key components of a client’s financial plan?” – the answer will be yes. And for good reason. At least 70% of those over age 65 will need some type of long-term care services during their lifetime.

Yet, the number of consumers who do not believe they will need long-term care is even more eye-opening: 32% of people over age 40 say it is “not too likely” or “not likely at all” that they will require it.

If so, why do only 13% of Americans, according to the Center for Retirement Research, carry some type of long-term care protection? Most consumers do not believe they will ever need long-term care – it will not happen to them.

But there is another reason, too. A sizeable number of financial advisors and clients lack a clear understanding of the newer LTC products and planning techniques available today.

The reluctance to use the current products is largely due to the stigma associated with older LTC products. Namely, clients don’t want to pay for something they may not use or believe the insurance company will raise the cost of premiums. My 20+ years working for the carriers can confirm the mistakes.  However, pricing today is much more realistic, and the cost of the mistakes have been “baked into” the current rates.

With asset based LTC products, these client objections are no longer valid. No matter what happens, clients are assured of benefiting from their investment, whether it be leveraged LTC benefits, death benefit proceeds, or a return of their premiums. What makes asset based products even more compelling is the guarantee that premiums will never increase.  So, in many cases an “asset based” plan may be the right fit.

A recent case study revealed that 96% of surveyed financial advisors had spoken to their clients about long-term care planning. However, only 50% said they were “very comfortable” with planning strategies that mitigate LTC costs. The other half were either “somewhat comfortable” or “not comfortable.”

Since the current asset based long-term care products put the old objections to rest, given the many solutions available today every advisor can be confident that the new strategies can meet client expectations.

By Ed Stone, Case Design, Annuity, DI & LTC Specialist