For financial advisors, long-term care can be one of those topics that produces a groan followed by a dismissal. Anyone anywhere near the industry has heard of carriers, products and pricing changes. And the pandemic has forced a change in the way we sell as well. There’s a lot to know about how to help your clients plan successfully.
During our recent virtual LTC U, we covered a lot about LTC. We took a high-level look at the need for planning, and then got down to some of the nitty gritty. Read on to discover some of the highlights of the series. And, if your interest is piqued, check out the replay on demand.
Why You Should Give LTC Planning Another Look
The need for a long-term care plan hasn’t diminished. In fact, if anything, it’s become something that more clients are asking for. It continues to be an emotional subject, and one that can seem overwhelming when clients really start looking into it. To help your clients plan starts with a conversation that is about embracing the emotional aspect, not about selling a policy.
Clients sometimes object that they can self-insure. And, in fact, clients that haven’t planned will end up self-insuring, although unintentionally. But what matters more is whether self-insurance offers the best value. By thinking through the costs of self-insurance versus transferring the risk to the policy, you help your clients develop an intentional plan and avoid eating up in long-term care costs the wealth they want to leave for their children. Long-term care is probably the single largest risk to an otherwise thorough retirement plan.
Long-Term Care Is Not a Place
It’s an event. But when your clients hear long-term care, the first they think is nursing home. With a little education, you can show them all of the options available should a long-term care need occur. And, with people living longer, there’s a greater chance of needing care. One way to bring up the topic is to ask where they’d like to receive care if they needed it.
Designing a Plan
Once you and your client have discussed what they want to have happen, and that they are interested in transferring some of that risk to a carrier, it’s time to design a plan. It’s important to remember that long-term care is not a capital issue, but a cash flow issue, and assets need to be allocated to it.
For most clients, long-term care is a once-in-a-lifetime purchase. They need time to make the decision. So, make yourself available, provide education and follow up, and allow them to move at their own pace.
In addition to your Ash LTC team, we have other resources to help:
And this is just the tip of the LTC U iceberg. If you’re ready to learn more, check out all three days of the replay. The most important takeaway is that you don’t have to be an expert when you have a team of experts behind you. Reach out to your LTC team, here to answer any questions. Just Ask.
Our world is full of complicated information. And the insurance industry is notorious for creating products that can be hard to understand. I’m sure we’ve all had clients suffer from “analysis paralysis” when trying to decide between multiple solutions. But it doesn’t have to be scary.
As advisors, we experience success when we can break down the complexities into a strong solution that the client can understand. And, believe it or not, it IS possible to simplify the way we help our clients fund a long-term care plan.
Once you’ve talked with your clients about long-term care and helped them understand the value of a written plan, it’s easy to stall out. But a written plan is only half the story. If they decide to use an insurance strategy to fund the plan, they will need our expertise to figure out the best way to proceed.
To keep it simple, there are four main categories to consider when finding the funding. Learning about your client’s complete financial picture will be your guide when deciding which funding option to recommend. And, once you’ve got that figured out, your Ash team is perfectly positioned to help create an individual solution for each client. The key is to choose a funding method that won’t force the client to sacrifice lifestyle or other financial goals.
Let’s look at each option, and which type of client it is most likely to fit best.
As advisors, we’re juggling lots of moving parts to create a solid financial plan. The upside is that by understanding the complete picture we’re in the perfect position to take assets from vehicles that don’t meet the client’s needs and use them to fund a long-term care plan. Because without a solid plan for long-term care, the entire retirement plan is at risk. And that’s something to be afraid of.
If you’ve ever seen the movie “Major League,” you probably remember it was about a baseball team made up of the biggest misfits anyone could put together. It was a team built to fail. (Spoiler alert: No, literally – the owner actually wanted the team to lose so they could move to another city.)
“Wild Thing” Ricky Vaughn had a great fastball, but, unfortunately, it was rarely a strike. Pedro Cerrano could hit a fastball into the next zip code … but couldn’t touch a curve ball. Willie Mays Hayes could run like the wind – too bad he couldn’t actually hit the ball so he could run the bases. Plus, manager Charlie Donovan used to manage a tire store … how could he manage to help this misfit team win?
The better question you may be asking is, “What does this have to do with long-term care planning?” Well, let me explain.
First of all, the players on this team were out for one thing: themselves. Their focus was on what was best for them individually, not what was best for the team. They were blind to their real problems. This was especially true for Vaughn – he was literally blind to the strike zone and needed glasses to focus! When the rest of the team realized they were set up to fail, their focus changed, too. They had to come together, drop their old habits, and start focusing on what mattered.
The same is true when it comes to long-term care planning. Both advisors and clients seem to be blind to what matters. I can understand why clients may be blind – we aren’t giving them the right tools (glasses) to focus on what they should really be looking at. As financial professionals, we have to make sure we’re throwing something they can actually hit, not lobbing in lazy pitches.
If we continue along this path, we’ll start walking in runs, losing games (sales), and the team (clients) may move to another city (advisor). So, how do we pitch so our clients can hit homeruns?
The next time you’re ready to pitch long-term care to your clients, grab your Wild Thing glasses and get focused – you’ll win more games and take your clients to the World Series. If you continue to lob your throws across the plate? You’re only setting yourself up to fail.
Chad Eyrich is proud to help keep families together with long-term care planning. He helps advisors and their clients avoid the potential financial devastation of an LTC event by providing strategies around traditional, asset-based and linked-benefit insurance. In addition to earning his Long-Term Care Professional and Certified in Long-Term Care designations, Chad has a life and health insurance license, and a property and casualty insurance license.
© 2018 Ash Brokerage LLC.