Use Disability Income Insurance As A Springboard To LTC Planning

Use Disability Income Insurance As A Springboard To LTC Planning

Disability income and long term care insurance both help protect clients if they become sick or hurt. Discussing the DI product with a client can be a springboard to discussing LTC. For workers who are planning for their senior years, thats an important link to make.

DI insurance is necessary when protecting earnings, and therefore is of paramount importance to both current and future financial plans of a client. LTC insurance is critical in helping to protect the clients assets from diminishing due to the expense and burden of receiving care; this exposure is not covered by any other means of protection.

You, the advisor, already know that. However, clients often do not. The reality is that many clients have an aura of invincibility and denial about them that makes it challenging for financial professionals to discuss these exposures with them.

But there is good news in the DI/LTC story, too. And that is, the market is wide open and you can get in. The place to start is with educationat the workplace.

Disability and life insurance were the leading products sold at the worksite during 2002, according to the 2003 Eastbridge Consulting Group U.S. Worksite Study. In a tough economy, it seems, hard working people develop a stronger appreciation for their income and they are more inclined to protect their ability to earn.

Its no coincidence that benefit administrators have been emphasizing voluntary coverage in recent years. It boosts their offerings and helps employees better protect their financial future.

That said, pre-retirement senior market clients who already have recognized and addressed DI insurance needs are excellent prospects for LTC insurance. These individuals already understand and have prepared for the financial consequences of being unable to work because of sickness or injury. Further, they probably realize that coverage is less expensive when bought at a younger age.

Employees who are new to senior market status are good prospects, too. These workers may find that LTC insurance is becoming an important consideration for themselves and not just their parents. Those in the middle market may be especially interested if they have parents or know of family friends who are experiencing care issues.

But some workers may not have had those experiences or may not realize the meaning for themselves. What to do then? The trusted financial professional can be instrumental in changing the mindset. The advisor can encourage employees to think of their own personal needs and retirement goals, and of how theyve prepared for these needs so far. The advisor can also point out the potential impact a lengthy illness may have on financial plans and the lives of loved ones.

A good place to start shifting this focus is during a realistic discussion of retirement savings and roadblocks that may impede reaching goals.