Educating Clients about Long-Term Care Planning Options

financial advisor meeting with couple
Mary Sizemore
Mary Sizemore July 13, 2023

With over 25 years of experience, Mary shares her industry knowledge by helping agents and their clients navigate various insurance products. She also stays up to date on current products and trends to support, mentor, and guide her teammates.

As an insurance agent or financial advisor, you often take on the role of both educator and student. You are constantly learning about new products and strategies in order to educate your clients on the best solution for their situation.

When The Krause Agency was originally established, we focused primarily on crisis planning with Medicaid Compliant Annuities—helping agents accelerate Medicaid eligibility for their clients who didn’t plan ahead for their long-term care costs. Now, however, we provide both crisis planning and pre-planning solutions. Pre-planning offers more options for your clients to choose when, where, and from whom they receive care. That said, both strategies have their place in long-term care planning.

As an agent or advisor, it is your duty to educate your clients about their options and help them determine which option is best for their health and wealth.

Long-Term Care Planning Focus Areas

Here are a few common areas to focus on with your client:

Medicare and Long-Term Care: Many Americans believe the common misconception that Medicare will cover their long-term care services, especially those who haven’t been exposed to a caregiving situation. The reality is Medicare will not pay for long-term care if the care recipient only needs custodial care. Custodial care is non-medical care that helps individuals with their activities of daily living (e.g., bathing, dressing, eating). Rather, Medicare provides coverage for rehabilitative care in specific scenarios and for a limited period.

Medicaid and Long-Term Care: Medicaid is the largest payer of long-term care costs in the U.S. In fact, 62% of residents in skilled nursing facilities are Medicaid recipients. Over half of Medicaid expenditures for long-term care were paid for home and community-based services (HCBS), which include residential care facilities. To qualify for Medicaid, your client must meet income and asset restrictions that vary by state. If your client has too many assets to qualify, they can accelerate their eligibility by crisis planning with a Medicaid Compliant Annuity.

Transferring Your Client’s Risk to LTCI: The high cost of long-term care, especially in a skilled nursing facility, is shocking to many agents and clients. When designing a long-term care insurance policy, it’s important to keep these costs in mind, though most LTCI claims (70%) are paid for at-home care. Many individuals want to avoid entering a nursing home. With LTCI, your client will likely receive care at home. When discussing LTCI with clients, we recommend focusing on a meaningful benefit that will pay for care in the home. This will keep your client’s premium more budget-conscious while addressing their concern about how to pay for care.

Now is the best time to brush up on your knowledge of planning strategies for your client’s long-term care expenses. After all, we should never stop learning. The Krause Agency is committed to bringing our agents and advisors the best solutions for your clients. For more information about the products available in your state, please contact our office at (800) 255-1932.