Financial Advisor or Long-Term Care Insurance Specialist?

Preparing your family and finances for the future costs and burdens of aging is an essential part of retirement planning. For many American families, some type of Long-Term Care Insurance will be appropriate. 

Now you need to seek the assistance of a professional. 

Often people think they should involve or work with a financial advisor to plan for long-term care. On the surface, it makes sense. Since long-term care expenses adversely impact income, assets, and lifestyle, getting help from a financial advisor seems like a good idea. Long-Term Care Insurance is a way to safeguard savings and preserve income in addition to reducing the stress and burdens otherwise placed on your family. However, most financial advisors lack knowledge and expertise when it comes to long-term care.

The same thing with a general insurance agent; the same person who helped you with your auto insurance, for example, also lacks expertise in the complicated world of Long-Term Care Insurance.

The problem is many advisors and insurance agents provide poor recommendations as they lack product and underwriting knowledge. Plus, often, they only work with one or two insurance companies. Premiums can vary over 100% between companies for the same benefit. Since Long-Term Care Insurance is medically underwritten, your current health will play a big role in which company best fits you. Most agents and advisors have little understanding of the underwriting criteria of each company and the process. 

This lack of knowledge can dramatically affect the premium, meaning you could much more than you should. It could also impact the amount of benefits available when you need them at the time of claim.  

LTC Specialists Generally Work with Multiple Top Companies

Most financial advisors and general insurance agents only work with one or two insurance companies. Most specialists work with all or most of the top insurance companies that offer long-term care solutions.

Long-Term Care Insurance Specialists are licensed by the state's Department of Insurance. Top specialists are ususally licensed in many states, if not every state. A specialist must have the trequired Long-Term Care Insurance Continuing Education training. In partnership states they must have adidtional partnership training as well.

Since most financial advisors and general insurance agents have limited product availability and knowledge, they can not properly shop for the best coverage at the best value based on your specific age, health, and goals.

The lack of underwriting expertise can have a bigger impact than you think. Underwriting criteria differ with each company. The problem is many companies today will not accept a person who has been previously declined by another company, so making the right decision to start with is very important. 

LTC Specialists Will Ask Detailed Questions About Health & Finances

Generally, financial advisors or general insurance agents don't ask enough health and family history questions to make the proper pre-underwriting decisions. A Long-Term Care specialist will spend a lot of time asking these questions. Sometimes the questions may seem very personal, but they are vital questions to match you with the most appropriate insurance company.

Another concern is that most financial advisors and general insurance agents don't understand the importance of the dollar-for-dollar asset protection offer by the Long-Term Care Partnership Program.

Since a qualified Long-Term Care Insurance specialist will understand the claims process and your specific financial situation, they will make the right policy design recommendations based on your particular situation. 

You don't want to spend more money than you need. Often, a financial advisor or general insurance agent will make recommendations that are either include too many benefits (more than what you need) or not enough. However, keep in mind, Long-Term Care Insurance is custom designed, so you get to make the final call.

Company Selection and Policy Design Huge Factors

Since Long-Term Care Insurance is custom-designed, you get to decide on the total amount of benefits you want in force and the total cost you will pay for those benefits. You may have recieved "quotes" before and think Long-Term Care Insurance is too expensive. You need to speak with a specialist since there are usually affordable options available.

Premiums get calculated on many factors, in addition to the total amount of benefits you have in the policy. The factors that determine the size of the premium include your age, health, and family history. Premiums vary over 100% between insurance companies for the same benefits. It is essential to use a specialist to obtain the right coverage at the best value.

Agents May Call Themselves a Specialist - Often They are Not

Some insurance agents also call themselves "specialists" when they are not. While they may "specialize" in this area, often they have little real experience. The American Association for Long-Term Care Insurance, a national education and advocacy group, suggests that you work with an individual who represents multiple top insurance companies and has at least 100 clients they have helped with a policy. 

An agent or advisor may tell you they have twenty years of experience, but the experience is not based on how long a person has been doing it, although it can help, but on how many clients they have helped. Selling a few policies each year does not equate to experience. A person may be "appointed" by an insurance company (meaning they can offer and sell a policy), but that doesn't mean they have experience. 

The "specialist" should be "appointed" with the major insurance companies that offer the several types of Long-Term Care Insurance available. "Captive" agents work with just one company. 

The "specialist" should be Partnership certified in the states that offer Partnership Long-Term Care Insurance. The certification requires on-going training, but it is essential. 

Any professional who is not Partnership certified is limited to the type of policies that can offer. Typically it limits them to only offer life insurance policies with "chronic illness" riders. These policies are not designed for long-term care planning and should not be considered a substitute for Long-Term Care Insurance. 

A life insurance policy with a "chronic illness" rider allows you to access the death benefit before you die, often only a limited portion of the death benefit – if the eligibility conditions are met. In some cases, they require the policyholder to be "terminal." Most long-term care situations are not deemed "terminal."

If a specialist, agent, or advisor does not offer all the types of Long-Term Care Insurance solutions, they will typically be biased for the one they do offer. This is also true if an agent or advisor only works with one insurance company. They will be biased toward that company!

A true specialist will offer various traditional LTC Insurance options, asset-based or hybrid policy options, and short-duration/short-term care options.

Do not confuse asset-based "hybrid" insurance policies with a life insurance policy with a "chronic illness" rider. Hybrid policies are filed and work similarly to Long-Term Care Insurance but include a death benefit. However, they do not qualify as Partnership Long-Term Care Insurance. Again, a specialist can explain the differences and which type of policy is best for your specific situation. 

Specialists Can Get You Accurate Quotes - Usually Right Away

If the agent or advisor has to go back to the office or consult someone at the office to get you quotes, that would be a big sign that they are not specialists. Often, agents must go to a broker office or someone in the "back-room" who actually run the quotes since they cannot do so themselves.

A specialist will be able to provide you with accurate quotes, along with professional recommendations, right away. Specialists will have the proper quote software and underwriting knowledge to develop accurate quotes and recommendations on the spot. 

However, if you have unusual health problems, a specialist may have to contact the underwriting department at an insurance company to clarify your eligibility. 

Pre-qualification does not mean you will get approved, but it is critical for an individual with a unique or complicated health history. The specialist must ask you detailed health questions, and you must answer them fully.

There are few true Long-Term Care specialists in the country. Often, an experienced specialist may have a thousand clients or more with Long-Term Care Insurance. That is the level of experience that can benefit you and provide you with peace-of-mind.

Remember - the total number of clients is key to the experience, not the number of years. You can find a Long-Term Care specialist by clicking here.

Once your policy is approved, your specialist can send your policy's "policy schedule page" to your financial advisor if you wish them to have details on your policy.

LTC Insurance is Regulated 

Each state regulates insurance rates. Every agent or financial advisor uses the same "rates" that an individual company has had approved with the state for a particular product. Because the product is regulated, you can't get "a special deal" from one person instead of another. The difference will be in the underwriting class they are quoting and the policy design they recommend.

Finally, while Long-Term Care Insurance is a financial product designed to protect your saving and income from the expensive costs of long-term care services and supports, these policies are really much more than that.

The issue of long-term care is both a cash flow problem and a family problem. The right plan will give your family the time to be family and not have to deal with the full responsibility of caregiving or to manage paid caregivers. 

The policy provides you the resources that give you access to your choice of quality care options giving both you and your loved ones peace-of-mind. In the end, Long-Term Care Insurance is all about family. 

Specialists understand that long-term care is both a cash flow issue and a family issue. They make recommendations based on their experience dealing with families and the claims from policyholders. 

LTC Specialist May Not Be Local - That's OK

Usually, the insurance company is not nearby. Nor will your Long-Term Care Insurance specialist. The specialist's location does not matter; it is their skill and experience that are essential to help you plan for the financial costs and burdens of aging.  

Most specialists will easily be able to review your situation on the phone. Some specialists will allow you to see their computer screen on your device. There is no need to meet with an agent or advisor in person; you can do everything from the safety of your home. 

Applications get completed electronically, so there is no wait for paper applications. Electronic applications are now the standard and add another layer of privacy and safety compared to paper applications. 

Many moving parts need to be navigated when planning for long-term care. Working with a specialist will not only make it easier, but they will also save you money. There is no extra cost in working with a specialist.  

However, be sure the specialist is actually a specialist. Make sure they work with multiple top companies. Ask them if they have claims experience. Be sure the person is licensed in your state and certified with the state partnership program. Then, and only then, can you enjoy the peace-of-mind that comings with a long-term health care plan.

Items to Discuss with a Long-Term Care Specialist

Be sure that you and the specialist discuss several key issues:

  • Partnership: Most states offer special policies that provide dollar-for-dollar asset protection. The Long-Term Care Insurance Partnership Program might be one of the best-kept secrets in retirement planning. Make sure the specialist explains this program and how it might help you.
  • Tax incentives: There are federal tax incentives available for some people. If you own your own business, be sure to ask.
  • Health Savings Accounts: If you have an HSA you can use the pre-tax money in your account to pay for the premium.
  • Asset-Based or Hybrid policies: These are life insurance or annuities with a rider for long-term care. Careful, only a handful are actually a long-term care benefit. However, one of these policies can provide you with the flexibility of both a long-term care benefit or a death benefit. They are expensive but can be paid with a single premium.
  • Health and Family History: Make sure the specialist asks you detailed questions about your health, family history, and retirement plans. Underwriting criteria vary with each insurance company. If they are not asking you detailed questions, then find another specialist.

You can find a Long-Term Care specialist by clicking here.


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