Financial professionals who deal with high net worth individuals every day might wonder what worries motivate their clients. As it turns out, high net worth clients are deeply concerned about preserving their wealth into retirement. Longer life spans and increased medical costs make it difficult for people to maintain their savings on a fixed income. While these consumers don’t worry about outliving their wealth, many fear a lengthy retirement will eat into the savings they hoped to pass on to the next generation.
With this in mind, financial professionals should conduct policy reviews that examine clients’ existing life insurance portfolios for gaps that could exacerbate fears about long-term care costs. This represents a potential growth area for producers who want to expand business within their current client base, and could give consumers who expand their coverage valuable peace of mind.
Despite their wealth, high net worth individuals still worry about their savings in retirement. A survey from PNC Financial Services noted high-net-worth individuals were not worried about saving money for retirement, but the majority cited preserving their capital as a top concern. Maintaining savings in retirement could be difficult given the steadily rising cost of health care and the ever-increasing life span of the average person.
Health care costs for high net worth retirees can add up and quickly eat into a millionaires’ wealth, according to The New York Times.
“They have command and control over other aspects of their life, but this is the unknown,” said Bill Hunter, director of retirement strategy for Bank of America Merrill Lynch.
The value of LTC insurance
To alleviate these client fears, financial professionals can conduct a policy review and introduce the possibility of long-term care insurance that can make it easier for consumers to cope with costly medical bills. For high-net-worth individuals, LTC options restore a sense of control over their financial situation. While it is impossible to predict what medical problems will arise, knowing that issues will be covered allows a client to focus on other elements of their financial planning.
Even clients who currently have some form of LTC insurance should be considered for a policy review. These individuals may not have enough coverage for their expenses or could benefit from the addition of a chronic illness rider. With regular policy reviews, financial professionals can ensure a client’s insurance is properly tailored to his or her needs.