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Published in the September 2000 issue of Financial Planning magazine, www.financial-planning.com

How to Get Clients to Discuss LTC Insurance
by Phyllis Shelton

The 14th Private Long-term Care Insurance Conference in Monterey this year focused an entire morning on A Social Marketing, which appears to raise the awareness of the consumer about the need to plan for long-term care. In the Q&A that followed, I went to the mike and applauded their efforts. Then I said, now what are we going to do about raising the awareness in the agent and financial planner community? Much of the time, I believe we are our own worst enemy, because the #1 myth about long-term care insurance continues to prevail in the financial planning profession, and that is, that long-term care insurance is nursing home insurance for old folks. As long as the planners buy into this, is it any surprise that the general population views it that way?

I've been asked to write about how a financial planner can get his or her clients to discuss the need to plan for long-term care.  The first step in answering that question is for me to say, educate yourselfMake sure you aren’t harboring any preconceived ideas about this topic. It's extremely hard to convince someone else of something we either don't know or don't believe ourselves, right?

After ten years of owning my own long-term care insurance training company and writing a book and other materials for consumers to communicate the need to plan for LTC, I have distilled the essence of destroying the myths and building the need with a client to discuss this topic with you into a 2 1/2 minute conversation, that I call the Micro Sales Presentation.  Most of the time, it will raise the awareness enough to get someone to spend more time with you. Let’s look at it now, because as we look at it, it may just change an idea or two that you have been hanging onto about LTC insurance.


Without proper planning, long-term care can be the greatest threat to our assets today, and we're not just talking about nursing home costs.  In fact, most people will never be in a nursing home, because 85% of long-term care is extended care at home or in the community like assisted living or even adult day care.  Did you realize that most long-term care is not in a nursing home, Mr/Mrs. _______________?

Another huge misunderstanding about long-term care is that it doesn't just happen to older people.  40% of people needing it today are working-age adults between the ages of 18-64 due to accidents C many of them automobile and sports related like Christopher Reeve C and conditions like MS, brain tumors C and 1/3 of the people who have strokes in the US are under 65!

(Editor's Note: Even if the prospect is over 65, this statement is still important because the prospect may have children or other younger family members to ultimately share as a referral.)

Long-term care is very expensive and runs about $50,000 - $100,000 a year on up depending on where you live for either an eight-hour shift at home or a semi-private day in a nursing home with drugs and miscellaneous supplies.  This cost will at least triple in the next 20 years! The life span of an Alzheimer’s patient is anywhere from 3 - 20 years, and if both you and your spouse need care, you can see how these numbers explode. Did you realize, Mr./Mrs. _________, that costs in your area average $ _________ per year for LTC?

Unfortunately, most long-term care expenses are paid for out of people's pockets C out of the savings they are accumulating or have accumulated to enjoy their retirement.

Why?  Because long-term care isn't covered by Medicare and other familiar forms of insurance like group or individual health insurance, Medicare supplements, retiree health plans, HMOs, VA plans, or disability income plans.

And, the odds of the government helping you are so low. You have to be down to $2000 (in most states - say amount for your state, if different) in assets in your state before the welfare program, which is called Medicaid, will help.  So you have to be really poor to get that kind of help, and there is increasing interest in making it a criminal offense to intentionally give your assets away to qualify for Medicaid. Did you realize how limited the option for Medicaid or any type of government assistance is now, Mr/Mrs. ______________?

On top of all this, the odds of needing long-term care are greater than 50%, much higher than losing a house by fire or being in a car accident and often at a far greater cost than losing our whole house.  (This won't be nursing home for most us, but home care can cost just as much or more than nursing home care.)

In other words, Mr/Mrs. _____________, you don’t look out your bedroom window and see 1 out of 2 houses burning, and yet you wouldn't think of not having a homeowners' policy, even if your mortgage is paid off, would you? Or of not having car insurance even if you weren't legally required to?

Mr/Mrs. _____________, right now your assets are your insurance policy against a risk that is very expensive, very likely to happen, and is not going to be paid by anything else.  Do you see any reason why you wouldn't want to protect yourself and your family if you can so you can have peace of mind in case something happens to you now, plus you can also look forward to a comfortable, worry-free retirement with financial security?

To make it even easier for you to learn, here’s the key points:


  1. LTC can be greatest threat to our financial security without proper planning.  (Establish definition of LTC - Most people think of as just nursing home - is that what you think of?)
  2. 85% of LTC is not in a nursing home C mostly at home. (Did you know?)
  3. 40% of people needing LTC are ages 18-64 C give examples
  4. Costs average $                / yr. (Customize for area.) (Did you know?)
  5. Costs to triple in 20 yrs. Lifespan of Alzheimers patient 3-20 yrs.
  6. Most LTC expenses out-of-pocket expense or welfare.
  7. Not covered by private health insurance or Medicare
  8. You have to be poor to get government help
    • Must spend down assets to $________.
    • Interest is increasing to pass legislation that will criminalize asset transfers to qualify for gov't help.
  9. Odds of needing LTC are greater than 50% (probably will be home care, not nursing home)
  10. Don't see 1 out of 2 houses burning or 1 out of 2 cars having accidents (Get agreement)
  11. Do you see any reason why you wouldn't want to protect yourself
    • very expensive
    • very likely to happen
    • won't be paid by anything else

Mr/Mrs. _____________, right now your assets are your insurance policy against a risk that is very expensive, very likely to happen, and is not going to be paid by anything else. Do you see any reason why you wouldn't want to protect yourself and your family if you can so you can have peace of mind in case something happens to you now, plus you can also look forward to a comfortable, worry-free retirement with financial security? (Get agreement)

So, id you learn anything?  I believe that anyone over age 18 is not too young to think about long-term care insurance as many policies go down to that age. The younger people are when they purchase, the longer they pay, but the less they pay over their lifetime than people who wait. But the most important reason to buy as young as possible is because of stories like these:

A 29-year-old had a massive stroke a month before her wedding day. Her fiance continues to care for her 11 years later - her mind is fine, but she communicates with her eyes and is confined to a wheelchair. They live with her parents.

A 25-year-old Cookeville, Tennessee man who slammed into the side of a dump truck that pulled out in front of his motorcycle was discharged from a nursing home seven months later after an extended coma, then spent the next three years relearning every skill he was born with - his wife's life stopped with his as she stayed by his side the past three years.

A 49-year-old Nashville woman still raising her 11-year-old son, bed-ridden in her 11th year of Lou Gehrig's disease, her muscles and body virtually petrified. She taps out Morse Code through sensors attached by Velcro to her fingertips which signal a laptop computer to write and speak her thoughts through a synthesized voice.

A 26-year-old in a coma after an automobile accident in which he was forced off the road by the driver of the car he was passing who was angry because he forgot to dim his headlights.

And the true cost of waiting is that the longer you wait, the larger the benefit you have to buy due to inflation and it costs you more because you are older.

So back to the question, how do you get your clients to listen?  Including long-term care insurance in the annual review is essential, of course, but whether you bring it up then or you do a special contact just for this purpose, here's what you say: AYou know, Bob, I've always done my best to take care of your financial planning needs. There's a very important need we haven't discussed yet, and that is the need to plan for long-term care.  I have learned so much about how important it is that I am contacting all of my clients, regardless of age, and giving them the information they need to plan. It’s your business, as it always is, as to what you want to do with this information, but as your financial planner, it’s my job to give you this information.  Now I can give you the highlights in about 2 1/2 minutes, then if you see the need, we’ll set a time and develop a firm proposal.

At that point, it is very easy to slide into the micro presentation. Some of you won’t even have to do that, as your clients trust you enough to agree to have the conversation just by using the wording in the above paragraph. Note that it's critical to say Aregardless of age when you use the above language; otherwise, people get insulted because they think you are telling them they are old.

Now let's explode the myth I hear from many financial planners.  AMy clients are wealthy. They don't need long-term care insurance. Sorry, folks, but that's like telling me they have enough money to waste!  Here's a moving story from one of my national trainers, David Miller:

Dave sold long-term care insurance to a man who owns 10 McDonald’s.  He was understandably shocked that this gentleman wished to purchase insurance and asked why. With tears in his eyes, the client pointed to an oil painting of a young man, who was probably in his 30's and said, ”That’s my reason for wanting to do this. That is our son who was killed in an automobile accident 17 years ago and I want to make sure his children, my grandchildren, will be taken care of for college and someday buying their own homes, and I want to take care of my other kids and grandkids. I don’t want ONE DIME of my money every going to a nursing home!” Dave understood quickly that here was a man who was determined to spend his money on his family just as much as it was in his control to do so and sold him and his wife long-term care insurance policies to help him accomplish that goal.

If your client believes in homeowner's insurance when the mortgage is paid off, how can long-term care insurance not be needed when there is a much greater chance the client will need LTC and in many cases, at a much greater cost than replacing his entire house?  And by the way, your clients are probably envisioning 24-hour a day home health care, and at today's costs, that runs about $120,000 and up. (In high-cost areas like New York, Massachusetts, Connecticut, and parts of California, you can double that - and that’s why some insurance companies offer up to a $500 daily benefit.)

I'll leave you with a little tidbit you may or may not know - a gift from the IRS that says:

Since HIPAA clarifies that LTC insurance is treated as health insurance, the premium is included in qualifying medical expenses for the annual gift tax exclusion, as long as the premium is paid directly to the insurance company.  The policy must be a QUALIFIED (based on the HIPAA definition) LTC policy, and this provision reads as follows:"a donor has a gift tax  exclusion for payment by the donor of medical expenses of the donee" per IRC Sec 2503(e).  The amount of the premium that qualifies for the gift tax exclusion is equal to the HIPAA allowed amounts based on age. Qualifying  expenses also include QUALIFIED LTC services as long as payments go directly to the provider of care and not to the family member. "Qualified" services  means the care recipient must be certified by a licensed health care practitioner (doctor, registered nurse or licensed social worker) as being expected to need help with at least two Activities of Daily Living (bathing, dressing, transferring, toileting, continence, eating) for at least 90 days and/or have a severe cognitive impairment.

So no more excuses about too wealthy - I’ll see you at a training seminar!  To really get the ins and outs of this enthralling market, call 800-844-4893 or hit our web page (www.ltcshelton.com) for our national training schedule and to get the 2000 version of my book, the Long-Term Care Planning Guide, and a free catalogue of our many other training and consumer education materials!

Phyllis Shelton is President of LTC Consultants, a Nashville, Tennessee-based consulting company that specializes in long-term care insurance training and educational materials.

2000 Shelton Marketing Services, Inc.

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