A recent article in the Wall Street Journal, http://www.wsj.com/articles/why-people-dont-buy-long-term-care-insurance-1433951495?tesla=y
gives a more psychological explanation to why consumers do not choose to transfer the risk of “living a long life”. This ‘narrow framing’ the authors explain, is when people exclude key factors when making hard decisions. For certain, the discussion of the need for Long Term Care Insurance is challenging in itself, and when the discussion of what options are available to transfer the risk begins, the confusion escalates.
The Role of the Financial Advisor or Agent
Education of the ‘key factors’ from a LTC specialist is most critical. I believe this is the reason more consumers do not follow through with creating a plan for the probability of this event they will most likely face – that of living a long life and having additional expenses associated with no longer being able to live independently. If an advisor is not a true LTC specialist they will most likely only discuss the subject if their client asks them questions about it. But the follow-through and detailed assessment and education is lacking. If one is not specialized in the techniques of Long Term Care planning, the conversation stops and nothing is done. The client might be satisfied that it must not be important enough or their advisor would follow through. The advisor might be relieved their client doesn’t ask more questions. My opinion is, until an assessment of the financial situation is complete, and the education of the risk involved is provided, followed by the presentation of the options available to transfer this risk, the overall financial plan is not complete. Long Term Care Planning does not necessarily mean the risk will be transferred to an insurance carrier via the implementation of an insurance product. Long Term Care Planning does mean the entire family understands what and how one would handle the situation (both emotionally & financially) if they were faced with a long term care event in their lives.
The Role of the Consumer
Expecting your advisor or trusted agent to be knowledgeable of the practice of Long Term Care Planning is your right. It is a common practice for an advisor to work jointly with a Long Term Care Specialist. Do not hesitate to ask your advisor to call on a LTC Specialist to assist with this Plan. Peace of Mind for your financial future depends on it.
I am available for joint work and have online meeting and conference capabilities. I may be reached at Peggy@LTchoices.com or 770-314-3705.