Insurance Agent vs Financial Advisor

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Who can Sell Long-Term Care Insurance?

Financial Advisor/Planner

Financial advisors and planners provide several services, such as investment management, retirement planning, and estate planning. Along with these services, they may sell other products, one of those being Long-Term Care Insurance to protect your assets from future costs of long-term health care such as in-home aid or nursing home costs.

Local Insurance Agent

Your local insurance agent can sell many different types of insurance, Long-Term Care Insurance being one of them. Typically, local insurance agents will represent just one company for an umbrella of products.

Independent Insurance Agency

These insurance agencies often offer many different insurance products. Some will also offer Long-Term Care Insurance. 

An independent insurance agency that has a specialty in Long-Term Care Insurance acts as a neutral resource in working with all major insurance companies. Agencies have an increased array of knowledge and experience in long-term care planning and the underwriting process of insurance policies.

Long-Term Care Specialist 

A Long-Term Care Specialist is an insurance agent who has substantial experience in Long-Term Care Insurance, underwriting, policy design, and claims experience. The specialist may work as a captive agent for just one insurance company, or on their own, representing multiple insurance companies. Some specialists work with an agency and some agencies specialize in Long-Term Care Insurance.

Most specialists represent all or most of the leading insurance companies that offer Long-Term Care Insurance. They typically have five or more years of experience in the field, although some have as many as 20 or more years of experience.

Since there are a  limited number of true Long-Term Care Insurance specialists in the country, many help consumers in multiple states.

Which One Should You Use for Long-Term Care Planning?

Many clients will turn to their financial advisor about long-term care planning so they can protect their assets from the high costs of care they might need later in life. Often, advisors give out incorrect information. This can drastically affect the cost and/or usefulness of the insurance policy when the time comes to use the benefits.

The same can be said of general insurance agents and local agencies.

Financial advisors and general insurance agents and agencies often have minimal experience with long-term care planning, lack a full understanding of the partnership program available in 45 states, and have never processed a claim. 

Generally, a financial advisor or general insurance agent or agency is not your best option when it comes to planning for the financial costs and burdens of aging.

It’s good practice to leverage a team of specialists to plan for your future (or current) retirement. A financial advisor can help you grow assets, and a Long-Term Care specialist can safeguard those assets from the impact of longevity. 

Separating this advice helps you plan for a successful retirement. Long-Term Care Insurance is very complicated for agents and advisors because each insurer has its unique underwriting standards, featured benefits, and price points. 

Additionally, many consumers should be taking advantage of the federal/state partnership program to obtain additional dollar-for-dollar asset protection that many states offer for qualified long-term care policyholders. This program requires certification to sell such policies. The fact is financial advisors, and general insurance agents are not well prepared in this area.

At McCann Insurance Services, Inc., we have over 20 years of experience in helping people all over the country plan for the financial costs and burdens of aging. Matt McCann, a nationally known expert in long-term care, is one of a few specialists, nationwide, endorsed by the American Association for Long-Term Care Insurance (AALTCI). AALTCI is a national consumer advocacy and trade organization.

What Happens When You Don’t Work with a Specialist

We have worked with thousands of individuals nationwide over the past twenty-plus years. We have seen firsthand the poor advice some of them have received from their agent or their financial advisor. For example, consider these examples of how working with someone who is not a real specialist can be problematic.

A 51-year-old single male from Missouri saw both his parents need long-term care. The cost of care had a dramatic impact on his parent’s savings, and his sister helped part-time being a caregiver. He spoke with the insurance agent that provided his home and auto insurance, and he convinced him to buy a plan which ran $6055.50 a year in premium.

Luckily, he had performed his own due diligence and found us. Upon reviewing his health, finances, future retirement plans, and listening to his concerns, we found an outstanding partnership qualified policy from a major company. 

His annual premium would only be around $1,200 a year instead of the $6055.50 a year plan his local agent recommended. We also discovered he has been living with his longtime partner. The insurance company we chose allowed for a partner/spousal discount, which reduced the premium to a little over $1,000 a year!

This would have been a costly mistake if he had not found a specialist in Long-Term Care Insurance. He did his own research, and it resulted in saving him $5,000 a year.

A couple from Texas, ages 57 and 54, had their financial advisor recommend long-term care planning. Planning for long-term care was something they had been thinking about, as they knew longevity ran in their family. They knew the risk of needing long-term care at some point in their lifetime was high. They wanted to protect their lifestyle and not burden their three adult children and their families.

The advisor suggested they buy a single premium life insurance policy with a rider for long-term care (note these are different from “hybrid” policies that provide standard triggers for long-term care along with a death benefit). The cost was going to be $135,000, but it did have a death benefit. After letting their advisor know they would think about it, they did an internet search to get more information.

We discovered this life insurance policy had a rider with language in it that would only pay for long-term care if their impairment was expected to be permanent and lead to death. 

The bottom line was this was one costly life insurance policy.

We recommended a Texas Partnership Certified Long-Term Care Insurance policy with a shared care benefit from a major insurance company. They received outstanding benefits that were a fraction of the cost of the life insurance policy. It also provided inflation benefits, case management, and a shared spousal benefit. The shared benefit allows a spouse to use money from the other spouse’s policy in the event they exhausted their benefit account. Additionally, if one spouse dies, the premium disappears 100%, and 100% of the available inflated benefit goes to the surviving spouse.

Since the husband owned his own business, they were able to deduct the premium as a business expense. The couple was thrilled to keep their $135,000 and paying a small premium with the tax benefits and the extra dollar-for-dollar asset protection offered by the Texas Partnership Program.

We spoke with a 63-year-old woman in Maine. She applied for a Long-Term Care policy but was unsure she made the right decision. She went with a major life insurance company, but the premium was costly. Plus, the agent, who mainly helped clients with life insurance and annuities, recommended a very high level of benefits.

After asking about her background, we discovered she was planning to move to Alabama, where her sister and her family lived. She had already bought the land where she planned to build a new home before she retired.

We found a very affordable plan from a major A-rated company, which was much more affordable. We also recommended benefits that better fit her specific situation. The plan was designed to match the lower cost of care in Alabama, where she would soon live.

A couple from Oklahoma, ages 60 and 57, were about to apply for a Long-Term Care Policy, which was an Oklahoma Partnership Policy with a major company. They wanted to speak with their financial advisor first. The financial advisor suggested a less expensive plan, which did not have any inflation benefits, just an option to buy more insurance every three years. A policy without an inflation benefit made the plan ineligible for the Oklahoma Partnership’s dollar-for-dollar asset protection

It also, at their age, would require the couple to keep buying options to keep up with the higher cost of care every three years. Since the additional inflation options are priced based on your “attained age,” each accepted option would become even more expensive each time. 

Also, once they start receiving benefits, they would no longer have the option to purchase more.

Once they saw the benefit of inflation, the very affordable premium, and the extra peace-of-mind with having the partnership benefits, they ignored their financial advisor’s recommendation because they understood they were not a Long-Term Care specialist.

A couple from Illinois, ages 55 and 52, were making plans to protect their future retirement from the costs of long-term care. Their specific concern was Alzheimer’s. The wife’s mother, father, and uncle all had Alzheimer’s. Their financial advisor, who asked almost no advance health questions or family history questions, recommended a major company for their policy. 

Once underwriting was completed, the wife was declined for coverage, and the husband found his rate going from the quoted “preferred” rate to a “select” rate due to his health history.

The wife was declined because the company’s underwriting guidelines clearly stated that having two or more blood-related family members (parents and siblings) who had any history of dementia made them ineligible to obtain coverage. 

The financial advisor should have known, but like most financial advisors and general insurance agents, they did not understand the guidelines, nor did they even ask the questions.

Luckily, we found very affordable coverage with another insurance company.

A couple from Georgia, ages 57 and 54, started to think about long-term care and how it would impact their income, savings, and lifestyle. They were all prepared to apply for coverage when the wife heard a radio talk show host suggest waiting until they were age 60 to get Long-Term Care Insurance.

She waited. A few years later, when the husband was 60, they contacted us. However, the husband was uninsurable since he had been diagnosed with Parkinson’s. They were devastated. The wife did get a plan, but her premium was higher due to her older age. Plus, she lost her full spousal discount.

A 75-year-old woman from South Carolina always thought about who would take care of her when she became older. Once her husband passed away, she decided to look into Long-Term Care Insurance.

Multiple insurance agents told her that she was too old to get any new coverage. After speaking with us, we found her a plan which provided two years of care, which was affordable for her budget, and she health qualified.

This 56-year-old was an engineer. He was a divorcee with one adult daughter. His concern was not placing the full stress and burden of his future care on his daughter.

We showed him a very affordable plan. He qualified for preferred health discounts. However, he wished to analyze his options and run the numbers.

He asked us to follow-up with him in six months. He never returned our phone calls. However, a year later, we received a call. He was now interested in purchasing a Long-Term Care Insurance policy.

After re-reviewing his health, we discovered that he was now on three medications, including a blood thinner for Atrial fibrillation.

The result was he had to wait for his health to stabilize. He longer qualified for preferred rates. His premium was much higher due to his health and his age. He was lucky he had options available.

Talk to a Long-Term Care Insurance Specialist

The fact is few insurance agents, and financial advisors are prepared to help you plan for long-term care. Their lack of expertise in underwriting, policy design, and claims and cost you money.

Additionally, if there is a problem during the underwriting process, most agents and financial advisors don’t have the experience to address the issues or deal with underwriters and doctor’s offices.

Matt McCann and his team are experts in long-term care planning. Matt understands Long-Term Care Insurance and uses his 20+ years of experience to find the best coverage at the best value. This experience gives you and your family peace-of-mind, knowing you made a solid decision without over-insuring or spending more than what they should to safeguard assets and reduce the tremendous burdens that come with a long-term care event.

Matt is licensed nationwide and represents the major insurance companies. His job is to match your age, health, family history, and other considerations to shop all the top companies to find you the best options at the best value.

His unique process allows an individual or couple to view his computer screen on their own computer while speaking to him on the phone. It’s an easy and pressure-free way to learn and compare all the options from all the companies.

Keep in mind; insurance premiums are regulated. Anyone talking to you about Company A will have the same rate schedule. The difference is the experience in finding the best coverage based on your specific health, family history, asset level, and concerns. 

Finding the right company, along with the appropriate policy design, will help you have affordable coverage so you can safeguard savings and income and reduce the stress otherwise placed on your family. The goal is to give you the peace-of-mind knowing you have the right plan to address the financial costs and burdens of aging.