Kassi Hyde has clients who jaywalk, fail to floss their teeth three times a day and lack stand-alone long-term care insurance with unlimited lifetime benefits and 5% annual compound inflation.
Hyde is a Peachtree Corners, Georgia-based wealth management advisor with Apollon Wealth Management, and she has learned that long-term care plans can take many forms.
One possibility: Some clients could put the money they'll use to pay for care in a Roth individual retirement account.
That's not the strategy envisioned by the planners who once dreamed of equipping every prudent U.S. citizen with stand-alone LTCI, but for some clients, Hyde said, it fits.
The need: When Hyde works with clients who need a long-term care plan, she starts by exploring their personal experiences with aging and care.
"Many people have had loved ones deal with a long-term care need, and it has colored their opinion about buying long-term care," Hyde said.
The original LTC planners, who may have known families that had to help loved ones live with severe dementia for 20 years or more, argued that buying stand-alone LTCI was by far the most efficient way for a family to protect itself against the devastation caused by a need for many years of long-term care.
Today, Hyde said, she usually recommends products that combine long-term care benefits with life insurance, which pay for less care per premium dollar but always end up paying benefits to someone.
"This is because the need is uncertain," Hyde said. "Most clients want the death benefit should they never use the policy."
The strategies: Here are seven things that Hyde does to create LTC plans — including the Roth IRA LTC funding strategy.
1. She does talk about insurance.
"I ask if they like the peace of mind insurance provides," she said. "I also point out that insurance allows you to leverage your dollars."
People who use stand-alone LTCI coverage or life-LTC combination products have a great deal of coverage the first day the arrangement is in effect.
People who dedicate a different asset to funding LTC needs usually have to build that asset up over time.
Many clients who do buy insurance could self-fund but would prefer to leave a legacy or spend the money on other things.
2. For clients who want insurance, she does a health reality check.
"I ask high-level medical questions, to determine the best product out there for them, as it might be hard to get approved," Hyde said.
