"I can't afford the premiums." When some LTCI advisors hear that from a prospect, they assume it's just another objection to overcome. How do you handle the real reasons lurking behind the claim? We asked a group of experience LTCI advisors how they deal with this problem.
- Review the cash flow. It's the classic process of identifying needs versus wants: If the clients recognize the need for LTCI, they might be willing to give up some discretionary spending to pay for it.
- Check other coverages. Kay Conheady, CFP, with Apropos Financial Planning in Rush, N.Y., has found that some clients who are at the stage of considering LTCI have life insurance that they no longer need "because the responsibility to protect dependents against premature loss of the breadwinner, that whole stage of life has passed." The premium savings and in some cases, policy cash values, can be used instead to fund LTCI.
- Change the source. The standard assumption is that insureds pay their own premiums but that arrangement can be modified. Kevin Young of Young Wealth Management in Davis, Calif. has had good results in asking clients' (adult) children to pay for their parents' policies when the parents wish to preserve their estate but lack the cash for LTCI premiums. The parents and children can jointly fund the coverage but each case is different.
- Multitask the premiums. If prospects can use their premiums to achieve multiple goals, the LTCI premiums will be less of a burden. One way to accomplish this is with hybrid products.
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