product spotlight | long-term-care insurance Long-Term-Care Insurance in the Post-DOL World

The tool portrayed in this article will help you talk through the journey your clients will take as they live with physical and cognitive frailty.

By Deb Newman, ChFC, LTCP, CLU

While listening to a presentation by Doug Lennick on the state of the Financial-Advice industry, I thought to myself: “How will this presentation apply to the delivery of long- term-care insurance?” I left the event with a new enthusiasm of how critical it is that we make a contribution to the advisory practice of the future.

We all know that consumer awareness and the Department of Labor regulations are changing the financialadvice industry, but I believe quality advisors have been acting in the best interest of their clients for years. So what’s new?

In his presentation, Lennick emphasized that to “remain relevant, advisors must enhance their value proposition, and that includes incorporating Behavioral Financial Advice: the connection between financial health, physical health and happiness.”1 Then, he mentioned the words that gave me inspiration: PREPARE CLIENTS FOR THE CERTAINTY OF UNCERTAINTY!

Simply put, the two risks are living and dying. The financial and emotional implications of death are areas most of you have well in hand, but let’s talk about the living. Here are the two components of living:

1. Sickness, injury and disability and/or living a long life with physical or cognitive frailty

2. Good health with market uncertainties

A tool for dealing with uncertainty

Again, the certainty of market uncertainty is a strong focus for most advisors; so, let’s talk about the first component and the very personal journey you and your client will take as a family lives with physical and cognitive frailty. The tool that follows is simple in concept and allows you to really talk through that journey with your clients. I think this tool, portrayed as the letters M and W below, can be used for every aspect of uncertainty, but let’s look at it as it relates to long-term-care planning.

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Source: Doug Lennick, think2perform, AdvisorNet Financial Education Conference in Minneapolis, MN, April 2017.

As you follow the arrows on the M, you will see that without a plan for the uncertainty of how a family will cope with long-term care, the expense begins the stress, and then the journey continues to irrational decisionmaking and ends with diminished physical and financial health. With long-term care, you could really create that M for not only the person needing the care but for all of the family members impacted. Quite frankly, the financial and emotional stress of caregiving really compounds the problems for the next generation.

Now, as you flip the M to a W, you can see that having a plan in place reduces financial stress; therefore, it also reduces the irrational decision-making behavior and makes both the financial and physical health stronger, particularly for the family.

The best word to add to your discussion with your clients is PERMISSION. If you have a plan in place that incorporates behavioral financial advice, it will give the family permission to intervene sooner with a plan for home care. Permission allows the journey along the W rather than along the M.

The advisory practice of the future will no doubt be team based; so, make sure to have a resource well versed in long-term-care planning as part of your team so that your client’s journey through life will end well.

Ashton Applewhite, who was named Next Avenue’s 2016 “Top Influencer in Aging,” put it well: “It would be great if we no longer see aging as a problem to be fixed or a disease to be cured, but for what it is: a powerful, natural, lifelong process that connects us all.” 2

1 Doug Lennick, think2perform, AdvisorNet Financial Education Conference in Minneapolis, MN, April 2017.

2 Ashton Applewhite, 2016 Influencers in Aging, http://www.nextavenue.org/showcase/influencers-aging-2016/, 2016.

Debra C. Newman CLU, ChFC, LTCP, is President of Newman Long Term Care. Contact her at 612-454-4402.