It may not be detectible to everyone quite yet, but there’s a seismic shift happening among consumers and their financial professionals when it comes to preparing for long-term care. If you haven’t looked at asset-based long-term care products lately, now is the time.
The long-term care landscape has changed significantly over the last several years. As financial professionals, we are dealing with rate increases from multiple carriers, with several exiting the marketplace altogether. How we respond to these changes and what we present to our clients is going to have a dramatic impact on our ability to help clients prepare for long-term care going forward. We can either become discouraged with the changes that we see before us or we can take positive steps to shore up our clients’ financial future and our industry as a whole.
A flexible approach
The Franklins ended up repositioning $89,000 from their CDs into a joint asset-based long-term care product. This product pays $7,500 per month for qualifying long-term care expenses for up to three years. They also opted to purchase an extension rider, which will give them each $7,500 per month beyond the initial three years for lifetime benefits. The extension rider also contains a 5 percent compound inflation rider. This rider cost the Franklins an additional $3,464 per year and is non-cancelable, meaning the premiums can never be increased. This would give them the unlimited lifetime coverage they desired as well as eliminate the worry that the premiums will become unaffordable when they are in their retirement years.