Why buy a Cadillac when you need only an economy vehicle? asks Nancy Skeans, an advisor for Schneider Downs Wealth Management Advisors in Pittsburgh, which has $950 million in assets under management.

The question seems direct enough, but Skeans is not talking about cars. Rather, she is referring to long-term-care insurance policies. Specifically, she thinks many of her married clients should consider spousal-sharing long-term-care riders, which allow a couple to buy a set number of years of coverage that can then be used by either spouse.

Statistics show that it is rare for a person to need long-term-care that lasts more than three years, so the spousal-sharing option makes economic sense. For one price, a couple may be able to gain coverage for all their needs. "Anytime a couple is looking at long-term care, there are different ways it can be priced," Skeans says.

Her clients often balk at the prices quoted for traditional LTC coverage for both spouses. Even though LTC insurance providers usually offer married couples a discount, Skeans often recommends that they consider reducing their premiums even further by buying one policy to cover both individuals.
"The likelihood these days is one of them is going to end up in a nursing home," she says, but it is less likely that both will need such coverage. If they choose the spousal-share LTC insurance riders, the spouses are betting that both of them won't need long-term care at the same time. Like any wager, that bet carries some risks, Skeans warns.

But Skeans is not alone in thinking the risk is worth taking. "We use spousal sharing as our default option for long-term-care insurance for couples," says Benjamin Birken, an advisor with Woodward Financial Advisors in Chapel Hill, N.C., which has $200 million in assets under management.

The spousal sharing allows couples to have each spouse buy peace of mind for reduced prices compared with what individual policies cost. "People think of it as a pool of resources for their family unit," he says.

Miriam Rozen is a reporter for Texas Lawyer who writes about financial planning and services.

This story is part of a 30-day series on better serving seniors.

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