By: Mark D. Milbrod, CLU-Nov. 2016
Principal, Agent Support Group

By now we have all heard the argument for Long Term Care Insurance.  We know how important it is and why our clients should have it.  The irony is that 95% of the people that should have it don’t, and if a Long Term Care event happens, 95% or all of what someone has built over their lifetime can be gone before you know it.

So, why aren’t we selling more of it?  The truth is that it is a very emotional sale and most people will back off for many reasons, but primarily because it is too expensive and people would much rather spend that money on other things.   There are a host of other objections/excuses that are thrown out to us, such as:

  • “I’m in good health. I’m going to live a long time and won’t need it”
  • “No one in my family as ever needed it”
  • “I’ll drop dead suddenly and not need any on-going care”
  • “I can give away our assets and have the government pay”
  • “I can invest the money and make out better “
  • “My medical insurance will pay”
  • “My kids will take care of me”
  • “I’ll deal with it when the time comes”
  • “I’ll put some extra money away”

Do any of these sound familiar?  I’m sure they do.  What many people don’t realize is that when something does happen, and statistically 6 out of 10 people will require some degree of long term care in their lifetime, it is often financially devastating to the family.  Aside from the emotional toll, savings, retirement plans and homes can be lost.

There are a number of ways to help protect against the financial threat of Long Term Care.  Obviously Traditional LTC Policies are available or the Blended Life Alternatives, such as MoneyGuard and Nationwide Care Matters ( in most states but not NY).  The rates are guaranteed to never change, premiums are paid on a limited basis( single pay or up to a ten pay) and death benefits are possible in most states even if the benefits are exhausted for LTC.   But the product that has been growing in popularity is The Life Insurance Policies with Long Term Care Riders (LTCR’s).  These are available on a GUL or IUL chassis.  What makes these so popular is the fact that unlike a traditional LTC policy, the premiums are guaranteed to never change and if you never go on claim, there is a death benefit ultimately paid to a beneficiary.

These are great policies to sell to clients in their late 30’s and 40’s.  The rates are so inexpensive now that it pays to take care of this planning scenario today.  But the bigger picture is that these clients have parents who are in their 50’s, 60’s and even 70’s.  Does that generation have adequate assets to protect them (or their families) from the threat of a Long Term Care event?

Simply stated, we are living longer today.  With advances in modern medicine, conditions that had previously caused  “sudden deaths” are now resulting in prolonged life that impairs health to the extent that there is a potential need for long term care.  The “older age” segment of our population, which is considered to be 85 and older, is the fastest growing age group in the country.   In fact, over 50% of that age group is receiving some form of long term care.  By 2035, it is predicted that the over 65 population will double to approximately 77 million.  Furthermore, when it comes to provided care, over 75% of the daily care hours are provided in home by family members.

So, when we look back at some of those excuses people have for not buying some type of long term care protection, who will be affected most by those inactions?  The answer is, those clients today that have parents in their 50’s, 60’s and 70’s.  Would it not make perfect sense to bring the topic up to them since statistically something is going to happen to their parents in the foreseeable future?   By planning now, you can help Generation 2:

  • protect against potential loss of future inheritances
  • protect against fire sales
  • protect against lost wages while caring for a parent
  • assure the dignity of loved ones
  • and most of all, mitigate or eliminate the financial burdens associated with the emotional strain of caring for a loved one during a prolonged illness.

Most advisors think they are not in the LTC Market with clients that are in their 30’s and 40’s, but they really are.  It’s all in how you perceive it.  Not only can you help them plan now for their own future while the costs are low but you can Build a Bridge to assist them with an event that can potentially impact them more profoundly, their parent’s long term care event.


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