For millions of Americans age 60 or older, the following scenario is far too real.
You worked your entire life with a vision of retirement in your mind. You did all the right things in regard to saving: you put money into your 401k plan, maintained an emergency savings account, paid off your mortgage, and put money into college funds to ensure that the costs of college for your children wouldn’t impact your long-term financial goals. Then, out of nowhere, wham! You lost 40% of everything that you worked so hard to build because the stock market tanked at absolutely the wrong time. If you haven’t been through that scenario, I don’t believe that you can fully imagine what it actually feels like. The certainty of your future turns to uncertainty in an instant. It must feel a lot like getting robbed.
If you are a financial planner or investment advisor, you know what it’s like to be on the receiving end of that phone call… the one that can only be summarized by the question, “Are we going to be okay?” If you are being honest, the real answer is “I have no idea.” Nobody can accurately predict the dramatic ups and downs of the stock market. The only certainty is that there will be tremendous ups and downs. It is akin to a pilot always knowing exactly when turbulence will hit. They just can’t do it. They know that there will be turbulence, they can see indicators that it is likely, but expecting them to predict the timing and the severity of the turbulence would be unrealistic.
As if this risk isn’t scary enough for those working hard to achieve a comfortable retirement, millions of consumers are unknowingly taking another enormous gamble. Even worse, their advisors are allowing it. This is self-insuring for future long term care needs and unforeseen medical expenses. I know, I know… nobody wants to think or talk about not being able to care for themselves. But we don’t deal in denial; we have to deal in reality.
Fact is, the statistics are staggering in regard to the likelihood of needing care in the future as well as the expected cost of that care. Most of us don’t want to be cared for, but if we do need it, we want some control over the quality of the care, the professionals who care for us, and the environment in which the care is provided. The question people should ask themselves is “Have I and my advisor actually taken any steps to do something about long term care?”
The greatest risk to living a comfortable retirement is not stock market fluctuations, no matter how dramatic they might be. Instead, it is the potential need for long term care. Think about it: if you could purchase insurance against the market going down in the future for pennies on the dollar, most investors would obtain that insurance in a heartbeat. Yet most people completely ignore the need to protect themselves against an even bigger risk.
Without a doubt the landscape of long term care insurance has, and is, changing. Millions of people with coverage in place are sick and tired of their premiums increasing and their benefits changing, and some of them may decide to drop their long term care policies altogether. Countless kids will be forced to face this reality when their parents drop their coverage and then have a need for care. Nothing is worse for a parent than becoming a burden to their children when they are most vulnerable and their children are unsure what to do.
Enough doom and gloom. The good news is that today’s long term care coverage offers incredible benefits to consumers without the risk of their premiums going up, and more importantly, without requiring policy holders to pay out of pocket for something they may never need.
Most clients today can qualify for long term care policies that will cover them in three scenarios:
No Need for Care – Clients can set money aside that will be safe and can be returned to them at any time. However, should they have any need for long term care while that money is set aside, the product works its magic.
Need Long Term Care – Should the consumer require long term care while the money is set aside, their money multiplies and becomes a significant pool of long term care coverage. It is not uncommon for $100,000 of money set aside to expand enough to cover $400,000 to $500,000 of benefits—all of this while offering consumers the option to get their entire $100,000 back if there is no need for care.
Pass Away – Should the client pass away while the money is set aside, the money again multiplies and is given to the people or charitable causes of the client’s choice in the form of tax-free death benefits.
These products are truly revolutionary and completely underutilized because most consumers and advisors simply don’t understand how they work. They truly can provide insurance for a client’s retirement portfolio and ensure that their assets are not depleted by unexpected medical expenses. Best of all, the client can get 100% of the money back if they never have a need for care, rather than wondering whether they are wasting money on coverage they may never use.
We are proud to offer completely objective and independent evaluations that will help your clients explore products they are qualified to obtain. This will allow your clients to quit taking risk that isn’t necessary and establish some peace of mind in retirement. If only there was the same kind of insurance for ups and downs in the stock market.