There’s a phrase I’ve been saying since I had my first ‘aha!’ moment as a new long-term care (LTC) specialist two decades ago: “Long-term care isn’t about dying, it’s about living!”
That might seem obvious, but in years of listening to advisors and clients I’m frequently reminded of how people think of long-term care incorrectly — in terms of death — but it’s really about the exact opposite.
Long-term care services are rendered with the intent of making life easier! Unfortunately, it has an adverse effect on too many individuals and their families because they don’t plan for it in advance, jeopardizing not only their financial assets but also their own livelihoods.
If you already offer LTC planning services, you know exactly what I’m talking about.
But, unfortunately, too many financial planners — particularly those still new to the field, who may not yet have experience with clients facing long-term care realities — neglect to discuss long-term care with their clients until it’s too late.
Many advisors still do not fully appreciate the financial and emotional issues that surround LTC, mistakenly believing that they can’t help their clients. This perspective couldn’t be more inaccurate.
As my friend and elder care attorney Harley Gordon rightly points out, failing to discuss LTC with your clients also exposes you — the advisor — to risk in the form of reputation loss.
To get the ball rolling, you’ll need to clarify some common misconceptions around LTC and long-term care insurance (LTCI) before developing the right plan for each of your clients. Here are a few questions to get you and them started on better understanding LTC and their future plans.
What does long-term care do?
Long-term care is care that generally extends beyond 90 days and is practical in nature, rather than medical.
Long-term care is the assistance or supervision you may need when you are able to do some of the basic activities of daily living (ADLs) – Bathing, dressing, eating, continence, toileting and transferring that most of us take for granted.
Some policies may even cover assistance of household chores such as errands, cooking, bill paying and other daily activities. For some, services include in-home visits that may be weekly or daily; for others, the care required necessitates 24 hour assistance at a nursing facility. Importantly, LTC is not strictly for the elderly.
Long-term care events can affect anyone — at any age — who requires assistance with normal tasks.
Who pays for what?
If your client expects their health insurer to cover their long-term care needs, they’ve got a lot to learn about LTC.
Health insurance covers very limited and specific services restricted to health care following an acute health issue that typically expires after 100 days.
Medigap policies likewise do not cover care that lasts beyond 100 days (if that). Disability insurance covers only a portion of a working person’s income but does not cover any costs associated with long-term care nor with those who are no longer in the workforce.