“Getting parents and children together in a collaborative environment to talk about long term care insurance is an ideal situation,” says Dan Taylor, president of Wealth Capital Group in Charlotte, N.C.
Taylor is the author of “Parent Care Conversation” (Penguin Books, 2006), which provides advice for dealing with the emotional and financial challenges of aging parents. Taylor wrote the book after going through his own decision-making challenges when his father was diagnosed with Alzheimer’s disease. “You want to help facilitate a conversation about the parents’ future, and how they want to be cared for as they age.”
By actively engaging family members, an advisor can help his clients lessen the emotionally charged aspects of the issues and facilitate a productive discussion about long term care options. Here are six ways it can be done:
1. Basic education
“My job is to first generically educate my clients and their family members about long term care issues,” says Sally Leimbach, CLU, LTCP and CLTC, senior long term care consultant for Franklin Morris, a MassMutual affiliate in the Baltimore/Washington area. “I start at the very beginning by explaining that LTCI isn’t ‘nursing home insurance,’ as some people think, but a product that can help provide care at home or in an assisted living or nursing home facility. People who have evaluated the issues and made advance arrangements will have access to quality care and true choice about their preferred type of care. I also explain that for their individual financial situation, LTCI may be the right answer or only part of the answer.”
Leimbach presents a checklist of topics to cover during the meeting, providing her clients with an independent shoppers’ guide for LTCI, an up-to-date Medicare booklet and contact information for the appropriate state agencies. She also makes sure she discusses details like non-forfeiture options and potential premium increases.
2. Emphasize the positive
“I think advisors need to take the words ‘long term care’ and ‘elder care’ out of their vocabularies and never use them again,” Taylor says. “The reason I think LTC can be such a difficult sale is that it’s like selling funeral plans. People know they’re going to need a casket some day, but they don’t want to decide or think about it right now. Long term care is way down on most people’s lists, so I prefer to talk about LTCI as a ‘chronic illness funding alternative.’”
In a more lighthearted approach, Leimbach gives her customers a list of “20 good things that happen as you grow older.”
“Aging is a serious subject, but I also try to add a little humor to all of this,” she says. “There are things on the list like how you’re surer of yourself when you’re older; I want to put this in an optimistic context, which in turn helps people relax. I want to help my clients see that what they’re doing is positive, and it’s so good that they’re planning for their long term care now instead of waiting for a health crisis. I’ve also developed two ‘Top 10′ lists, with apologies to David Letterman; one is the ‘Top 10 excuses for not considering LTCI’ and the other is ‘Top 10 reasons why you should consider LTCI.’”
3. Nudge procrastinators
What about the customer who keeps putting off the decision to purchase a LTCI policy?
“I always raise the issue,” Taylor says. “I explain their decision to delay coverage in terms of what will happen to their children if they get sick: ‘At the worst possible moment, with every type of stress happening, your children are going to have to make very difficult decisions and take care of you; you’ve put them in a very traumatic situation during a crisis. If you don’t want to talk about this and plan for it, it severely limits your relationship.’”
Leimbach, who has specialized in long term care products for 15 years, shares real-life anecdotes about what happened to procrastinators. “I’ll talk about a client who put off the decision until it was too late; then he developed a chronic medical condition, and was no longer insurable,” she says. “I put that in context by sharing examples of how the policy helps people, too. For instance, I had a 64-year-old client, a retired schoolteacher who moved to a small village on the East Coast. Two years later she developed brain cancer, but she was able to receive care at a facility that was near where her daughter lived. My client lived another two years, she was covered the whole time and had excellent care, and her daughter was able to spend a lot of time with her.”
The other huge issue that discourages waiting to purchase the policy is pricing, Leimbach says. “Healthy people get a discounted rate, but as they age, the rates go up. There’s also what I call ‘rate creep,’ which is that every 18 to 24 months the major companies come out with new policy forms and the rates are sometimes 15 to 40 percent higher than before. Waiting to purchase the policy can be a very costly decision.”
4. Realistic expectations
Advisors can help clients tackle difficult subjects. For instance, how to handle the parent who asks his children to “promise you’ll never put me in a nursing home.” Taylor says it is common for people to resist institutionalization for their care, and recommends family members respond with something like, “I promise I will seek the highest level of care for you when the time comes. Now, let’s talk about what will keep you out of the nursing home.”
“While I always hope my clients won’t go on claim for a long period of time, it’s unrealistic for anyone to expect that they’ll never have to go to a nursing home,” Leimbach says. “I explain that while very few people have to permanently move to a nursing home, the reality is that if it becomes a necessity, there are many fine facilities today. Assisted living is an excellent alternative, and many facilities now accommodate couples. Regardless, a good LTCI policy can help people make the appropriate choice with their children when the time comes.”
Again, Leimbach uses real-life examples to illustrate the various scenarios. “For instance, I had a client who initially insisted she wanted to have care provided at home at all costs, but her children lived in different states and that decision ended up being inconvenient and stressful for them; an assisted living facility near one of her children was a better solution. Staying at home sounds simple,” she adds, “but it can actually be more difficult for everyone involved if you’re mentally incapacitated.”
5. Multiple generations
Working with a company that sponsors a LTCI program for its employees can be one of the best ways to involve multiple generations.
“Discounted rates usually are available not only to the employee, but also to parents, grandparents, children, and siblings — on the same advantageous basis,” says Leimbach. “When we set up seminars with human resources departments we offer generic programs on the issues and how LTCI works, and we often suggest that these seminars be opened up to family members. Even if family members can’t attend, the LTCI session provides a natural opportunity for employees to broach the subject with their families; they can say, ‘By the way, mom and dad, what are your plans around long term care?’ We’re happy to meet with their family members privately, too.”
6. Golden milestones
Weddings, major anniversaries and significant birthdays are all excellent times to initiate a discussion about long term care coverage.
“I firmly believe that no couple who is marrying for the second time should be without LTCI,” Leimbach says. “There are too many challenging financial issues involved with combining two families. The newlyweds can give their children a wonderful gift by purchasing a long term care policy and allowing them the freedom not to be financially or emotionally devastated if health issues emerge later. It’s also an excellent time for parents to remind their adult children that they need to begin making these types of plans for themselves.”
Leimbach says advisors need to be aware of these important milestones and initiate the conversation about LTCI when money is about to be freed up. “For instance, if a child is graduating from college and the tuition payments are ending, or if the home mortgage is being paid off, some of those dollars can be allocated to a long term care policy. When people retire, the funds they were spending on disability insurance can be redirected to LTCI. I explain that LTCI is something they should plan to carry through the rest of their lives, much like Medicare supplements.
“I’m always encouraging my clients to talk with their families about their care choices,” Leimbach explains. “Whenever I deliver the policy, I stress to my customers that it’s important that their advisors and families know about the insurance, and to make sure they give copies of the policy to them.
“LTCI is definitely a family topic,” she adds, “and bringing everyone together for a conversation is often the most beneficial aspect of the sale.”