LTC Planning for Younger Clients

	LTC Planning for Younger Clients By David Adler
	In 1988, the average age of a buyer of long-term care insurance (LTCI) was 68-years old, according to data from Genworth. By 1998, the average age of a buyer dropped to a comparatively youthful 63. Today, the average age is only 57. What is causing this downward trend in the average age of LTCI purchasers and what could it mean for clients' financial security?

According to Colleen Goldhammer Benzin, Senior Vice President, Long Term Care Distribution at Genworth, there are two main forces at work: "The first is our changing distribution. Second, baby boomers are experiencing care-giving situations with their own parents and are learning first hand what is involved.

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A 2010 Genworth-sponsored survey found that Americans' greatest long-term care anxiety is "being a burden on the family."

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LTCI distribution is indeed evolving, as Benzin notes, and attracting younger buyers in the process. The industry itself is comparatively youthful-at least when compared with other financial products-even though Genworth has been in LTCI for more than 35 years. Originally, most carriers offered LTCI solely through specialists. This career sales force sold LTCI based on direct-mail leads to a limited, older clientele. In contrast, in the past decade, LTCI has been distributed through independent and multi-line agents including Registered Investment Advisors (RIAs)-who have access to many more clients of all ages. Planners have gotten the word out about the economics of LTCI and the advantages of buying when younger, increasing overall awareness.

Says Benzin, "Financial advisors are more aware of the need for LTCI and they are incorporating it into the overall retirement planning process. In addition, the LTCI piece is coming up at a much earlier age in discussion with clients."

The second dynamic at work bringing down the average age of LTCI buyers is as experiential as economic. Baby boomers now have first-hand knowledge of what is involved with caregiving, as they take care of their own aging parents. Simultaneously, boomers are confronting their own mortality, with 10,000 boomers turning 65 every day.

The 2010 Genworth-sponsored survey, "America Talks: Protecting Our Families' Financial Futures," conducted by Age Wave/Harris Interactive, found that Americans' greatest long-term care anxiety is "being a burden on the family." A complementary Genworth study, "Beyond Dollars: The True Cost of Long Term Caring" (2010), demonstrated that caregiving didn't just impact one person-the person providing the care; instead, it had a "rippling" effect across families, affecting numerous relationships.

Watching aging parents and other loved ones need care, coupled with the realization that boomers themselves could impose similar burdens on their families someday, has led to a new appreciation of the value and need for LTCI. "One direct implication of this is that boomers feel more compelled to purchase LTCI for themselves," says Benzin.

Going forward, she expects the trend downward in LTCI buyer age to continue. One sizeable, relatively young potential client group is people who have already completed funding for most of their other needs such as college funds for children; this group is financially well positioned to turn their attention to long-term care. A second growth area for LTCI is in the employer space, where access to LTCI coverage could be offered to employees who are, in some instances, quite young.

These developments couldn't come at a better time. "The issue is not going away," says Benzin. "We have a rapidly aging population and people have to deal with the need for LTCI." Education is key, including conversations between clients and planners about these issues. But education can also come in the more personal form of being a caregiver, as more and more boomers are finding out. "Dealing with a caregiving situation really focuses your attention on LTCI," says Benzin.

Comments

[Olivia Hall]

The article is really informative and beneficial for the senior citizens who needs balanced retirement plans.By knowing certain information,they can make decision to have the best long-term care insurance plan for themselves. A long-term care insurance policy is the best way in which you have to pay in advance and that too in fewer amounts in order to combat future's big financial problems.