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When is the Ideal Time to Discuss Long-Term Care?

The Comprehensive Advisor Newsletter

October 2018


The Comprehensive Advisor understands that conversations about protecting a client and mitigating risk are a big part of providing comprehensive financial advice. For some advisors, knowing when or how to start these conversations is not always easy. At The BluePrint Insurance Services, our commitment is to help you be a more comprehensive advisor and help make those conversations easier. Our goal is to bring simple and actionable ideas that help you increase your revenue and create enterprise value while providing a more comprehensive client experience. In this month’s The Comprehensive Advisor Newsletter we address when and how to start the long-term care conversation along with a summary of possible solutions.


Early is Ideal

 Client conversations between the ages of 50-65 are ideal because when clients are younger they have the most planning options available to them.  We can help educate clients on self-insuring their risk, utilizing a vehicle (insurance), or using a combination to address a potential liability.  Starting this conversation early allows enough time for the client to decide the best path to meet their planning needs. If a client does determine insurance is an appropriate planning strategy, there may better leverage, and the underwriting process may be easier.  In addition, for certain types of client solutions, the accumulation options can be more attractive over time.  We have also experienced that many younger clients have parents that may have experienced a long-term care event.  Many times, this can be an emotional and financial burden, therefore, we know this topic is front of mind.  We also know many clients in this age group do not want to burden their families, want to have choices where they receive care, and address legacy planning by protecting their assets.  If the client is older than 65, you should still have the long-term care conversation, but the discussion may be different depending on age. Either way, we can help with any client conversation and situation.


 "Do You have a Long-Term Care Plan?"

 We get asked regularly the best way to start the conversation. Our answer is simple. Ask them if they have a long-term care plan? The answer to that question will typically lead you down a predictable path. Some clients may not have addressed it or even thought about it.  While others may understand the risk but do not know their options or the steps necessary to address the risk.  Regardless of the answer, the next step is to educate the client and ask the right questions. We always remind the client that the long-term care discussion is not about insurance. It is a conversation about risks, costs, types of care, and how they may have to address the need emotionally. At The BluePrint we have helped simplify the conversation by creating “client conversation” pieces that provide the education and foundation to have these conversations and incorporate them into your planning process.  Our goal is to make these conversations easy and valuable to your clients. If you would like to learn more, please contact us.


Understanding the Solutions

 While there are many solutions or variations in addressing a long-term care need, below is a simple summary of the most common options.

1.  Self-Insurance- This is the most common approach whether it be by choice or avoidance. Self-insurance means the client pays for the costs of care out of their assets.

2.  Hybrid Protection- These policies combine long-term care benefits with life insurance.  They are designed to provide a pool of money for long-term care expenses but also a death benefit and cash value should they never need to use it for long-term care expenses.

3. Traditional LTC Insurance- Traditional LTC insurance is where you pay a premium for a customized policy to fit your needs. There is no cash value or death benefit. Some carriers will offer a return-of-premium if never used if certain conditions are met but typically do not provide anything if you stop paying premiums. 

4. Annuities with LTC Riders- Some annuity contracts will pay lifetime income and increase the income amount should a client enter a nursing home. No underwriting is required but certain conditions must be met.


We Want to Help

 When we ask advisors why they don’t have the long-term care conversation the replies vary.  However, the common theme is that the process to provide the solution seems cumbersome, and they don’t want to jeopardize their client relationship due to mistakes related to something that is not their core business. We get it. Therefore, we offer two ways to help the client. We can help you as the advisor and make the process streamlined. Or (if you are fee-only or just don’t want to be involved) you can refer the business to us as the trusted advisors. In either scenario, we position ourselves as an extension of your team, so the client knows you are their financial quarterback. In both scenarios, you are taking care of the client and doing what’s in their best interest in helping them think through this very important topic.