As your clients’ most trusted adviser, how can you protect them from the financial threat and high costs of long-term care?
You basically have two initial choices. Let’s assume your client is under age 75, relatively healthy and understands that an unexpected, unreimbursed long-term care expense is a real threat that can unravel their and their spouse’s retirement plans and lifestyle. You can talk about “what if” scenarios, including the purchase of a long-term care insurance policy. Or you can avoid the fact that costs for care at home or in an assisted living community are in the $60,000 to $75,000 range, and that costs in a skilled nursing facility are in the $125,000 to $175,000 range and are both increasing by 4 percent annually.
Should you have this unpleasant, difficult conversation with your clients? Since the odds of this problem affecting a client over age 80 is approximately 70 percent, it could make a great deal of sense to get your clients thinking about a solution to a problem they may one day likely face. Where will the necessary funds come from to pay for these costs? Is there a readily accessible source of sufficient funds that will not trigger a large unnecessary taxable event when liquidated? Should the client self-insure against this threat or would it make more economic sense to purchase a long-term care insurance contract from one of the major insurers?