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April 01, 2007 at 04:00 PM
Andrew Carnegie sold his steel company in 1901 for $400 million in gold bonds. That can be reckoned at $40 billion today. He had accomplished it by his own efforts. He was the world’s wealthiest senior–age 65 and retired. But he said of that sale: “It was the saddest day of all.”
A clutch of problems appeared. He became despondent because he was out of the blast furnace saddle for the first time. No one needed him anymore. His so-called friends would no longer go to his castle in Scotland (Skibo). He partly coped by giving away almost all of his money to build libraries around the world, but he knew he needed help.
There are hundreds of thousands of Americans who have also become wealthy seniors. They are not Carnegies, but they also face a clutch of problems. Chart 1 lists some of the common ones, as identified by experts in aging, health care, financial services and related fields.
Seniors can be despondent; they may be hypochondriac. Just like Carnegie, they know they need help.
Who can help? Who can be the advisors?
A myriad of candidates appears. But the very experienced brokers/agents in the insurance business are the best. They know how to gain the confidence of those wealthy seniors. They know that the right approach is not product driven; it is driven by the real needs of those wealthy seniors. (Incidentally, wealthy clients are perfectly willing to operate on a fee basis, provided the service is valuable).
To provide services to this wealthy group, advisors need tools suited to this market.
For instance, the advisor should evaluate the senior’s personal health expectancy (an actuarial assessment, like life expectancy). Such evaluations break life expectancy down into 3 parts: the healthy period; the assisted living period; and the skilled care period. Such assessments can be especially good for gaining client confidence–the essential first step–because even if the client has ailments, the healthy period is usually very long. (Example: a 78-year-old nonsmoking female, with type 2 diabetes, shows 6.9 years healthy; 2.8 years assisted living; and 2.9 years skilled care in one of my own computations.)
When clients learn of their own health expectancy, the news often helps overcome despondency. Sometimes confidence is gained, and cruises are booked.
In the process, the advisor can begin helping the senior address his or her ultimate long term care needs, if this has not been done earlier. The renewed optimism facilitates this further planning.
