Despite a growing need for investors to start thinking about their long-term care needs, a study from Lincoln Financial Group, found that only 16% of more than 2,500 people surveyed are very familiar with the features and benefits of long-term care solutions.

Long-term-care needs usually pertain to assistance with activities of daily living, including bathing, dressing or eating. A long-term-care solution will help to pay for some of those costs.

 

Medical bills can accumulate putting a person’s finances in jeopardy, increasing the need for investors to save early so they have enough to pay or defray the costs of medical bills. Those concerns do not appear to impact many investors, according to the study that Philadelphia-based Lincoln released. 

Advisors are not having these conversations with their clients on the topic and many do not even know what long-term care even is, the study found. 

“The disconnect comes from just starting to have that conversation,” said Bill Nash, head of MoneyGuard Distribution at Lincoln.

The survey found that 36% of those surveyed just do not want to have the conversation while 29% do not want to have that conversation with their families.

Lincoln conducted the study in October online and heard from a few thousand respondents. The exact number ranged depending on the question from 2,662 to 3,023. The study found that of those surveyed, less than 40% who have worked with a financial advisor have discussed a long-term care plan. 

The advisors’ challenge comes from broaching the topic with their clients. Many do not know when or how to start.

The best time is to incorporate it during an annual review, Nash said. He suggested starting with high-level questions such as if the client has thought about care, what their plan is, the type of care they want, who will help them, and where they want that care if it is at a facility. 

As for when advisors should start that conversation, Nash said it is never too early but said a good time is around the client’s 50th birthday, when the concern for long-term care begins to manifest. However, the advisor cannot be the only one to address the topic.

“I do think that there is some responsibility on the client,” Nash said. “But some of that is around first having a conversation with their family so they can have an educated well-intentioned conversation with their financial professional.”

There aren’t any triggering events that prompt the talk of long-term care such as when a new child arrives, it prompts a conversation about saving for college. However, an outside event could put the topic at the forefront in an investor’s mind.

“It can come when a person has a personal experience that they can relate to,” Nash said. “Once somebody has a personal experience … there is a definite sense of urgency ... it creates an ‘a-ha’ moment that is a catalyst for a conversation.”

Lincoln offers a series of services to help advisors engage their clients in the discussion about long-term care including an expanded team who will help the advisors determine when to have that talk.

The firm also has other resources available such as tools that provide a real-world cost break down for how much care facilities cost throughout the country. 

Finally, Lincoln offers its MoneyGuard product suite of products, which focuses on long-term care planning. They help accommodate advisors’ clients who want to start saving for long-term care. The firm rolled out a unique version of its fixed income hybrid long-term care product to tremendous success.

While the fixed version had been the norm for years, the firm heard from advisors that there is a need for a flexible version. So, in February last year, it launched the MoneyGuard Market Advantage, which is the first-ever variable hybrid long-term care product.

“It fits in with the value proposition that advisors built their business on,” Nash said. “This market gives advisors and clients the ability to grow their benefits tied to market participation.”

Since the product launched in February of 2021, it has accounted for 45% of sales within the firm’s MoneyGuard product suite. In addition, about 30% of the advisors using the product are new to the discussion about long-term care, according to Nash. 

The firm is looking into expanding its products, although Nash declined to go into specifics. The next one will complement Lincoln’s fixed and variable offering, Nash said.