How LTCi protects your client’s retirement plans

By James Silbernagel

Some envision their retirement to be a slow and peaceful chapter of life, while others look forward to a full schedule of bucket list adventures or family time. Although it can be exciting to plan for this phase, it’s important to consider the challenges that can be brought by aging, including the type of care that may be needed to maintain quality of life and independence. Helping clients (and their families) plan for these needs is a core responsibility of financial advisors. Long-term care insurance is one tool advisors can recommend to ensure clients enjoy their retirement with peace of mind.

LTCi offers benefits to all, particularly retirees and seniors, by alleviating costs associated with extended care needs. LTCi plans do not cover treatment costs – these policies are intended to cover expenses for long-term care facilities such as nursing homes or assisted living. An LTCi policy is meant to reduce costs for care as long-term care facilities are not covered by Medicare or medical insurance.

When discussing LTCi with clients, it’s crucial to establish a concrete plan for its integration into their elder care strategy. Some clients may believe that they don’t need this coverage, relying instead on their children or existing financial resources. To address these assumptions, ask questions such as, “What is your plan for your elder care in retirement?” or “Would you have enough funds to cover the cost of assisted living and maintain your home?”

From here, you can discuss how their plan would be enhanced with an LTCi policy. Some clients have shared with me that their children offered to take care of them in lieu of planning for a long-term facility. What some folks may not realize is that the kind of care covered by LTCi is not simply finding a home for your elderly family. LTC facilities provide 24/7 care, assisting folks with changing their diapers, lifting them up out of bed, medicine administration and more strenuous tasks. I’ll often introduce these challenges to the family to help them understand why LTCi helps provide security and the best care for their loved ones.

Now understanding the challenges associated with elder care, guide the clients through the purpose of LTCi. Highlight situations where an LTCi policy would be helpful, using scenarios specific to their family and finances.

You can also compare an LTCi policy to homeowner’s insurance. Most people would never dream of purchasing a home without protecting it, yet the likelihood of major property damage is relatively low. Considering the odds of needing long-term care - which are 7 in 10, according to Administration for Community Living - LTCi should be considered equally essential, safeguarding one’s income, assets and health.

Without an LTCi policy, the client may later need to liquidate their assets to meet the expenses not covered through medical insurance. Explaining the policy’s purpose in a clear and relatable way is critical for helping clients see its value and ultimately pursue an LTCi policy.

Financial literacy is paramount, especially in LTCi discussions. Advisors often see clients who passed on certain coverage plans, only to later regret it and cause concern for themselves and their families. It is our responsibility to educate and prepare them for all possible circumstances and encourage them to take advantage of all available protection options, tailoring recommendations to their goals and priorities. By guiding clients through discussions on LTCi, advisors can play a pivotal role in helping them achieve their vision and goals for retirement, while ultimately strengthening client relationships, trust and loyalty.

James J. Silbernagel, CFP, CEPS, LACP, LUTCF, is an independent agent registered with Concorde Investment Services. He has been an MDRT member for 29 years. He is the creator and host of Real Wealth, an online radio program for insurance and financial professionals to educate their clients and keep in touch with them between meetings. Contact him at james.silbernagel@innfeedback.com.