November was Long-Term Care Awareness Month. Many of us spent time each day looking for new ways to get Americans to consider planning for this inevitable need. We talked about the likelihood of needing care, the fact that Medicare was not designed to pay for LTC, that Medicaid is not “free,” the cost of care, the impact of caregiving on our families, and we even talked about how an LTC event could potentially destroy a well-intended retirement plan.

Despite these messages, we still see low market penetration and a lack of consciousness about this important retirement planning issue.  In study after study, Americans say that the #1 reason for not buying long-term care insurance is that it’s “too expensive.”  When meeting with clients, we even hear this objection before reviewing plan deign and premium options, so “perception becomes reality.”  The conversation about planning for long-term care is easy to put off or shut down with the “it’s too expensive” response. 

We all know how important this discussion can be, so how do we get through this? Maybe it’s time for a new way of going about it. How about trying this two-step approach?

     1. Getting clients to say “yes”

Let’s be honest – nobody likes talking about buying insurance, let alone insurance for someone who is chronically ill or has a severe cognitive impairment.  Well, we do...but our clients usually don’t.  So I suggest that you gain client agreement.  It’s the baseline for a productive discussion. Get your client to say “yes.”  The strategy is simple. You’re getting your client to agree (or say “yes”) that this issue of long-term care is real, it’s tough on families, it’s expensive and it might happen to them.  This will happen with good fact-finding questions or by sharing a story that helps the client understand the challenges that come with an extended healthcare event. If the client agrees with these assumptions then you pivot to discuss strategies to manage this risk.  If the client doesn’t agree that planning makes sense…STOP.  You likely won’t have success if the client does not see the value in planning and your time may be better served elsewhere.

     2. Don’t let perfect be the enemy of good

With the new (and realistic) pricing assumptions of standalone LTC insurance in place, it’s tougher to solve the whole problem these days.  Where advisors used to provide incredibly rich benefits that would cover 100% of the risk, we’re now seeing successful advisors using “hedging strategies” and suggesting plan designs that cover 50-80% of the LTC risk.  Most of your working age clients can afford $100-200/month in premium for this coverage.  We need to avoid sticker shock and that “it’s too expensive” objection.  One way to do that is provide your clients a good-better-best range of premiums.  We’re all used to this approach and purchase this way – think about our medical insurance, gasoline, the car wash, etc. Why not long-term care insurance? Like with some life insurance strategies, you may want to solve for the premium.  If your client can afford $150/month in premium, go build or design a plan around that number.

This two-step approach is not an earth-shattering breakthrough. It’s really just advisors getting back to basics. Get the client to agree that this planning makes sense (or say “yes”), discuss ways to fund and manage an LTC event and then present a solution with a range of premiums that fit into their budget. Give this strategy a shot during your next long-term care insurance discussion and let me know how it works!