As described in a Wall Street Journal article this past March, “The appeal of long-term care insurance is undeniable.” Financial advisors and agents who help their clients plan for potential impact that long term care expenses could have on their assets should be commended. Yet, in some ways, the job of truly helping the client plan for the future is often left half finished.
Planning ahead for the later stages of retirement involves significantly more than this issue of cost alone. While LTCi will provide dollars to cover some or all of the cost of long-term care major headaches may still lie ahead for your clients and their families if they do not understand the implications of various retirement living choices and which one is most appropriate for them.
Our society is mostly reactive when it comes to the realities that retirees face in the later phases of life. Taking a more proactive approach can save a tremendous amount of headache, and heartache, for families. Advisors who are in the business of planning for long-term care expenses can be a catalyst to help families avoid these difficult situations.
For instance, suppose your retired client is in their early seventies, living at home, and is still independent and healthy. You have already shown the client how long-term care insurance can help protect their assets. But there is much more that the client needs to begin considering.
Does your client plan to age at home? Indeed, the majority of retirees prefer to stay in their homes and LTCi is often sold as a means for helping to accommodate this. But aging at home involves far more than people typically realize or plan for.
Here are a few questions you can help your client begin to consider:
- Does your client have a strong support network nearby, perhaps family members, which are willing and able to be available as needed when your client is no longer able to live independently? (Simply having a paid caregiver available does not necessarily mean that a support network will not be necessary and helpful.)
- If your client ultimately seeks to bring in a paid caregiver who will supervise the caregiver and prevent potential abuses?
- How will your client stay socially active to minimize loneliness? More studies are revealing that that social isolation in retirement is a major factor in declining health.
- Who will manage the process of maintain the home and yard when daily physical activity becomes more challenging?
- Who will manage the process and the scheduling of care and appointments?
- Who will provide transportation to appointments when your client can no longer drive?
- What type of medical and emergency alert system will your client need to put in place? How much will it cost? Who will help watch over paid caregivers and protect against potential abuses?
- And here is a really important one… when the time comes that your client requires a higher level of care than can be provided in the home where will they go? Is your client and your client’s family adequately informed about the various care providers in the area? Do they understand the admittance requirements and procedures? Do they understand the difference between assisted living facilities and skilled care providers? How does the type of insurance they own impact the decision of where to receive care?
These are just a few of the many important questions to ask if you client seeks to age at home. And while you may not be able to help your client address all of these issues you can be a valuable resource simply by encouraging them to begin thinking about and planning for these issues now rather than later.
If your client is considering a retirement community as an alternative to aging at home then you can also help them understand the differences between the various types of communities. Many retirement communities appear similar on the outside but differ drastically when it comes to the range of services, amenities, healthcare, and cost.
In this case here are a few other questions to consider:
- What is your client looking for in a retirement community? What is the main objective?
- Does the community provide assisted living and skilled nursing care on site? If the community only provides limited care where will your client go if they require a higher level of care? What is the cost of care?
- What is the difference between a continuing care retirement communities (CCRCs) and other types of retirement communities such as independent living communities, active adult living communities, and senior apartments? Help your client understand the pros and cons of each.
- If you client is considering a CCRC what type of contract does the community offer and what are the potential implications on your client’s assets?
- How might long-term care insurance impact your client’s choice of retirement communities?
In summary, the senior population is vast and growing. More people will be turning to their advisors for guidance and direction around retirement living and care solutions. Selling a long-term care policy addresses an important part of the issue, but advisors who are able to talk intelligently about the other half of the problem have an opportunity to add real value and create competitive differentiation, and ultimately help their clients and families avoid difficult and emotionally draining situations.
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