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long-term-care-insuranceWondering who should have long-term care insurance? The product is often a perfect fit for Americans with $100,000 or more of investable assets according to a recent Wells Fargo study. The study describe this target market as working affluent, American workers with investable assets of $100,000 – $250,000 and household incomes of less than $150,000. What are the characteristics that make long-term care insurance a great fit for this audience?

1.  They’re serious about financial security. Just like their more affluent counterparts, the working affluent are also savers, disciplined, and planners. Despite the commitment to saving for retirement, only 43 percent have a written financial plan and need help planning for retirement income. Many are unclear about how much to save while working to ensure a secure retirement. This lack of a formalized plan and savings goal makes this market very attractive to financial professionals. The financial resources are available and in need of professional advice. An invitation to work with you to develop a plan is the entrée to a broader relationship. Many believe financial professionals are uninterested in accounts of less than $250,000, so your invitation will be a welcomed one.

2.  They’re fearful about insufficient retirement accounts. These households are less confident that their savings will be sufficient for retirement. Paying bills is still a primary concern although saving for retirement is also important. As a group, they expect to delay taking Social Security and plan to work in retirement, indicating that they may be even more susceptible to the financial stress of unplanned for long-term care expenses. The working affluent also need help estimating their income needs in retirement. Beyond covering current spending needs, estimating retirement income needs often overlook long-term care expenses. Your recommendation to include long-term care insurance premium in the monthly income needs, reduces the fear of outliving retirement income.

3.  They tend to underestimate the cost of health care. Just about all of us underestimate what health care will cost us in retirement. Because the working affluent have less wiggle room to make their savings last for the next twenty or thirty years in retirement, underestimating the cost of health care is a serious misstep. AARP estimates a 65-year old couple will spend $240,000 on health care costs during their retirement years. That is without long-term care expenses,that may be required for years. Clients can evaluate their long-term care expenses at Genworth.com.

Despite a healthy household income and a commitment to preparing for retirement, a client in this market may struggle to include long-term care insurance premium in the budget. Our LTCi experts at DIS will help you find a product at a price point that can fit into the budget now and in retirement. Premiums can be reduced by adjusting benefit levels or benefit periods. Request a long-term care insurance quote or contact us to discuss products for this large and attractive market.

Source: Wells Fargo study.