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LTC 101

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With the holiday season in full swing and November’s National long-term Care Awareness Month now under way, what better time than now to think about your loved ones and those of your clients?

If they are like most Americans, there’s good news and bad news to face.

The good news is we’re living longer.

The bad news? Perhaps you guessed it already… we’re living longer. The more years we accrue, the more likely we are to require some form of long-term care (LTC) services that can quickly eat away retirement savings and other assets. 

I’ve seen too often in both my professional and personal life how many people are affected when savings for long-term care services are insufficient or nonexistent. As a trusted advisor, you can help your clients and their families by educating yourself on the LTC landscape and passing that knowledge on to them.

It’s not as daunting as you may think and you will earn their trust through a deeper commitment to their future financial, physical and emotional wellbeing.

Here’s how.

Close the ‘Care Knowledge Gap’

The more you and your clients know about the cost and impact of long-term care choices, the more apparent it will become that they need to start planning today.

For instance, 70% of Americans over the age of 65 will require long-term care services during their lifetime[1]. What’s more, the cost for these services can be dizzying: nursing care nears $7,000 per month and home health aides $21 per hour[2]. And that’s on top of other common costs such as housecleaning and transportation.

I don’t have to tell you how quickly savings can (and do) succumb to long-term care costs. Many people incorrectly assume that Medicare will pick up these bills when in reality that coverage is limited to acute short term services (up to 100 days, with plenty of restrictions).

Most Americans aren’t getting this message until it’s too late. Familiarize your clients with sites such as the National Clearinghouse for Long Term Care Information and have them find out the cost of care in their area from the Genworth Cost of Care Survey (now available for your iPad).

Build a Team

Overwhelmed by the nuances of the ever changing long-term care landscape, an advisor in Philadelphia recently asked me for guidance.

Understanding the sheer complexity of current LTC options is daunting for even the most seasoned advisors; it often results in them not starting the conversation with their clients at all.

In fact, only 9% of respondents in a survey said they have discussed long-term care with a financial professional (Genworth’s Our Family Our Future, 2010). This shockingly dismal number should be much higher given the enormous costs that LTC has on the average American household.

My advice to the Philadelphia advisor was simple: take the team approach.

Just as a football head coach surrounds himself with savvy coordinators who are tasked with specific coaching duties, advisors need to bring in outside experts to fill in the LTC gaps for their clients.

Priority number one of any great LTCI specialist/wholesaler isn’t the sale…

I know, I was a specialist for a number of years.

Choose someone whom you trust with your book of business; someone who is there to inform you and your clients on the current realities. They will serve as your best resource when it comes to answering your questions, offering feedback and working with you and your clients to develop the best strategies for them.

Foster trust and honesty 

By addressing the impact that long-term care can have on your clients’ savings, you develop a stronger relationship with them that many advisors miss out on.

It’s a good advisor who ensures their clients are on their way to retirement; but it’s a great advisor who discusses the issues that are likely to impact those portfolios and plans in the future. She knows who is in college right now, who is caring for mom and who can’t wait for their next trip to visit the grandkids.

Get familiar with your clients’ situations, families and future plans to develop a stronger bond and understand how LTC needs may realistically affect them. When the time comes that they want to purchase a product — whatever it may be- they’ll come to you. But more importantly, you’ll know that you’ve listened to their needs, educated them on likely scenarios and provided them with your professional advice that will serve them well for the entirety of their long lives. 

[1] Medicare & You, National Medicare Handbook, Centers for Medicare and Medicaid Services, Revised 12/2011.

[2] Genworth 2012 Cost of Care Survey. Conducted by CareScout® 04/12.

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