November marks Long-Term Care Awareness Month. Now is a perfect time to sit down with your clients and discuss long-term care options for their futures.

Long-term care refers to a wide range of medical and non-medical services – including custodial help with daily activities, nursing care and skilled nursing services – for people who are physically or mentally unable to care for themselves.

Educating Clients about Long-Term Care

Many people delay investing in long-term health care and/or are uninformed of all the different insurance options. Nearly 70 percent of individuals will need some sort of personal assistance after the age of 65¹. Therefore, inform your clients of how they can incorporate preparing for long-term care into their retirement plans with these few tips below:  

Sit down with your clients and help them evaluate their financial futures. Long-term insurance policy costs vary depending on each person’s health status, income and assets.

Policies tends to be less expensive for those who are younger and in good health. Therefore, sit down with your clients, help them determine their retirement goals and show them long-term care insurance pros and cons well in advance of retirement. If long-term care insurance is aligned with to your client’s retirement goals, help them save and budget for that cost.

Planning for Costs

Ask your clients if they will be able to budget for policy premiums now as well as in the future, without breaking the bank.

Premiums can increase overtime, and if your client is not planning on working after retirement, their income may not be able to cover all costs. For example, those whose only source of income in retirement is Social Security benefits may not be able to afford making long-term care insurance payments for the rest of their life.

The cost of plans depend on the amount and type of care an individual needs and where they purchase it. It is your job as a financial advisor to educate your clients and make them aware of all of their possible options.

There are various ways for people to pay for long-term care, contingent on their personal situation.  For example, some people pay using personal resources, long-term care insurance and/or Medicaid for those who qualify. Go over each possibility with your clients and weigh the benefits and risks to help them determine the best plan of action.

Remember, what’s best for one individual, may not work well for another. Therefore, make sure to personalize meetings with each separate client depending on their specific needs and interests. 

Long-Term Care Policy

Finally, if a client does decide to purchase long-term care insurance, make sure they understand the policy that they are purchasing.

Let them know that they can communicate questions or concerns to you. It is important that they understand the contents within their policy.

Sources:

1. Gleckman, H. (2012, June 28) “10 Questions To Ask Before Buying Long-Term Care Insurance” Forbes. Retrieved from: http://www.forbes.com/sites/howardgleckman/2012/06/28/10-questions-to-ask-before-buying-long-term-care-insurance/

2. Education & Outreach (June 2012) “Understanding Long-Term Care Insurance” AARP. Retrieved from: http://www.aarp.org/health/health-insurance/info-06-2012/understanding-long-term-care-insurance.html

3. “10 Things You Should Know About Buying Long-Term Insurance” National Association of Insurance Commissioners. Retrieved from: https://www.michigan.gov/documents/NAIC_Cons_Alert_Buying_Long_Term_Care_Ins_142073_7.pdf