Long-term health care products are evolving quickly, in some cases being combined with annuities or life insurance policies, and advisors need to keep up with the changes, says one consultant.

“Financial advisors need to start the conversation about long-term care with their clients and then go to experts for the details,” says Deb Newman, founder of Newman Long Term Care and former chair of the board of directors of the LIFE Foundation.

Long-term health care costs are the biggest unfunded risk in retirement, partially because traditional policies have gotten more and more expensive, she says.  Anyone who reaches age 65 has a 70 percent chance of needing long-term care eventually, Newman says.

Numerous hybrid products have been introduced and more will be developed as the need grows, Newman says. The variety, however, iis confusing  consumers and advisors.

In addition to the traditional long-term care insurance policies that stand alone and provide coverage for a monthly premium, hybrid policies, also known as linked benefits, have been developed.

Single premium life insurance policies can have long-term health care coverage written into them. A 65-year-old man might pay $90,000 for a life insurance policy that pays a mofrdy $120,000 death benefit. But the policy will include long-term care coverage that pays up to $240,000 at $5,000 a month, explains Newman.

Another linked product is an annuity with long-term health care coverage.  Sometimes a person has an old life insurance policy that is no longer needed. The money can be transferred to an annuity with a long-term care rider, she says.

“The advisor can look at the entire portfolio and will know if there is money that is not needed for retirement income that can be converted to some type of long-term care coverage,” she says.

A method of making long-term care more affordable is to alter the inflation coverage. If the policy provides for a lower percentage to compensate for inflation it will be cheaper. “It means less coverage when you need it, but it makes the policy more affordable,” Newman says. A top-of-the-line traditional policy now can run $7,000 a year.

“One of the challenges is to get advisors to discuss the subject. Their clients do not want to talk about dying, becoming disabled or living too long. But long-term care coverage is not just a financial issue,” Newman says. “Having coverage provides peace of mind.”

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