How advisors can unlock the benefits of long-term care planning

With more than 55 million Americans expected to require long-term care in the next three decades, and state regulations shifting rapidly, it’s crucial for advisors to be equipped to address client needs in a rapidly evolving LTC market.

Today’s newsletter discusses how to effectively position hybrid and stand-alone LTC insurance to help clients navigate their future with confidence.

But first, be sure to register for our upcoming webinar on?4 Strategies for Working with Hard-to-Insure Clients?on April 19 at 2pm ET.

We’ll discuss:?

• How to work with underwriting and medical specialists to get the best quote
• Underwriting narratives and trial applications to help clients obtain coverage
• Advanced planning strategies for impaired risk, such as stepped or skipped premium approaches, term laddering and other financing scenarios

Can't make it at that time? Don't worry. We'll send everyone who registers a copy of the webinar.

Long-Term Care Update

The escalating cost of LTC, combined with a shrinking number of traditional LTC insurance options, has left many retirement savers worried about how they will pay for LTC services—such as nursing home care and home healthcare services. Advisors play an indispensable role in helping clients understand and plan for these costs as part of their comprehensive financial planning.?

Regulators are stepping in to address this concern. The IRS allows savers to deduct a portion of their LTC insurance premiums, while other provisions like the SECURE Act 2.0 are set to allow the use of qualified dollars to pay for LTC insurance premiums. However, despite these measures, the cost of insurance may still exceed many savers' abilities to afford them.

Here’s how Michael Laatsch, president and financial advisor at?Innovative Planning, uses Modern Life to improve his LTC insurance conversations with clients:

“We will take each client plan and perform a risk analysis through our in-house planning department, and in the end, based on client data, we come back with where there are gaps in coverage, if say, you have an event where you need to go into care and we provide that to Modern Life,” said Laatsch.

With Modern Life, “the presentation is all developed and fully customized to each client and with their data, whereas in the past we’d get the quotes back from the carriers and we’d have to put together our own presentations.”

Read more from our recent feature by Davis Janowski in?Wealth Management.

Key LTC Talking Points

1. Protection against outliving savings:?High LTC costs pose a risk for savers who may outlive their savings. Discussing the potential costs associated with LTC is essential to help clients understand the critical need for financial planning.
2. The increasing need for LTC services:?The national median cost of nursing home care is $108,405 per year for a private room. By 2030, that figure is expected to surpass $141,000.

Conversation Starters

• Discuss the benefits of linking LTC insurance with life insurance:?As standalone LTC insurance costs rise, linked benefits are gaining popularity. These options are typically more affordable than purchasing separate policies, as a linked policy enables the policyholder to use the product's death benefit to pay for LTC expenses, which would remain tax-free if unused.
• Introduce hybrid policies:?Hybrid LTC-focused life insurance products or riders can be added to stand-alone policies, providing them with a cost-effective and flexible solution for their LTC needs.
• Offer comparisons:?Leverage technology and brokerage resources to help your clients compare policies and carriers, aiding them to find the most suitable solution for their individual circumstances.
• Don't forget potential tax advantages:?Portions of LTC premium payments may be tax-deductible, providing clients with additional incentives.
• Personalize the conversation:?Share your professional insights on how the modern approach to LTC planning can benefit your clients' unique circumstances and complement their existing financial planning strategies.

Next Steps

LTC is an essential topic for planning and insurance conversations with clients. As advisors, you can help them navigate the complexity of the financial planning landscape while providing them with tailored solutions to protect their future.??

Click here to work with a Modern Life brokerage manager, who can help discuss different LTC scenarios or work through specific client questions.