truth. Medicare does not cover the majority of expenses that are typically associated with LTC.

LTC is a chronic illness that requires custodial care. In the overwhelming majority of cases, the type of chronic care most people need falls under the definition of custodial care.

Note: As long as you have the potential for improvement, Health insurance, HMO’s, and Medicare pay for treatment of acute medical conditions, and for approved rehabilitative therapy.

However, they pay nothing, or very little, for custodial services needed when the most common chronic conditions occur and are unlikely to improve such as: debilitating arthritis, Alzheimer’s, post-stroke custodial care, coronary insufficiency, etc.

So once your condition is considered chronic, and you remain stable with no

As financial professionals, arguably the most important part of our job is protecting our clients against large losses. Many financial professionals protect clients through wealth management, life and disability insurance, and estate planning.

However, I have found Long-Term Care (LTC) insurance is something every client needs — yet very few actually own. I have also found that every financial professional is aware of exponentially growing cost and need for LTC insurance — yet very few proactively integrate this as a standard and routine part of their practice.

Long-Term-Care Simply DefinedFor starters, it is important for us to help our clients truly understand what LTC really is, and how it is defined.

In its simplest form, LTC is defined as the assistance needed when someone is unable to care for themselves due to chronic illness, physical injury, cognitive (mental) impairment, or frailty.

Healthcare professionals, health insurance providers, HMO’s, and Medicare classify this type of care as custodial care, as opposed to acute or rehabilitative care. The focus of LTC is on assistance with the normal activities of daily living.

These normal activities of daily living include:• Gettingaroundinsideandoutsideof

the home.• Bathing,dressing,toileting,personal

hygiene, and eating.• Assistanceneededwiththeassociated

activities of daily living, such as using the telephone, preparing meals, paying bills, shopping, transportation, and housekeeping.

• Helpwithactivitiesnecessarytoremainat home, participating in an adult day care program, residing in an assisted living center or receiving skilled care in a nursing facility.

Medicare Does Not Include LTC CostsMany people think Medicare pays for LTC expenses. Nothing could be further from the

demonstrable improvement, you must pay out of pocket for the daily assistance for custodial care.

Therefore, if our clients are incapacitated from a chronic medical condition, the real costs are for care or assistance connected to their daily functioning.

Who Needs Long-Term-Care?BynomeansamIaLTCexpertorspecialist.However, I have gone through a high level of training to earn the Certified Long-Term Care Specialist designation. I have also spent a great deal of time extensively researching this all-important topic. Most importantly, I have experienced the devastating (and often irreparable) financial, physical, and emotional damages that usually accompany LTC with my clients and my personal family.

Having said that, here is exactly what I tell every client when discussing LTC:1. It is my strong opinion that every

Every Client Needs Long-Term Care Insurance!

Page 16 The Register | September-October 2016

3. Givenmyexperience,research,andcalculations, “the most timely and affordable age range to buy LTC is 55-65 years old.”

As you get closer to age 65+, there are several key factors that affect LTC prices, which can often make them cost prohibitive:• Life Expectancy and Need – at age

your life expectancy reaches a pivotal point of decrease while at the same time your probability of needing LTC begins to increase substantially.

• Health Conditions — most people at age 65 usually being to experience serious health conditions that increase LTC policy prices or in many cases disqualify them from purchasing a policy.

Why Don’t More Of Our Clients Own LTC?There is a wide variety of reasons most of our clients don’t take the necessary proactive steps to inquire about and own LTC insurance:• Denial – The harsh reality is most clients

don’t want to talk about or even believe this kind of thing can happen to them. They can’t fathom the thought, possibility, or probability they will actually need a professional to help them with some of life’s most basic activities.

• Cost and Price — Many clients would be shocked to know today’s actual monthly or annual cost for someone who needs LTC. More importantly, they are unaware of how much these costs will exponentially increase in the future. Furthermore, they have no idea how affordable it is to purchase a LTC policy that will pay for this type of care – both now and in the future.

• Fear and Complexity – For many clients, LTC insurance is perceived as complicated, sophisticated, and intimidating. Many view LTC as a complex product that is very difficult to understand. They are uncertain about when to buy it, how much it costs, how to apply, which companies are best, and what kind of policy fits them best. This is especially true considering there are so many LTC policy options and details to choose from.

• Credible Person — Most people don’t know a credible person to turn to for LTC. What they are searching for, and what they deserve, is someone they can trust. Someone who can give them the information and education they need without the pressure or fear of being “sold” and without feeling “obligated” to make a decision or buy something.

• Affordability — The truth is, if LTC was free, every one of our clients would own it. However, our clients rarely take the time to consult with financial

married couple must own life insurance.2. It is also my strong opinion that every senior must own LTC insurance.

Although studies and statistics vary, what you will find is that approximately 85% of our clients will need at least one year of LTC. Very few people die unexpectedly, and quickly. The large majority of people experience a chronic condition that requires at least one year of LTC-qualifying custodial care.

Three Reasons Every Client Needs LTCIn almost every case, our clients should own LTC to guard against three worst-case scenarios:1. Beingremovedfromtheirhomeand

“forced” into a nursing home.2. Beingaburdentotheirfamilyand/or

loved ones.3. Spending all of their money on LTC-

related costs and expenses thus disinheriting their family.

What Is The Best Age To Buy LTC?Obviously there is no way of knowing who will actually need LTC insurance in the future. Although the cost of LTC varies from state to state, the average cost of a full-time, professional LTC facility ranges from $6,000-$12,000 per month. That’s about $100,000 per year!

So here’s some food for thought. If these are the approximate LTC costs today, just imagine what these numbers will be in the next 10-20 years? This is exactly why I tell my clients that purchasing LTC insurance “can either be a small mistake or a big one.”

To help determine the best age to buy LTC, below are some valuable facts, considerations, and guidelines:

1. The longer you wait, the higher the price. There are two reasons why. First, regardless of your health condition, LTC prices always increase with age. Second, the older you get, the less healthy your body becomes.

2. LTC costs are virtually guaranteed to increase when you factor in the following:• Theexponentiallyincreasingnumberof

people who will be needing but unable to afford LTC in the decades ahead. The fact that every insurance carrier (and the Government)grosslymiscalculated,underestimated, and underpriced LTC costs and expenses.

• Yearsago,manyinsurancecompaniesoffered LTC insurance. Today, only a handful of the strongest and most credible carriers offer LTC policies.

professionals like us. The reason this is so important is because our job is not just to help them design and find the most affordable policy from the best company but most importantly show them how to fit something into their budget.

• Misperception, Misunderstanding, and Misinformation — An overwhelming number of people falsely believe they are already covered by their health insurance, HMO, Medicare, or Medicare Supplement. One of the biggest misunderstandings about LTC is the false hope and expectation that the government will provide for their care. What many fail to realize is that, before the government will provide you any help, you must spend all of your own money…sell all your own assets…and ultimately reach the point where you are completely impoverished. In other words, the only time you are eligible for government assistance is when the worst-case scenario occurs — you qualify as “financially indigent” aka flat broke.

• Necessary Conversations — One of the most unfortunate reasons many of our clients don’t own the protection afforded by LTC insurance is because we, as their entrusted financial professionals, are not proactively initiating this necessary conversation often enough and soon enough.

It’s Only Too Soon…Until It’s Too Late As financial professionals, we know most of our clients hate the thought of buying and even worse needing LTC insurance. This can be evidenced by the fact that even though many of our clients are young and healthy, rarely do they proactively reach out to us and say something like; “I know I am going to need LTC insurance in the future, so I’d like to talk to you about a policy.”

What this means is that too many financial professionals are overlooking, ignoring, avoiding, or postponing the necessary LTC insurance conversation. In doing so, this increases the probability of our clients developing a medical condition, having an accident,and/orbecominguninsurable.No matter how much money our clients have, nobody can purchase a LTC policy once they acquire certain high-risk medical conditions, or if they have already reached a place where they need LTC. Furthermore, the longer we wait, the older our clients become, and the greater the probability LTC becomes unaffordable.

Sadly, my experience over the past 30 years is that when someone approaches me aboutthingslikeFuneralorBurialinsurance

The Register | September-October 2016 Page 17

or LTC insurance, they are almost always older in age, poor in health, and attempting to acquire these kinds of insurances at a time of need when they either cannot qualify for it or cannot afford it.

A Win-Win Opportunity My sincere hope is this article helps illustrate two extremely important realities. First, when it comes to LTC insurance, we have a job, duty, and obligation to proactively address this all-important topic with our clients. Second, we have a tremendous opportunity to provide our clients with some much-needed protection. In doing so, this can only strengthen our relationships, value, and practice.

As financial professionals, rarely can we use theword“guarantee”.Butthereareseveralguarantees we can discuss with every client; their age will increase; their health will decrease; their need for LTC will increase.

Having said that, it cannot be too soon to have this necessary LTC conversation with our clients…but it can be too late.

Christopher P. Hill, RFC®, is the President ofWealthandIncomeGroupLLC,withmultiple branch offices in Virginia. Chris began his 28-year career in the financial services industry by spending his summers as a college intern for a major stockbrokerage firm. After graduating college withaB.S.inFinance,hespentoveradecade working with the Senior Portfolio Manager of a leading money management firm. In 2001 Chris formed his own company with a primary focus on wealth management.

Contact: 540.685.4321 chris@wealthandincome.com www.wealthandincome.com

Christopher P. Hill, RFC®

Securities offered through O.N. Equity Sales Company Member FINRA/SIPC. Investment Advisory services offered through ON Investment Management Company.

Page 18 The Register | September-October 2016