In these days of economic uncertainty it is essential that people have a sense of security and peace in terms of their future. Long term care insurance is a way to help preserve that.
Millions of Americans rely on financial advisors for help with their retirement and financial planning. If their financial future is at risk they expect their advisors to know about it and take protective measures. Have you fully protected your clients?
Even in these challenging economic times many boomers are looking to retire in the next few years which makes today an opportune time to present the added value of long-term care planning as a part of your practice.
The question is: should your clients continue to self-insure for long term care or transfer the risk to an insurance company like they have done for their home, car, and health?
If a client says they can self-insure you might reply, "Respectfully you don’t actually have $2,000,000. You have $100,000. That's about the income that $2,000,000 will generate annually. Since it is likely that those funds have already been allocated to support your lifestyle and keep financial commitments, the question becomes, “Where will the income come from to pay for care, should it ever be needed?"
"The only way you will be able to pay for both is to either accelerate the draw-down of your portfolio or liquidate investment assets. Accelerating the drawdown may create two potential problems: taxes - if the funds are qualified; and a reduction of the pay-out period which may impact the lifestyle of your surviving spouse or children who may be depending on an inheritance. Also - liquidating investment assets may create unnecessary capital gains tax."Some of your clients are probably in denial about the possibility of needing long term care. This makes it even more difficult to protect their portfolios.
Does it make sense to use less than 1% of assets to protect the other 99%? Don't wait until you clients are uninsurable to decide. Waiting could potentially cost you millions of dollars in lost AUM as your clients use their assets to pay for care.
We have experience working with many financial professionals, assisting them in providing protection for their clients' assets under management. Our goal here is to bring light to the unpleasant reality of long term care so that you and your clients are not at risking a financial disaster.
The best investment is the one you don't have to think about, long term care insurance.
