Proactive Long-Term Care Planning with Clients
Thought Leadership in Action for Life Insurance
Long-term care planning is crucial to ensuring that clients or their loved ones are cared for in their elderly years or if they develop significant medical needs. Some recent factors that make long-term care planning even more important include longer life expectancies and a higher number of people in need of long-term care planning. Older adults are at an especially high risk of becoming disabled; approximately two out of five adults at least 65 years old have a disability.¹
The long-term care industry may strain under increasing demand, but proactive planning can
help reduce stress from emergencies. Let’s explore how long-term care planning works and
how you can help your clients prepare.
What Is Long-Term Care?
Long-term care is generally provided to people with serious health issues to assist them with everyday activities, such as bathing, taking medications, grocery shopping, and other household tasks. Individuals may need to consider the following long-term care factors:
- What type of care is needed?
- Who will act as a caregiver?
- Where will care be administered?
- How much will care cost?
While some opt to use nursing homes, many people choose to receive care in their homes. In these cases, clients may need help finding many types of help, such as transportation services, medical alert systems, home modifications, and companionship services.
Misconceptions about Long-Term Care
People often are uncomfortable discussing long-term care planning, and as a result, it is often
misunderstood. Some common misconceptions about long-term care include:
- Health insurance will cover all care needs. Health insurance will only cover medical needs, which doesn’t include help with daily activities or home modifications.
- The client’s family will take care of everything. The impact on loved ones can be devastating if they are pushed beyond their financial, physical, or emotional limits.
- The client won’t need long-term care. The reality is that most people will need longterm care at some point in their lives, and being unprepared can make the process much harder.
- The client is too young to need long-term care. While most long-term care planning is done for older individuals, the need for care can arise at any age. For example, someone could become disabled during their working years and need care while they recover.
If your clients struggle with the idea of planning for future care needs, you can use the following tips to help them see the importance—if not for themselves, then for their loved ones.
“Help make the conversation as easy as possible by being prepared with long-term care options readily available.”
Tips for Helping Your Clients with Long-Term Care Planning
1. Start the conversation early.
It’s easier to make decisions about long-term care before you need it. You may want to start the conversation with your clients while they are still young and healthy, as they will be more able to make well-informed decisions and have a longer time to execute a financial plan.
2. Approach the topic with professionalism.
While many people are aware of the inevitability of aging, planning for long-term care might not be at the top of their priority list until it’s urgent. It can be a difficult topic for most people to discuss, so approach the topic with professionalism and empathy. Help make the conversation as easy as possible by being prepared with long-term care options readily available.
3. Set goals with the client.
Clients should have a grounded understanding of the probability of them needing long-term care. Do your best to keep the conversation realistic. With their health status in mind, your client should set goals for where they want to live, who can help execute their long-term care plan, and how they will pay for their care.
4. Address the client’s concerns.
Aging clients are typically concerned about the practical side of long-term care planning, such as managing the costs of care or the risks of purchasing insurance policies they might not need. In addition, many people worry about maintaining their independence and health as they get older. Clients also may genuinely believe that long-term care planning is unnecessary. Do your best to validate their emotions, mitigate their concerns, and demonstrate the importance of planning ahead with concrete facts.
5. Include the client’s family.
Many assume that their families will take care of them as they get older, but it’s helpful for all parties to voice their concerns and set expectations. By meeting with both your clients and their families, clients will have the opportunity to express their wishes for long-term care and end-of-life measures, while family members can set boundaries on how much time or money they can contribute.
Long-Term Care Funding Options
The cost of long-term care can quickly become overwhelming. For example, home care services can cost an average of $51,480 per year, while a nursing home might cost around $112,420 per year.² Help your clients prepare for long-term care costs by guiding them through the following options:>
1. Life insurance with an accelerated death benefit.
A life insurance policy provides a death benefit for beneficiaries after your client passes away. However, if they purchase a policy with an accelerated death benefit, the client could also receive part of their death benefit to help cover care costs while they are alive if they are diagnosed with a qualifying medical condition.
2. Long-term care insurance.
As the name suggests, long-term care insurance covers costs associated with long-term care, with variations depending on the type of policy your client purchases. Some may only cover the cost of a nursing home, while others will cover home care, hospice care, and other expenses. However, the cost of long-term care insurance goes up for older individuals and those with medical issues who are at higher risk of needing care relatively soon, so it’s better for clients to buy it as early as possible.
3. Government programs.
There are many government programs available that cover healthcare-related costs, but the benefits of each program vary by state. Your clients can apply for aid from programs such as Medicare and Medicaid, the Program of All-Inclusive Care for the Elderly (PACE), the State
Health Insurance Program (SHIP), the Department of Veterans Affairs, or Social Security Disability Insurance (SSDI) and Social Security Income (SSI).
4. Self-funding.
Some families may have the funds to pay for care expenses out of pocket. For example, they might use retirement income or personal savings to pay for health aides, or family members might provide as much care as possible. However, this is generally a temporary solution that can be difficult for families to maintain.
Creating a Long-Term Care Plan with Your Clients
Using your knowledge and your client’s goals, create a long-term care plan that can help your client understand the costs and how they can pay for them. As a financial professional, you can help find policies that fit their needs, but you also can go above and beyond by checking in periodically to reassess their needs and strategies.
Chad Bachorowski, CFP®
Pacific Life
Field Vice President
Chad Bachorowski is a Field Vice President at Pacific Life with over 20 years of industry experience, supporting life insurance sales across the Northeast. He resides in Farmington, CT, with his wife, Kristen, their daughter, and their dog, Pepper.
Broad Market Sales Desk
LynInternalSales@PacificLife.com
(888) 900-9777
The Power of Pacific
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