One of the biggest challenges is engaging in conversation with your prospects and clients about long term care. It is a very emotional topic for advisors and consumers alike. Many of us specializing in the retiree market have chosen to sidestep the issue. I believe those days are coming to a close. We have to talk about it. The question is . . . how does today’s advisor in the senior market begin this conversation and what should he/she talk about? Let’s explore.
There is no doubt in my mind that a traditional LTCI policy with a 5 year benefit with cost of living rider and return of premium rider is the best deal. Wow! That’s a mouthful. That may be enough for you to quit reading this article. Where do you turn? Which company? How’s the underwriting? What about declination? What about rising premiums? There is a way for you to put your toe in the water. The ‘solution’ I am presenting is not the cure all. It is also not the most comprehensive answer. But like high deductible major medical insurance, something is better than nothing. What is this solution?
Allow me to introduce you to an annuity with a Long Term Care Rider. There are a few companies with this fixed annuity/LTC rider product. There are also many on the drawing board. In its simplest terms, it is a product that first uses your client’s account value to handle LTC needs. It then offers to match or double the benefit through the use of a rider. The premium for this rider is deducted from the account value. Underwriting is less restrictive, premiums are usually lower and it is not a “use it or lose it” policy. The account value of the fixed annuity is available to your client should they desire to surrender. It provides your client with coverage in the event of disaster and it is easy to ‘talk about.’ It will also keep you out of hot water and litigation should your client need coverage and the heirs find out you never discussed the issue. Plus, it’s the right thing to do.
Some in our industry might see this situation as a problem to deal with. I view it as a tremendous opportunity. We have many retirees that can’t afford or refuse to pay long term care premiums. This solution gives them the necessary coverage, allows you to fill the gap in their financial plan and will allow both the client and you to sleep well at night. What’s the first step? A little education on your part, a modification to your marketing plan and a little conversation. Not sure where to start? I’ll give you a hint: Pick up the phone,
give us a call and let’s talk. Because if you don’t someone else will.
Allow me to introduce you to an annuity with a Long Term Care Rider. There are a few companies with this fixed annuity/LTC rider product. There are also many on the drawing board. In its simplest terms, it is a product that first uses your client’s account value to handle LTC needs. It then offers to match or double the benefit through the use of a rider. The premium for this rider is deducted from the account value. Underwriting is less restrictive, premiums are usually lower and it is not a “use it or lose it” policy. The account value of the fixed annuity is available to your client should they desire to surrender. It provides your client with coverage in the event of disaster and it is easy to ‘talk about.’ It will also keep you out of hot water and litigation should your client need coverage and the heirs find out you never discussed the issue. Plus, it’s the right thing to do.
Some in our industry might see this situation as a problem to deal with. I view it as a tremendous opportunity. We have many retirees that can’t afford or refuse to pay long term care premiums. This solution gives them the necessary coverage, allows you to fill the gap in their financial plan and will allow both the client and you to sleep well at night. What’s the first step? A little education on your part, a modification to your marketing plan and a little conversation. Not sure where to start? I’ll give you a hint: Pick up the phone,
give us a call and let’s talk. Because if you don’t someone else will.
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