The Answer to Your Clients' Long-Term Care May Be Their Life Insurance
Near the top of the worry list for anyone considering retirement is the fear their health will deteriorate so much they’ll be forced to seek long-term care, a situation that could leave them and their families slammed with expenses far beyond what they can afford.
Surprisingly enough, the solution to this particular problem may be right in their home, tucked away in a drawer.
Many people don’t realize that a life insurance policy can be converted to pay for assisted living, home care and all other forms of long-term care. What’s really sad is that, when they’re suddenly confronted with the reality of long-term care expenses, some older people may let the policy lapse, figuring they can no longer afford it. And it’s the very thing that holds the answer to their financial worries.
Part of the problem is that while millions of people own life insurance policies, few of them understand their rights as owner.
Life insurance policies are assets. Think of them just like a house. The owner of a house wouldn’t just move out without selling their property. Why should the owner of a policy ‘move out’ without first finding out what the real value of the policy is?
GWG Life, a leader in providing solutions for seniors, is getting the word out to agents and advisors about two new programs aimed at helping to solve the problems many clients face in post-retirement:
The LifeCare Xchange Program with solutions that include benefits exempt from Medicaid spend-down requirements and used for post-retirement expenses such as long-term care and other health care costs.
The Book of Business Review Program where GWG Life representatives review your book of business to find clients who could benefit from the LifeCare Xchange Program.
These programs are aimed at finding new ways to serve your clients, even those you may not have been in contact with for years. The options we are offering move beyond simple cash transactions to sources of income to pay for needed care and expenses at a time when other options can be greatly limited.
Here are a few key facts about how a life insurance policy can be converted to a long-term care benefit plan and potentially rescue from the senior and their family from the back-breaking financial strain of long-term care:
- The benefit plan is not long-term care insurance. A long-term care benefit plan allows policyholders to use a universal life or term life insurance policy to pay for long-term care. In essence, you can turn a death benefit into a “living benefit” that covers the expenses of the policyholder now.
- You can convert when you need it. You can’t wait until you’re about to move into a nursing home or assisted-living facility to buy long-term care insurance. At that point, it’s too late. But you may be able to convert a life insurance policy to a long-term benefit plan at any time. There are no waiting periods, no care limitations and there are no costs or obligations to apply.
- The full death benefit comes into play. The value of the exchange is not limited to the cash value, but is based on a variety of factors including life expectancy and health. If qualified, the senior will receive money they can use for their long-term care benefit plan. If the insured person dies before the benefit amount is exhausted, any remaining balance is paid to the family or the named beneficiary as a final lump-sum payment.
Fidelity's Retiree Health Care Cost Estimate shows that a couple retiring today is faced with an average cost of health care of $260,000 over their retirement and families can go broke trying to provide for a loved one. For many, this could have been avoided it had they only known about this solution.
Solving Your Biggest Client Issue May Be at Your Fingertips
Written by: Shileen Weber
When the American Funds’ Capital Group asked 400 advisors last year to name the biggest issues they face in their businesses, it wasn’t the DOL, market uncertainty or the economy that sat in the center of the idea cloud of answers.
It was client issues.
At a time when regulatory concerns and market turbulence would seem to be at all-time highs, the advisors who answered the survey were most concerned about servicing their clients as well as ways to find new ones and grow their businesses.
It’s one of the ironies of the business, that the things most people find so hard to manage – creating financial plans, managing assets and staying ahead of events – are what advisors find to be the easiest parts of the business. Marketing - the business of selling themselves – can be the area advisors find the hardest elements to master.
In this age of instant communication, it can be even more intimidating to market your practice, especially to younger clients for whom many traditional methods like newsletters, postcards and phone calls don’t work anymore. For them, email is the preferred way to get information, and, if it’s important, they are more likely to respond to texts, not phone calls.
But, it doesn’t have to be that hard. The digital age gives you access to ideas and content of all kinds you can use to touch your clients in a way that positions you as a valuable resource. The key is to keep it simple, stick to some basics and create consistent outreach that clients and potential clients are interested in and will appreciate you sharing with them.
Here is a common-sense approach you can take that will not require you to hire an expensive agency or take valuable time away from managing your clients’ assets and running your business.
Content is King
Create a content calendar for the year: Think about reasons to touch a client 13 times during the year – that can be once a month and on their birthday. (The common rule of sales is that it takes at least 7-13 touches to make a connection.) The number is limited and keeps you from inundating the clients who likely already feel inundated with content. You can take the seasonal approach – tax planning in the fall, January for account review content, college financing in the spring – and supplement it with topical events during the year. Creating a calendar will help you stick to a plan. Here’s one resource for a content calendar.
Review what content is already available to you: Basically, this means finding the resources you already have and determining what pieces will be most valuable to your clients. Start first by checking out content your broker-dealer already generates that you can personalize. Many firms have economists who write regularly about the market. That’s content you can pass along to keep clients up-to-date they would not have access to anywhere else. In addition to your broker-dealer, mutual funds, your clearing firm, and money managers are all excellent sources of informative and even analytical content.
Personalize the content you use: Add your name, the client’s name or some way to avoid making it feel like canned content that you are using just to check the outreach box. See what capabilities your email program may have to help you.
The birthday strategy: One advisor used clients’ birthdays in a new way. Instead of the card or lunch date, the advisor asked the client’s spouse for a list of friends he could invite to a birthday lunch and made it a memorable event that was also a soft approach to getting referrals.
Become a curator of good content: What your review will show you is that you don’t have to generate the content yourself. You can point clients to pieces you find insightful. You are likely already doing this every day just to keep yourself informed. The next step is to compile it and send out the very best pieces to your clients, again, with a note with your own thoughts about why you found it valuable.
Find out what is working and do more of it: Use your client interactions, in-person and online, to find out what types of content clients liked and any they didn’t. You can use tracking on your emails to see how many were opened as a measurement tool, but the personal interactions tend to provide more insight than raw data.
Be disciplined about your execution: Get help from an office assistant or schedule the time each month to do the content development and outreach. As any good strategy, if you make it a habit, it won’t seem so hard.
Most importantly, be yourself and be personal: You may want to regularly get personal by talking about your family and hobbies. The ultimate is if you can provide content that is personal to your clients, not just about their investments – they get that from their statements, apps and online portals. Think alma maters, hobbies, children and parents.
Of course, as a disclaimer, you have to make sure all content and communications are complying with regulations and the rules of your own broker-dealer.
The process of creating a plan will get you thinking about your clients in a new way. That exercise alone can re-energize your business and get you seeing marketing opportunities in places you may never have seen them before.
Shileen Weber is Senior Vice President of Marketing and Communications at GWG Holdings. She was previously Director of Online Strategy and Client Experience at RBC Wealth Management, where they placed first in two JD Power and Associates U.S. Full Service Investor Satisfaction Study (2011 and 2013).
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