Q. I work with many prospects who can afford to self-insure. Do you have a close to recommend that works in those situations?
A. Many people think they can self-insure. Closing these prospects and convincing them that this insurance makes good economic sense and that self-insuring is probably not a good idea can be a challenge.
Harry Crosby, a long-term care insurance (LTCI) agent, coach and trainer, has developed a method that he calls “The Two Mistakes.”
Here is what he says to prospects who are reluctant to say yes to purchasing long-term care protection.
There are really only two mistakes you can make with long-term care.
Mistake number one: You get one of these plans. It doesn’t matter which one. You buy a plan, pay every year, live a long happy and healthy life, die in your sleep with a smile on your face and the money you paid in is…
You now pause, and many times they will answer by saying the money is gone. Right. The money you paid in is gone. Had you known that this would be the case, you would never get a policy.
Mistake number two: You stay self-insured, which is what you are doing right now. Then one or both of you need care. Not only do you pay for it yourself out of your pocket, but the rest of the burden is placed on your family.
Let’s look at the two mistakes.
Mistake number one.
Let’s say you get this plan, and your premium is about $1,800 a year. You live another 30 years, and at age 85 you die in your sleep with a smile on your face never needing a day of care and thus never getting a dime out of the policy. You get to the pearly gates, they look at your file, and they laugh at you, because you made a $54,000 mistake for having this policy and never needing it.
By the way, that amount is considerably less than one year of care in today’s dollars.
Now, mistake number two. You decide to not get this policy and roll the dice. Twenty years from now, when you are 75, you need care for just three years. You pay for the care out-of-pocket. Based on past trends, the average cost of care will be about $435,000.
If you have to make a mistake, which mistake has the least impact on your family the first one or the second one?
The response. That is why top financial advisors and the federal and state government encourage people like you to look into LTCI. It is just common sense.