Danger Zone: Talking to Clients Who Lack LT Healthcare Coverage

Danger Zone: Talking to Clients Who Lack LT Healthcare Coverage

It may not be a comfortable subject to broach with reluctant clients, but there’s no reasonable – or responsible – way to avoid the conversation.

It may not be a comfortable subject to broach with reluctant clients, but there’s no reasonable – or responsible – way to avoid the conversation. Long-term healthcare insurance is not a luxury – it’s as near to a necessity as one can find. The US Health and Human Services Department estimates that 60% of people over the age of 65 will need long-term care, either at home, in a hospice or nursing home, or other dedicated healthcare facility. This sort of care is extremely expensive and the trend is steeply rising. 

It’s wise to consider that other estimates suggest that the government’s expectations are rather sanguine and everyone should plan to cover the expense of long-term care. Right now, an estimated eight million people have LT coverage – when the plans were first offered a few decades ago, the premiums were reasonable and many people bought in. Unfortunately, the industry estimates underpinning the premiums were optimistic and the cost of coverage is now climbing steadily, tempting some policyholders to reduce or even eliminate their policies. 

Experienced insurance agents and healthcare specialists as a rule don’t recommend dropping LT coverage. One experienced voice says that a lack of LT insurance can become “the single biggest devastator of a financial plan.” Adjusting coverage to make the premiums manageable is one thing, particularly if other financial resources are in reserve to cover LT costs. But this isn’t a realm where one can take chances.

Consider the basic facts: a private room in a nursing home averaged more than $100,000 per year in 2018, based on estimates compiled by Genworth Financial. Assisted living or the hiring of a home health aide cost around half that amount, they estimated, a lesser burden, but one that can hardly be called light. After the age of 50, LT coverage should be on your clients’ radar screens, and once it has been taken on, it should not be surrendered unless robust alternatives are in place.

For more, please see:
Not having long-term care insurance can be ‘the single biggest devastator’ of your financial plan | CNBC

Where Have All the High Net Worth Clients Gone? The Under-Insured Generation: Millennials Living on the Edge