Financial professionals know how valuable long term care insurance can be for their clients. However, they may come across clients with the mistaken impression that LTC coverage is too expensive or isn’t necessary because they can depend on programs like Medicare. It’s up to financial professionals to educate clients on the fact that LTC insurance can actually save them money, and that Medicare will not offer financial assistance for the non-medical assistance people require as they age.
Cost is too high
Even for high-net-worth individuals, the extra cost of LTC coverage can be a barrier professionals must traverse. Fortunately, financial professionals are in the ideal position to show their clients how spending more now can save them huge amounts later.
Financial professionals can outline the expenses associated with care both in the home and dedicated facilities. Hiring health aides for help with daily tasks such as bathing, dressing, eating, toileting and more can cost an exorbitant amount, severely depleting savings and other retirement income sources. The alternative is for clients to do without the care they desperately need for a high quality of life.
Additionally, producers can outline how the cost of LTC insurance prevents clients from having to dip into inheritance they planned to leave loved ones, or become a financial burden on others if they require extra monetary support of their own.
Financial professionals can also explain the various options available to their clients. Some consumers may believe LTC insurance is a one-size-fits-all type of coverage, but there are many variables at play that can reduce its cost.
Partial coverage, reduced benefits, hybrid policies – clients must understand that there are many ways for them to afford coverage now and protect their finances in the future.
Coverage isn’t necessary
While objections regarding cost can be overcome with facts and figures, it can be more difficult for financial professionals to help consumers understand the very real need for coverage.
No matter their age, many people simply refuse to believe they will ever be in a position where they’ll require dedicated help from professional health workers. It’s only natural for people to not want to consider the possibility that they may one day need help with daily tasks they accomplish easily now.
However, one look at the latest figures from the American Association for Long-Term Care Insurance can help dispel this mistaken belief. Data from the AALTCI shows that 8.1 million Americans are currently protected under some type of LTC coverage, with $6.6 billion in claims being paid out during 2012 alone.
Clients who may believe they won’t live long enough to enjoy the benefits of LTC insurance should also be made aware that the latest data from the Social Security Administration shows a man turning age 65 today can expect to live to 84.3 on average. Meanwhile, women turning 65 will live, on average, until the age of 86.6. Nearly one in every four seniors today will live past the age of 90, and one in 10 are expected to make it past the age of 95.
Finally, producers may encounter clients who believe LTC coverage isn’t necessary because they can obtain Medicare. While it’s true that Medicare can provide LTC services in very specific cases for limited amounts of time, it offers nowhere near the non-medical assistance coverage individuals will likely need in the future.
Allowing consumers to believe Medicare will give them the long term care they need is a guarantee that they will find themselves helpless and unprepared when the day for specialized support eventually comes.
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- Robert W. Finnegan, J.D., CLU®, Published in Trusts & Estates Magazine - June 6, 2018