Cedric L. Watkins II, MBA, J.D., has had an extremely close view of what happens when someone does not have long-term care insurance. When his uninsured dad was suffering from Alzheimer’s disease and diabetes, his sister attempted to care for him. After two months of seeing concerning behavior (such as nearly causing an explosion with the oven) and managing his daily needs, she couldn’t handle it anymore.
“Her sleep patterns were broken getting up every two hours to change his diaper, give him his insulin injection and take him to dialysis,” said Watkins, a 27-year MDRT member from Los Angeles, California, who focuses on wealth management and estate planning for business owners and high-net-worth individuals. “He needed specialized help.”
Conversely, when his sister died in 2018 after suffering from the same illnesses as her father, her long-term care insurance covered the cost of a nursing home when she couldn’t stay home anymore. When Watkins’ wife suffered from breast cancer, long-term care insurance paid for nurses to bathe, dress and feed her for more than three years.
So it’s no surprise that Watkins is, in his words, a preacher for this kind of coverage. But how do you broach the topic with clients, who may already be reluctant to consider long-term care insurance before even delving into the difficult-to-consider matter of family members with debilitating illnesses?
Why would you put your children in that position when you can take a tax-deductible $200 a month and alleviate the situation?
Watkins suggests using these questions:
Have you ever had a family member who needed help when they got older?
“It’s a great opening question — 98% of people will say yes,” Watkins said. “Then they tell me stories like when they were a kid and couldn’t go to the movies because they had to stay home and take care of their grandparents.”
How would you feel if I explained how you could use tax-deductible, qualified long-term care insurance to have them cared for?
If people don’t take action, Watkins adds, it can have the effect of grinding an entire family’s life to a halt, in addition to the care being provided not being licensed and reimbursable by insurance. “If you don’t plan as your parents get older, you must be prepared to eat away your assets,” he said.
Discussions of this coverage are more complex than simply making sure people realize the need to purchase while they qualify, however. Family health conditions can be extremely sensitive subject matter, causing denial and procrastination. Watkins has had clients tell him, “We’ll do that when we get in our 50s,” only to wait until their 60s and then 70s and have it be too late by the time they actually wanted the coverage.
So it might be as simple as advisors asking, “How are your mom and dad doing?” But it’s also about being willing to broach the topic of coverage with someone who has a family history of any number of serious illnesses. Or taking the conversation beyond that and asking, “Do you like having the freedom to travel knowing that your family is taken care of?” or “How do you feel about your children leaving their spouse to come take care of you?”
“Most parents in the past would say that their child loves them so much they will come take care of them,” Watkins said. “When I ask how that would make them feel, most of them will say, ‘It wouldn’t make me feel good at all.’
“So why would you put your children in that position when you can take a tax-deductible $200 a month and alleviate the situation?”
These questions can be asked during annual reviews or during random check-ins with clients of appropriate age (40 or older). Once in a while, Watkins said, a client claims to have enough money saved up that they can pay any expenses. But that’s obviously the exception and, no matter how much money people have, most would rather avoid costs than incur them.
But not when it comes to making sensible decisions about caring for family members.
It’s why after his father struggled so severely, Watkins paid premiums for his mom, who also wound up requiring care for Alzheimer’s. “When she turned 78, she needed the coverage, and it was waiting there for her,” he said. “It gave her a quality of life she wouldn’t have had if she was at home by herself barely making it.”