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Long-Term Care: The Good, the Bad, and the Necessary

Advisor with couple

Long-term care (LTC) is probably one of the most important and perhaps sensitive discussions you can have with your clients. There are so many variables—your client’s actual vs. estimated longevity, current vs. future health, current vs. future lifestyle—each of which change the equation. But it’s also the emotion that’s attached to the discussion; every one of your clients knows they will eventually pass away, but thinking about how, when, and in what way always brings some consternation and even avoidance.

The approaches that you as an advisor can take to this sensitive topic are also numerous. Should you present clients with a total lump-sum amount, based on their current health and predicted longevity, calling attention via sticker shock? Should you narrow focus to smaller, near-term, known costs? Or, should you consider dividing their retirement into three main categories—active years, moderately active years and non-active years1—to soften the conversation? Regardless of your approach, one thing is certain: longevity and LTC should be discussed with all clients, especially those aged 50 or older, as part of a holistic and proactive retirement plan.

According to Investment News’ article Prepping Clients for Retirement Health Costs1, a couple both aged 65 can expect to spend $285,000 to $387,000 on health care costs during their retirement. But these are just estimates and may not include costs for extended health care needs. Advisors must play a significant role in helping clients estimate their personal long-term care costs and how they can stem the flow through LTC insurance. That means being honest, realistic, and sensitive.

Although there is not an exact formula, gathering basic information can give clients a general sense of anticipated future health care expenses. Talk about current health, family longevity, risk for hereditary diseases such as Alzheimer’s or heart disease, even if these conditions haven’t yet presented. Remind clients how medical bills don’t just come from terminal illnesses, but that accidents such as a broken hip can force a stay in a short-term or long-term care facility. Note that the healthier your client is, the higher the total health care costs may be, due to an expected longer lifetime.

Points to discuss include:

  • Current health and lifestyle
  • Family longevity and/or known hereditary diseases
  • Preference of home care vs. assisted living
  • Current outlays for healthcare (before retirement)
  • Change in health insurance coverage and costs (after retirement); i.e., Medicare vs. employer-subsidized health insurance
  • Current utilization of health care (frequent check-ups vs. doctor avoidance)
  • Knowledge of accurate monthly estimates for assisted living, memory care, and nursing home facilities

Helping your clients plan financially for the good, the bad, and the unknown is why you’re there. Your clients need sound, honest, fact-based advice to properly tackle perhaps the most unknown aspect of their retirement. We at Highland are here to help you with that conversation. Feel free to contact our Highland experts with your LTC questions or cases by calling our National Sales Desk: (844) 422-3375, Option #3.

You may also consult with our LTC & Longevity Planning Director, Nancy Simm. Her healthcare experience and product know-how combine for insights that may lead to LTC sales for you. Email Nancy with questions or call her at (860) 470-0220.

1 Investment News, “Health Care Checkup,” October 28-November 1, 2019.
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