Asked if she recommends long-term care insurance to her clients and if she's purchased it for herself, Seattle planner Therese Govern groans. Her response is not unusual.

Other financial planners use words like "unpalatable" and "imperfect" to describe long-term care insurance products. But, despite misgivings, many of them - although certainly not all - conclude that they and their clients should shell out for this kind of protection.

As most financial planners know, decisions about long-term care insurance are difficult. Choosing a provider and a long-term care policy means choosing a plan to live out your last days; it is an extremely emotional calculus.

Add to that the fact that some insurance providers and policies fail to deliver as promised. Then recognize that it is difficult to determine just when it is an opportune moment, in terms of health conditions and life expectancy, to apply for coverage. Is there any doubt why the option of just saying no looks mighty attractive?



Many financial planners, particularly those whose clients have significant assets, do just that when the question of long-term care insurance arises. "It's not for our clientele," says John Przybylski, director of financial planning at Federal Street Advisors in Boston, which has $4.2 billion in assets under management. "They are self-insured."

Przybylski, whose firm serves clients with at least $15 million in assets, says that he hasn't signed off entirely on the notion of long-term care insurance for himself, but that his clients don't like insurance in general and believe that, with this type of product, "there are a lot more unknowns."

But other financial planners say that without $10 million or more in assets, an individual cannot presume that he or she is adequately self-insured for the unknown.

"Given my client population, I lean toward saying, yes, buy long-term care insurance," says Govern, who has $19 million in assets under management. "None of my clients have more than $10 million net worth" - so she believes that none of them could adequately self-insure themselves for the high and ever-increasing costs of long-term care for an extended period without facing significant erosion of their assets.



Govern recommends that most of her clients buy insurance to cover two or three years of long-term care - not lifetime coverage. Given its costs, she says, nobody should buy lifetime long-term care coverage.

She concedes that even shorter long-term care insurance products are "very expensive" and "you have to hold your breath," because the industry has a history of imposing steep premium increases. She also notes that the financial ratings of some insurers providing long-term care products are questionable.

Her clients' willingness to follow her advice about buying long-term care insurance varies, Govern says. "It depends on what they have seen their own parents go through," she explains.

Govern recalls one client in particular who struggled with the decision. "I don't know if this is appropriate to ask," Govern remembers him saying before asking if she had long-term care coverage.

The advisor, who is 50, says she told her client "not yet" because she still pays life insurance and long-term disability premiums, but added that she expects to replace those payments with ones for long-term care insurance as she approaches her late 50s.



Laila Marshall-Pence, a registered principal at Pence Wealth Management in Newport Beach, Calif., used to put herself in the camp of financial planners who discourage clients from seeking long-term care insurance. For many years, "I never recommended it," recalls Pence, who has $800 million in assets under management.

But two years ago, an episode close to home prompted Pence to revisit the issue. Doctors recommended that Pence's mother stay temporarily in a private nursing home after surgery to recover.

When Pence visited the long-term care facility to visit her mother, she was appalled. Her mom had been placed in a room with four other women, who all shared one bathroom. The facility's lack of attention to cleanliness was startling, Pence says.

One nurse cared for 19 patients, Pence recalls, adding that her mother was not receiving the attention she needed to recover from her surgery.

Within 48 hours, Pence arranged to have private nurses attend to her mother 24 hours a day. This expensive proposition caused her to realize that, for her own daughter's sake, she needed to structure some kind of insurance that would cover such care for herself and her husband if the need ever arose.



But rather than opting for a standard long-term care insurance policy, Pence purchased a life insurance policy with an accelerated-benefits rider that promises to pay out all or part of the death benefit if the policyholder needs it for long-term care.

Pence says such policies do not have the use it or lose it feature of other long-term care insurance. Under life insurance policies with such riders, heirs receive the full payout if the covered individual dies without ever needing long-term care.

This is the approach that Pence now recommends for her clients. Among other features, she likes that, when long-term care is needed, the insurance requires no preapproval or proof of payment to receive benefits. Rather, once an individual qualifies as needing long-term care, the payments are made in cash.

Pence says that her clients' stories, like her own experience with her mother, have convinced her of the need to establish some sort of plan for long-term care needs.

"It really came home" to Pence in a conversation with a woman who was acting as the sole caregiver for her husband, she says. "When her husband died, the client came to me and said, 'Laila, if he hadn't died, I was going to die. The caregiving was going to kill me. I really felt like I was praying for him to die.'"



Others are not convinced that advisors should widely recommend long-term care insurance. For instance, planner Thomas W. Lawson of T.W. Lawson Financial in Ann Arbor, Mich., rarely recommends it for his clients - most of whom, he says, hold significant assets. Lawson, who declined to disclose his solo practice's assets under management, says he doesn't have long-term care insurance himself, either.

"It's overpriced," he says, "and has limitations." He notes that, in some instances, expenses related to long-term care are not even covered.

Lawson will go through analyses 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 management client advisor at Gries Financial 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 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," Horvath says. "We often have to tell clients, '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."



Nancy Lynn Skeans, a partner and managing director at Schneider Downs Wealth Management Advisors in Pittsburgh, says she and other planners at her firm, which has $700 million in assets under management, also fall somewhere in the middle of the long-term care insurance debate. They don't insist on long-term care insurance for most clients, but they don't rule it out 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.

She finds that clients "can accept that better" as an analysis of long-term care insurance based on portfolio protection concerns.

Skeans also notes that "a lot of people don't want to spend what it takes to cover premiums on long-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 unfavorable time for their investments.

But if they had long-term care coverage, they could have waited out the downturn until the markets rose again.



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 health issues.

She also believes, however, that long-term care should be coupled with self-insurance plans. Lenander says that based on what she has seen, many individuals will need both. She asks clients to start thinking about it when they hit their 50s.

Conveniently, her husband, an insurance broker, sells long-term care insurance, and both she and her husband have acquired policies for themselves. "I'm very strong on this one," Lenander says.



Miriam Rozen, a Financial Planning contributing writer, is a staff reporter at Texas Lawyer in Dallas.

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