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The art of LTC

Long-term care. All of you will have heard of it, some may have even

advised in this area but most of you may prefer to put off thinking about

it for a few years yet. It is probably filed under “good potential” or “not

core business” or “must get round to thinking about it one of these days”.

If this is the case, you could be missing a big business opportunity now.

More important, your clients could end up depleting the very assets that

you have helped them build up and safeguard.

Research, carried out for PPP lifetime care by theBritish Market Research

Bureau in May this year, canvassed the opinion of a nat-ionally

representative sample of 920 adults aged 20 and over and shows that your

clients are already thinking about this issue.

They know if they have assets they will have to pay for their own care

and, perhaps most important for you, they want financial advice on

long-term care planning.

The key findings from the research indicate:

People believe there is a one in two chance they will need professional

care in old age.

Within the AB social group (those most financially at risk), four out of

five people believe they will have to contribute towards the costs of such


Two in five of these people expect to consult an IFA about covering

themselves against the cost of care.

IFAs then have a crucial role to play in ensuring their clients are

protected from the costs of care.

The average cost for a year&#39s stay in a nursing home is £19,084

(Laing and Buisson, 1999) and the cost can be much higher in London and the

South-east. It would not take long for these costs to make a serious dent

in someone&#39s savings and assets.

The research also shows that nearly half of adults know at least one

elderly personin need of care – on average, they know two – and one adult

in seven is involved in pro-viding care for at least one elderly person.

So people are very aware of the burden of care and they want advice on how

to plan for it. But I believe the ball is in the IFA&#39s court in raising the

issue. So, when are the most appropriate times to discuss LTC with your


Retirement planning is the most obvious time to discuss the protection

offered byLTC insurance.

You will probably be exploring ways of using the lump sum from a pension

as your client&#39s financial situation changes to asset-rich, income-poor. A

healthy portfolio is good news but what might happen to those funds if the

need for care arises?

If you have recently advi-sed on investment businessor inheritance tax

planning, there is an ideal opportunity to revisit these clients and ensure

their estate is also protected against LTC costs.

There are products on the market that will pay for care costs and return

your client&#39s initial investment, whether or not they need care. This is a

straightforward and attractive proposition to discuss with your clients.

These are just a couple of examples and most providers offer dedicated

helplines to support your sales and marketing activities.

This can take the form of relevant facts and figures on care costs, the

basic product features and benefits andfurther ideas on how to approach


The Government will very soon outline its recommendations on funding LTC

but itis clear that many elderly people who have a reasonable level of

assets will still be liable for a substantial proportion of care bills.

IFAs have an important role to play in ensuring their clients get the

choices they want if the need for care arises.


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