Harley Gordon, a recognized authority on long-term care, suggests advisors may find more success with long-term care insurance sales when they shift client conversations from the likelihood of needing long-term care to the consequences to loved ones when there is no plan.
The change in approach is founded in the all-to-common client belief that they will not require long-term care. According to Gordon, appealing to a client with facts and statistics about their need for long-term care is a losing proposition. A more effective route is to outline the fallout to the family and private caregivers when long-term care is necessary. In many ways the conversation is akin to a similar discussion about life insurance. The insured will never benefit financially from life insurance, yet providing for survivors and heirs is a strong motivator to buy.
When there is no plan for long-term care, loved ones are faced with a series of decisions to make, starting with who will provide care and how it will be provided. Do loved ones have the extra time (presumably not working another job), willingness and financial resources needed to provide care themselves? Where will care provided? Do loved ones have an extra space in their homes suitable for the older person? Is it reasonable for the older person to reside at his/her own home? How much would it cost to hire an in-home caregiver? The questions go on.
Family dynamics can quickly become complicated when the family is unprepared to make these decisions. Relationships are often impacted for understandable reasons. Some potential caregivers may live far away. Career demands and family obligations are often at different stages, making it more difficult for some to accommodate the time demands of caregiving. Those who are able to provide care often feel resentful of those unable to. And those unable to often feel guilty that they aren’t more involved. It’s not surprising when sibling and other family relationships suffer under the strain.
Compounding the familial complications are the financial burden to caregivers who provide long-term care. The statistics about the financial impact to caregivers is compelling. In 2015, 62 percent of caregivers dipped into their own savings or retirement accounts to contribute to long-term care costs. Seventy-seven percent of caregivers lost time at work in order to provide care. More than half of caregivers would plan better for future long-term care needs. The children and spouses of caregivers often suffer as well. Fifty-one percent reported diminished time with their children and spouse due to demands of providing care.
Framing the long-term care conversation around the sacrifices made by loved ones can be a more motivating tack. Help the client see the irrevocable effects of failing to plan for long-term care. The next step is to build a plan with the client for long-term care. Ask the client to make some of the decisions about who will provide care and where the care will be delivered. Help the client to visualize the care that may be needed and who is capable, physically and financially, to provide it. How to fund the plan is the final component and a natural segue to long-term care insurance.
Budget may initially be an issue. But don’t let that deter you. Talk with your DIS representative beforehand for ideas about alternative funding methods. We can also help with designing plans at different premium levels. Call us. We’re here for every step of the process, from identifying clients most likely in need of LTCi to recommending the best product and carrier for each situation.