Many highly experienced financial advisors are unintentionally offering clients unsuitable recommendations regarding long term care and the risks associated with it. Some of the most common messages being offered by FA’s are as follows:
The “tried and true” advisor that leans on these dated arguments most likely is not an expert at the subject of long term care. They, in many cases, are not licensed by the Illinois Department of Insurance to sell or advise on long term care insurance. License exams on LTC are challenging and rigorous and only those who are licensed should offer advice on this subject.
Inadequate advice in this field has recently spurred a wave of lawsuits against a number of advisors. The suits are being filed by their clients’ beneficiaries. Heirs are upset that their parents’ estate is being depleted to fund extended stays at LTC facilities, and that public facilities are not up to the standard of living their parents earned in their working years.
Additional investing, as opposed to paying insurance premiums, may have been effective for both clients and the advisors in the distant past. However, in recent history and moving forward, it would have been, and will be, mutually beneficial for all parties involved to commit a portion of a client’s portfolio towards a long term care insurance policy. When a client taps into invested assets to cover the expense of long term care it has a negative impact on both the client, their spouse’s retirement, the children, and the advisor’s portfolio of assets under management. A small portion of the pie (sometimes as little as $150/month) being redirected towards a long term care policy would have insulated all parties.
Some additional considerations that your financial advisor may not have told you