Long-Term Care is an essential component of comprehensive retirement planning. A spending shock such as a long-term care need can quickly derail an otherwise well-built retirement plan. The problem is that people are living longer therefore making it more likely that some level of care will be needed along the way. According to LongTermCare.gov, 70% of people turning age 65 can expect to use a form of long-term care during their lives.
The costs of long-term care continue to rise and so do the the funding strategies that are available to protect your clients from this risk. A common misperception is that Medicare will help pay for long-term care. Unfortunately it doesn’t. Medicaid will pay for long-term care costs, however only when your clients income and assets are below the residents state eligibility requirements. The lack of long-term care planning can create a finanical stress or even bankruptcy for the surviving spouse. It can also add a burden to the family members as they may end up making large sacrifices in order to provide care for their loved ones.
The term “Fiduciary Responsibility” seems to be used more and more often in our industry. As financial professionals working with clients on a regular basis you face the potential threat of not properly discussing long-term care funding options with your clients. Even if the clients do not want long-term care coverage, or do not want to discuss the topic, we recommend that you document the fact that you had a discussion, or at least attempted to discuss long-term care with your clients. Aggressive legal threats have become a real concern for financial advisors, attorneys, and insurance agents.
Additional information regarding this topic:
– White paper written by Susan W. Aumiller titled:
“Fiduciary, Due Diligence and Long Term Care: Are your financial advisors talking about long term care?”
– White paper written by Chris Orestis titled:
“Dangerous Liabilities Lurk for Families and Advisors in Long Term Care Planning”
Traditional Long-Term Care Carriers
- Genworth Financial
- John Hancock
- Mutual of Omaha