Long term care is considered as a pressing need nowadays.
Despite the urgency to prepare for this, advisers opt to divert their attention
to other components of retirement planning. This is perplexing and at the same
time alarming since the number of people who need long term care is growing.
Despite the urgency to prepare for this, advisers opt to divert their attention
to other components of retirement planning. This is perplexing and at the same
time alarming since the number of people who need long term care is growing.
According to a study called “Managing Long-Term Care Risk,”
conducted by Lincoln Financial Group, 40% of consumers have talked about long
term care with their advisers but only 10% has recommended getting long term
care insurance or other long term care products.
conducted by Lincoln Financial Group, 40% of consumers have talked about long
term care with their advisers but only 10% has recommended getting long term
care insurance or other long term care products.
So what’s the reason behind the behavior of advisers?
I will quote Mr. Bucklee in order to answer this. According
to him, “There’s a bit of disconnect between the adviser and the client.” And
he goes on saying, “You’ve got a client who has concern about it and an adviser
who’s scared of talking about it.”
to him, “There’s a bit of disconnect between the adviser and the client.” And
he goes on saying, “You’ve got a client who has concern about it and an adviser
who’s scared of talking about it.”
The fear of advisers is rooted in their confusion when
deciding the best course of action for their client’s long term care plan,
including choosing between a traditional long term care insurance policy and
hybrid long term care policy. This is still Mr. Bucklee’s opinion.
deciding the best course of action for their client’s long term care plan,
including choosing between a traditional long term care insurance policy and
hybrid long term care policy. This is still Mr. Bucklee’s opinion.
Jesse Slome, the executive director of AALTCI has something
to say too. According to him, advisers are more comfortable discussing hybrid
policies because the conversation is much simpler and easier to present to
clients. And because of this favoritism, the market for hybrid policies
flourished. The gross premiums swelled from $632 million of gross premiums in
2008 to $2.41 billion as of the last quarter of 2014.
to say too. According to him, advisers are more comfortable discussing hybrid
policies because the conversation is much simpler and easier to present to
clients. And because of this favoritism, the market for hybrid policies
flourished. The gross premiums swelled from $632 million of gross premiums in
2008 to $2.41 billion as of the last quarter of 2014.
But for Peter Gaines, a financial planner at Integrated Financial
Partners, complexity shouldn’t be used an excuse. He said that, “Compared to
other products we offer our clients, in my opinion, long-term care is a lot
easier to understand once you get into it than some of the other products we
sell. I don’t accept [complexity] as a good reason why advisers aren’t
recommending it to their clients.” He continues by saying, “To me that doesn’t
hold any whatsoever.”
Partners, complexity shouldn’t be used an excuse. He said that, “Compared to
other products we offer our clients, in my opinion, long-term care is a lot
easier to understand once you get into it than some of the other products we
sell. I don’t accept [complexity] as a good reason why advisers aren’t
recommending it to their clients.” He continues by saying, “To me that doesn’t
hold any whatsoever.”
His argument continues by stating an example, that selling
variable annuities is more complex than ltc insurance. They will need insurance
license and securities in order to sell the former while the latter only
requires insurance license.
variable annuities is more complex than ltc insurance. They will need insurance
license and securities in order to sell the former while the latter only
requires insurance license.
He also said something about “highly unprofessional”
practice of advisers paid on AUM. This is another reason why advisers shy away from
discussing long term care because long term care contracts don’t boost AUM. If
this is true, then this is really unprofessional and unfair practice.
practice of advisers paid on AUM. This is another reason why advisers shy away from
discussing long term care because long term care contracts don’t boost AUM. If
this is true, then this is really unprofessional and unfair practice.