The Long-Term Care Family Fire Drill

Preparing your clients to think about the issues of aging

By Adam M. Sachs, CFP®, CLU®, ChFC®, CLTC
and Erica Mellone, CLTC

Mr. Sachs and Ms. Mellone are financial advisors with Centinel Financial Group, LLC in Needham Heights, MA. They can be reached at 781.446.5006 or by email at [email protected] or [email protected].

As individuals are growing older and living longer, many are realizing they may need some type of assistance in later years to live with independence and dignity, preferably in their own home.  For individuals that have taken action by purchasing long-term care insurance, they have placed a great deal of control into their own hands.  Long-term care needs in later years becomes a family issue – physically, financially and emotionally – not to mention complex.

We know that long-term care insurance can help relieve the burden on family members and give clients options in their care, but the subject overall is a difficult conversation that many family members chose not to address with each other.  Starting to prepare today by talking with members of the family allows for proper planning, expectations of roles and intentions, and positive decisions to take place.  Even if you never need this type of care in later years, you can at least have the comfort of knowing that you took action if a claims situation were to ever arise.

With this in mind, our firm has instituted a Long-Term Care Family Fire Drill for our clients and prospective clients.  For our existing clients who own long-term care insurance, we call them on their policy anniversary and suggest that we have a fire drill for their immediate family members.  We want to make sure that in the event something happens, the people that would be most likely involved in the process of filing the claim would be at this meeting and be able to be informed.  During this meeting, we explain that we will review the policy, what role their other insurance plays, as well as other information, so their family would be more prepared in the event something happens. We realized the importance of this family meeting, based on an experience we had with one of our clients several years ago, Mr. “Jones”.

Facing the onset of Alzheimer’s

Mr. Jones called us in a panic.  By the time he found his wife wandering from what had been diagnosed as Alzheimer’s disease, she had developed hypothermia and was in the hospital.  Mr. Jones was understandably distraught.  He was exhausted after weeks of taking care of her and the emotional toll that he had been experiencing.  We realized in talking with him that we needed to speak to someone else in Mr. Jones’ family who may be able to assist in the next steps of the claim filing process.  We asked who in his family was helping him the most with his wife.  Without hesitation, he stated his daughter, Joan.  After receiving permission, we spoke to Joan and helped her initiate a long-term care insurance claim for her mother, and ultimately a business relationship continued with Joan.

After this experience, we realized that helping prepare our clients, and their children, for a long-term care claim, could be one of the most valuable areas of service that we could bring to the relationship and extended family members. This includes helping the family prepare for the claims process and understanding the benefits of their long-term care policy before a claim needs to be filed.  It also provides a method for the entire family to have a dialogue regarding other financial planning concerns and questions, particularly those the children may have in regards to their own specific circumstances.

Mr. Jones called us in a panic. By the time he found his wife wandering from what had been diagnosed as Alzheimer’s disease, she had developed hypothermia and was in the hospital. Mr. Jones was understandably distraught. He was exhausted after weeks of taking care of her and the emotional toll that he had been experiencing

As our practice has grown, we have created a niche focus that is run by Erica Mellone, CLTC.  Based on the specific experiences that she has had, having seen her grandparents need extended care, she helps serve our firm’s clients by educating them and their families on their planning opportunities during a long-term care or other financial emergency.  Many of the clients that we meet with expect the purchase of long-term care insurance to be simple and transactional, but we take the time go through the process of what to expect in the event of a claim emergency so that everyone is prepared as a family unit.  This helps clarify everyone’s expectations and facilitates a dialogue that allows everyone’s intentions to be heard and understood.

The following is the process we walk our clients and their family members through as part of The Family Fire Drill.  The claims process involves several steps, and if a client and their family members are aware of the process beforehand, it will be smoother and help the family spend more time focusing on preparing for care vs. worrying about what to do when the time comes for a claim.

At the meeting, we share a brief outline that includes:

  • Current benefits of the client’s coverage
  • A review of the long-term care claims process including a review of Medicare and Skilled Nursing Facilities vs. Rehabilitation Hospitals
  • A review of the long-term care marketplace including potential rate increase information
  • A discussion of long-term care legislative issues within our State
  • Estate conservation topics
  • Retirement issues such as longevity, inflation and sequence of returns risk

Creating dialogue among family members

Our clients have told us that the benefits of this meeting with their family members helps them have a better dialogue between themselves, and us as their advisors.  It helps clarify and reinforce the benefits of the policy that the client has purchased, giving them comfort in their decision making process.  It addresses potential scenarios that could arise in the future, such as premium increases or the role your children may have to play as medical advocates.

The process has also had additional benefits in that we are able to foster new relationships with the children of our clients so they have a financial professional to turn to when they have questions relative to their own circumstances.  It has also established new relationships with other professionals such as estate planning attorneys.

Preparing individuals for what they may face in the future is more than just providing a product, service or concept.  It is about focusing on the relationship.  If you can service your client proactively, particularly in preparing for a family crisis, all parties can feel more capable, confident and secure in knowing they have protected what is most important to them and those that they care about most.

Registered Representative/Securities and Investment Advisory Services offered through Signator Investors, Inc. member FINRA, SIPC, a Registered Investment Advisor. 160 Gould Street, Suite 212, Needham Heights, MA 02494. (781) 446-5000. Offering John Hancock Insurance Products. Centinel Financial Group, LLC is independent of Signator Investors, Inc., John Hancock and any affiliated companies. 501-20130611-145889