Most financial professionals recommend that clients consider long-term-care insurance in their late 40s and early 50s, when they are still in the middle of their careers. The relatively small number of carriers for these products means it’s important for clients to act early if they want to lock in better pricing. Clients overwhelmingly wait until they are approaching retirement before they actually purchase long-term-care insurance, however.
Bertrand believes many clients balk at purchasing long-term-care insurance earlier in their careers because of the cost—even if the price is more favorable at an earlier date, they still wind up having to pay the premiums. To match the needs of younger individuals who exhibit reluctance, he suggests looking toward hybrid products that can help fulfill multiple needs. “Life insurance policies or annuities can both be packaged with longterm- care riders or a living benefit that provides long-term care,” says Bertrand. Solving multiple issues connects products and actions more closely to a client’s needs, making it easier for them to perceive their value.
The number of clients taking action as they reach their mid-career and approach retirement roughly mirrors the number of financial professionals who recommend they make those purchases at those times. Nevertheless, nearly a quarter of clients (24%) wait until they reach their traditional retirement years to purchase an annuity, well afterthe vast majority (87%) of financial professionals recommend they do so.
Bertrand believes lack of education plays into delays in purchasing annuities. “Annuities come into the conversation when clients need the income, but clients don’t always know their purpose or how using them would help,” he says. Age-based planning can actually help here, since it’s generally good to get clients thinking about an exit strategy for their retirement assets around the age of 50. Since they likely have a larger 401(k) balance at that time, a distribution strategy or protection strategy needs to come into the conversation. Again, Bertrand stresses that educating clients about annuity products needs to take place in the context of their financial situation and their retirement strategy.