Financial advisers have an obligation to help female clients plan for future health care needs and expenses, including evaluating the options for long-term-care insurance and Medicare, according to a panel of experts participating in an InvestmentNews webcast Tuesday.
“Failing to help clients plan for health care is reckless and irresponsible,” said Thomas West, financial adviser with Signature Estate & Investment Advisors, LLC. “There's a variety of different options, but it begins with having a conversation.”
He recommended asking women — and, really, any client — about their health care plan straight out: “What's your plan, and how are you going to pay for it?”
Some clients tell him that they expect to rely on their children for care toward the end of their lives. That response earns a raised eyebrow from Mr. West.
“If your plan is to move in with your kids, then you should probably tell your kids that's your plan,” Mr. West said. “It might require a financial solution that draws on the means of more than just one individual.”
Advisers should be helping clients determine whether they can afford long-term-care insurance and get them to consider different options, such as LTC riders on universal-life products and annuity products, the panelists said.
After evaluating hundreds of long-term-care policies, Mr. West has never recommended that a client drop the coverage, he said, adding that new policies typically aren't as good as the older ones.
If LTC insurance is appropriate, clients should be buying it as early as possible because it affects the costs they will pay ultimately, said Ron Mastrogiovanni, chief executive of HealthView Services, a firm that helps advisers and consumers estimate future health care costs.
Advisers will find women — who are likely to live alone at the end of life because of divorce or death of a husband — are eager to discuss health care costs because it's something they are worried about, said Katy Votava, president of Goodcare.com, which consults on health care economics.
“Bringing up this conversation is key because it's on their minds,” she said. “Women are planners, and they are very concerned about these issues. When you engage them, they are going to listen and to want to participate in the conversation.”
Ms. Votava recommended that advisers help clients “shop smart for Medicare” and evaluate certain items, such as medication costs, under different plans because there are great variations.
“Help them shop for coverage,” she said. “It isn't too late to get going this year.”
The Medicare enrollment period lasts through Dec. 7, and anyone affected by Hurricane Sandy can apply for an extension, according to Ms. Votava.