Long-Term Care Insurance: Do I Need to Share My Financials and Wills?
I’m 64 and in the process of purchasing a long-term care (LTC) insurance policy with a $120k upfront premium from One America, which includes a “return of premium” option. My “financial advisor” is asking for a lot of my personal financial information, living wills, and more.
I can’t shake the feeling that I’m being drawn into something unnecessary. All I want is to secure the policy, and I thought that would only require my medical records.
Can anyone clarify if providing all this personal financial information is really necessary for an upfront payment? Am I being taken advantage of? Any guidance would be appreciated.
It’s understandable to feel uncertain when navigating the purchase of long-term care (LTC) insurance, especially with a significant upfront premium involved. Here are a few points to consider:
Role of Financial Advisors: While it’s common for financial advisors to request a comprehensive view of your financial situation, it’s essential to clarify their reasons for needing that information. A good advisor will want to ensure that the LTC policy fits well within your overall financial plan, but it’s fair to ask for transparency about their role and the necessity of the information they’re requesting.
Needs Assessment: LTC insurance and financial planning are interconnected. Your financial situation might affect the type of coverage you can afford, how much coverage you need, and how the policy fits into your long-term financial strategy, including estate planning and wills.
Personal Information: You shouldn’t have to share more personal information than what’s relevant to the LTC insurance application itself. This typically includes medical records and possibly some basic financial information to determine your eligibility and premium structure. If you’re uncomfortable sharing certain documents, let your advisor know and see if you can limit the information to what’s necessary.
Second Opinion: If you’re feeling uneasy about the process, consider seeking a second opinion from another financial advisor or insurance expert. They can provide additional insights and help you evaluate whether your current advisor’s requests are standard practice.
Return of Premium Feature: Be sure you understand the terms of the “return of premium” feature in your policy, including any conditions that apply. This can be a valuable aspect of the policy if you find you don’t need long-term care.
In summary, while some financial disclosure may be necessary, you have the right to feel comfortable about what you’re sharing and why. Make sure you fully understand the benefits of the policy and the rationale behind your advisor’s requests. If something doesn’t feel right, it’s always okay to seek clarification or additional counsel.