Long Term Care Planning Must Include More Than LTC Insurance Discussions
Long term care insurance has captured the attention of many consumers. Hardly a week goes by without articles, both pro and con, about the types of coverage available or companies offering products. As agents, it is very important that we discuss with consumers the costs associated with long-term custodial needs and help them evaluate the adequacy of their current resources to meet those needs. Often, when a shortage of resources exists, LTC insurance is appropriate and a review of coverage types, amounts of coverage and other riders offered is in order. Where we fall short is in assuming our job is done when the policy sale is complete.
Consumers need long term care planning! LTC insurance may be a part of LTC planning, but selling a long term care policy is not long term care planning. As insurance professionals, we spend so much time reviewing the financial impact on the beneficiaries, that we often overlook the emotional impact and information void that happens when a loved one requires long term care. This kind of short-sighted thinking throws away an important opportunity to serve the consumer and build your insurance practice.
Offering LTC insurance as a resource to be used in providing LTC planning is an important practice building tool. You have experienced the panicked and emotional calls when a client needs to make claim on any of his or her policies, whether life, disability or LTC. More than anyone, you know that missing documents or documents that were never updated can cause serious distress and financial hardship. You know because you are called upon to help sort out the dilemma and to help replace missing documents. You also know that, frequently, all you can do is offer verbal consolation because the beneficiary designations were old and wrong, something you can do nothing about at the time of need.
LTC insurance products provide new resources but do nothing to provide emotional comfort, document location and lifestyle management to the families. If mom needs to go to a nursing home, will the children have the power of attorney documents necessary to manage the house, sell the car or deal with other financial issues? They may need access to deeds and titles. Moms birth certificate (and marriage certificate) is essential in applying for Medicare and other Social Security benefits. Dads military discharge papers are important if you want a U.S. flag to drape his coffin.
LTC planning counseling will help you assist a client in capturing important documents while discerning what planning still needs to be accomplished. It is a process that is a natural lead-in to other product sales. This strategy does not require you to embrace a comprehensive financial planning role, but instead, gives you a valuable tool to offer the LTC insurance consumer.
Here are several steps that create a powerful opportunity for you to develop trust and add value to your client relationships:
1. Create a checklist of important documents that are integral to your clients financial and family life. Help the client identify and obtain critical, but missing, documents, such as a will or durable power of attorney or health care proxy. Review existing insurance policies and investments for current beneficiary designations. Your clients will appreciate your efforts in helping them achieve a measure of assurance that their beneficiaries and caregivers will have both the resources and information to carry out their wishes.
Your checklist should include the following broad document categories:
