Occasionally, your client will come to you with their existing long-term care insurance policy and ask you to take a look at it. You might hear things like, do we have enough coverage? Are we paying too much? Can and should we add to the policy? Some advisors do these reviews proactively on an annual basis. This can be a good way to stay in touch with your clients and it enables you to be aware of what kind of insurance policies they have. This is an effective tool for financial planning and provides insight into your client's needs for the future as well as establishing your role as an advocate for your clients' financial planning.

• Review the schedule of benefits. See when the policy was issued and how old your clients were when they were issued. Often the policy has been in existence a long time and the client has paid quite a bit of premium into the plan.
• Take a look at the monthly or daily benefit, benefit pool and inflation to determine if there is adequate coverage. Keep in mind that if this is a stand-alone long-term care insurance plan and if the client is thinking about lapsing their policy they would stop paying premium and all that premium paid in would be lost.
• Typically with older policies it is best for the client to keep the plan. Even if they are looking at a premium increase it is usually more expensive to get something new than keep the older plan with an increase.  Older plans usually have some nice built-in features that are not available anymore such as lifetime benefits.
• The other issues are health and age. If a policy is 15 years old, obviously the clients are now 15 years older causing premiums on a new plan to be higher and there could also be health issues that were not present when they bought the plan. Conversely, if clients recently bought a plan and are asking for a review, sometimes it can be more cost-effective to design an alternative plan or a second policy to boost benefits. Be sure to ask your clients if everything is the same with their health since they bought their policy.

The objective is to be effective in helping your clients plan for their future whether it is with a standalone long-term care policy, a linked-benefit product or even self-insuring. The important questions is: DO you have a plan in place for living a long life?  

 View last week's post, "Tips on How to Survive a Rate Increase."