Thought for the day:
In a hospital they throw you out in the street before you are half cured, but in a nursing home they don’t let you out until you are dead. – George Bernard Shaw
If you will read no further:
The increased volume of cases coming into our LTCi department is indicative of the unique service we provide to financial professionals. We offer a selection of policies from all of the top tier carriers, provide a spread sheet of rates and benefits to determine the best value, then make a recommendation to present to the client…breaking it down to the simplest parts so that everyone understands and feels comfortable with the information and with the decision they must make. Then we continue by taking the application over the phone, managing the case through underwriting, then sending you the policy with instructions for delivery to the client. In the meantime, we are always here to answer every question for you or your client.
Thought for the week:
“My client(s) can pay for long-term care if they ever need it, so we won’t be purchasing insurance.”
Most financial planners and investment advisors have tended to ignore this issue, I believe, because they are not comfortable discussing the (often) complex insurance contracts with their clients. But how much money should a client have in order to justify ignoring the risk (over 50%) of needing care that could cost upwards of a $quarter million? The average LTCi client will spend $3300/year for benefits of around $250,000. That’s perhaps as much as $82,000 if they live to age 85 or 90 with no need for care. A planner told me his client could pay for it himself because he had over $1.2million in financial assets, so didn’t need to waste money on insurance. So, I’m thinking what if the client was lucky, never needed care and saved the $82,000? In the end, would that “savings” have represented a meaningful part of legacy or would he have just spent the roughly $300 per month on something no one can even remember? If he needs to spend the $250k, that is 20% of his $1.2million. So, you recommend saving 3/10% of the financial assets each year while risking the possibility of needing LTCi sometime during the next 20 years; and forgo (if you are wrong) the advantage of having an extra $1/4million (20%) to assure your client the best quality of life possible. I think no one will thank you for saving the 3/10% each year. But they sure will want to know why there aren’t any insurance benefits available to help with the $6,000 or $7,000 per month LTCi bills.
Oh, and by the way, if you just take 10% of those financial assets and put them safely into a linked benefit plan like MoneyGuard or TLC, the money will be safe and available for any purpose; and if needed it will be increased 3-5 times for long-term care. Believe me; they will definitely thank you for that.