Despite reports that average life expectancy has declined, many people still plan to keep working past traditional retirement age, whether for financial reasons or because they’d be bored otherwise. This may not be a surprise, but financial advisors need to remember to check in on seniors to make sure they are insured and that they have the right amount of coverage.
The massive baby boomer generation has been aging and reaching retirement for years now, with the last wave turning 50 this year. Financial planners and advisors should be sure to focus on helping these clients plan for a comfortable future, even if – until now – they had no plan in place whatsoever.
Although the linked Life/LTC plan may be an excellent recommendation for some clients trying to meet a life insurance need, or don’t want to be put in a position of “use it or lose it”, simply dismissing traditional LTC Insurance (LTCI) because of past rate increases is similar to not recommending stocks because there was a stock market crash in 2008. It’s a backward-looking attitude based on an emotional versus rational approach to this planning.
The fact is traditional LTCI is here to stay…and not just in the United States. Sales of “standalone” LTC Insurance in advanced economies such as France, Germany, and Canada is strong and will continue to grow.
For many years, the question of whether to add automatic inflation coverage to LTC Insurance was a no-brainer. Traditional LTC policies were less expensive back then, and adding 5% compound inflation didn’t impact affordability for most clients.
Now, however, the answer is not so simple, and advisors should consider whether simply buying more coverage up front is a better strategy, especially for couples age 55+.
November is Long-Term Care Awareness Month
LTC in the News
The word is spreading. Major news outlets are letting the American people know the importance of long-term care planning. Are you? Here are a few recent third-party articles.
- ThinkAdvisor.com – LTC Product Sales Rise 12%: LIMRA
- ThinkAdvisor.com – 3 New Findings About Long-Term Care Planning Prospects’ Emotions
- ThinkAdvisor.com – Planning for Women’s Retirement Health Care Costs
- BrokerWorldMag.com – The Last Word on LTCI… Just Say No
Does your client own long-term care insurance or are they considering purchasing a plan? Then they need to know about the important tax advantages of long-term care insurance. A surprising number of policyholders have the ability to deduct premiums, and those insured also find that the amount of premium that can be deducted increases each year. A big reason is that more and more buyers of LTCI also own Health Savings Accounts and can pay premiums with pre-tax dollars.