Financial Planning - November 2012

CLIENT

with clients if they ask about such options, and he helps them evaluate whether a policy purchase is necessary. One client who ignored his advice and bought long-term care insurance, was quite happy that she did, Lawson concedes, since she subsequently received a diagnosis of the first stages of Alzheimer’s disease. “She was very pleased she had not listened to my advice,” he says.

Brent Horvath, a wealth manage-
ment client advisor at Gries Finan-
cial in Cleveland, says planners
at his firm, which manages about
$500 million in assets, don’t issue
an emphatic thumbs up or down to
long-term care insurance. Instead,
he says, “we look at if the client can
self-insure.”
Although his firm’s planners
haven’t carved any numbers in

some planners believe
$10m
is what it takes to
self-insure adequately
for long-term care.

PORTFOLIO SECURIT Y
Nancy Lynn Skeans, a partner and
managing director at Schneider
Downs Wealth Management Advi-
sors in Pittsburgh, says she and
other planners at her firm, which has
$700 million in assets under man-
agement, also fall somewhere in the
middle of the long-term care insur-
ance debate. They don’t insist on
long-term care insurance for most
clients, but they don’t rule it out
term care insurance.” She points out
that if clients had needed long-term
care at a time when the markets
were dropping sharply, as in 2008,
and they didn’t have such insurance,
they would have had to pull out
from the market at a highly unfavor-
able time for their investments.

COMBINED STRA TEG Y Some advisors have little ambivalence about the product. LeAnn Lenander, owner and president of Lenander Financial Advisory in Minneapolis, recommends long-term care insurance highly. The 72-year-old financial planner has many clients who are her age and older, and who are facing increasing

Critics complain that long-term care insurance is overpriced, packed
with limitations and sometimes sold by companies with shaky finances.

stone, they generally believe a single individual needs at least $5 million to self-insure.

But Horvath says he doesn’t necessarily promote long-term care insurance to clients whose assets fall below a benchmark.

“It’s a tough conversation,” Hor-
vath says. “We often have to tell cli-
ents, ‘Your financial plans look good,
your plans to leave something for
your kids work, but one thing that
could seriously derail things is long-
term care costs.’”
What about for himself?

“I’m kind of at an age where it hasn’t come up yet,” says Horvath, who’s in his 40s. But his parents have acquired long-term care insurance. “I recommended they do that.”

either, she says.

She doesn’t offer a hard-and-fast number for the assets that are needed before a client may forgo such insurance. Instead, Skeans says, she approaches the question as one of portfolio security.

“If a client is really concerned about erosion of their portfolio and if you can buy long-term care insurance for half a percent or a percent of their holdings, you are protecting their portfolio with that,” Skeans says.