Guilt, Control Issues Can Keep Clients From Using LTC Policies

Beth Blecker, CEO, Eastern Planning Inc., Nanuet, New York.

Long-term care insurance can have a reputation of being a "tough sell." Advisor Beth Blecker, president of Eastern Planning Inc., in Nanuet, New York, often faces a different LTC challenge.

"Clients are frequently reluctant to use their policy," says Blecker, a registered financial consultant, with a slight tone of disbelief. "I've had several cases where clients have had qualifying events and I've had to point out to them that their policy will cover them."

A common complaint is that many consumers are reluctant to buy LTCI because they fear their investment will be wasted if they do not use it. Blecker confirms that clients with LTC policies often avoid using them.

"A combination of communication and emotional issues are frequently at the heart of the matter," says Blecker.

The biggest misconception may be that many clients feel LTCI is primarily for the very old. According to the National Alliance for Caregiving and AARP, nearly 40% of adults needing long-term care are between the ages of 18 and 64.

"In some cases one spouse may not think the other is incapacitated enough to warrant help," Blecker explains. "They say things like: 'He still dresses himself,' or: 'We manage.' They can be in denial. They're acknowledging that they have a problem but are also saying it's under control."

Other times, Blecker feels it's a question of guilt. "They want to be there for their partner. They feel it's their responsibility. The idea of assistance, even for something they've paid for, is uncomfortable to them."

How Insurance Can Help

Blecker often takes pains to illustrate the many ways an LTC policy can be helpful. "They bought the policy years ago. It's understandable that they've forgotten what it can do."

Despite coverage advances, many LTC policy holders remain unaware of the various ways they can be assisted, including getting part-time help at home or companionship care.

"It can be mentally, physically and emotionally exhausting for a senior to care for another senior that is starting to decline due to some form of cognitive impairment," says Blecker. "Pointing out that their policy can pay for someone to take the declining spouse to the gym or mall for a few hours a day can be a great stress reliever. I have to emphasize that is what they paid for all those years ago."

Comparatively speaking, LTCI is a different form of coverage with different trigger points designed to provide ongoing benefits for specific circumstances.

"It is important clients understand what LTCI does pay for. Most are surprised to learn this," she says. While Blecker believes the industry can do more to amplify its message, she has seen signs that it may be resonating among the next generation.

Many will need long-term care but few want to discuss it. The idea of needing help to meet one's basic needs is depressing. Also, many people may not be able to pay for it without exhausting assets or becoming a major burden to a spouse or children.

"Adult children are understandably relieved to learn their parents had the foresight to take an LTC policy," says Blecker. "LTC is not a product. It's part of the solution."

— Related on ThinkAdvisor:

Joseph Finora is a consultant to wealth advisors. He can be reached at [email protected].