The decision to purchase LTCI is frequently couched in figuring out what's best for a client's entire family, and you need to be conscious of that. Here are some keys to making a more inclusive sale.
Role of family in the discussion
Vincent Barbera, CFP, with TGS Financial Advisors in Radnor, Pa., says questions about the family are one of the more important elements when discussing LTCI with clients. In his experience, the long-term risk of the LTC-exposure and the large expense, which might not arise for 10 to 15 years, extend beyond the clients. "The impact that it's going to have on the entire family needs to be accounted for," he says. That impact may require selling a home, depleting assets, etc., actions that also deplete the potential inheritance parents might hope to leave.
Consequently, Barbera works to understand why the clients are considering LTC: "Is it just an insurance product to protect each other or is there a more important reason?" "Every time we talk with a perspective insured, we're asking about their family and whether they have children," says Patricia Bennett, LUTCF, CLTC, president of Longevity Planning in Newington, N.H. "If they have children, chances are the children work and they very well may live out of state. Or, if they don't have family that just means that this person is even more likely to need care perhaps sooner because there is no informal caregiver. There's no daughter that's going to stop by twice a week to deliver groceries and make some meals and do things like that."
Meeting with children who live locally can head off the children's potential objection to their parents' payment of LTCI premiums, Bennett notes. If she learns an adult child works full-time, for example, she asks how that child would feel about becoming an informal but possibly full-time caregiver. "Would you quit your job if you needed to take care of mom and dad?" she asks. "They start thinking of it in those terms as opposed to just mom's going to pay $2,000 or $3,000 a year for a premium."
Bennett also finds that many of her clients are caring for their own parents, who are in their 90s or older. Asking prospects about these older family members reveals valuable information that can determine what type of LTCI works best for the client. "It's important to get to know whether their parents have passed or are still living, if they've needed long term care and what that experience was," she says.
