September 2017 Newsletter
I recently had a conversation with a seasoned and successful financial advisor who expressed frustration regarding how unresponsive his clients are to repeated appeals to purchase long term care insurance solutions. The advisor’s clients were certainly the right demographic, modestly affluent and in their 50’s and 60’s. Some even had personal experience with family members or friends needing custodial care. The advisor stated that he consistently discusses the extraordinary cost of care, whether it is delivered at home or in a formal nursing home environment. He also fluently quotes the alarming statistics describing how likely it
is that one will need custodial care. The basic flow, which is not uncommon, is to cite the enormous cost, follow with a stat on how likely you are to experience this cost, and run an illustration on traditional long term care insurance or one of the popular hybrid, asset-based solutions. Most of his clients are choosing not to act.
The reality is that despite the enormous cost and high likely hood of needing care, most of our clients do not believe that a custodial care event will happen to them. Conversations based on how much care will cost and how likely you ae to need care fall on deaf ears. In order to change the result of clients choosing not to act on our recommendations, we need to change the conversation from “how much” and “how likely”, to “who” and “what”.
“Who’s” on first…
“Who” is on first because “who” is the place to begin this conversation. Explain to your clients who will provide custodial care in their life. This is most often a spouse or daughter (often the oldest daughter or the daughter living the closest).
“What’s” on second…
Next, describe what the consequences to your loved ones will be. Paint the picture of a 49 year old daughter who has a wonderful career and busy family life trying to find 20 hours per week, after work and in between the kid’s sporting events, to provide care. Custodial care, in the absence of a pre-planned tax-free income to help with care, can wreak havoc in the lives of those we love the most. People purchase life insurance when they consider who will be impacted by a pre-mature death and what the consequences to those loved ones will be. They do not purchase life insurance because the statistics have persuaded them that they have a chance of dying earlier than expected.
Changing the custodial care conversation to who will provide the care and what the consequences could be will lead to many more clients taking action creating a source of income to alleviate the burdens created in the lives of our care providers.
The information in this presentation is provided as a general overview. It is derived from the Internal Revenue Code, Medicare.gov and other government publications, all subject matter sources reasonably believed to be reliable. Tax law and the laws governing Medicare/Medicaid are complex and subject to change. Clients should consult with their attorney and/or qualified tax advisor when making decisions regarding these matters.
PO Box 8151 | Wayne PA 19087 | USA