For many Americans, “self-funding” potential Long-Term Care (LTC) is the prevalent (default) planning strategy.  However, while your clients can “go it alone,” the real question is, why would you let them?   Self-funding future LTC needs means an unlimited level of risk for clients and their loved ones, which is counterintuitive to prudent financial planning!   Implementing insurance-based LTC Planning becomes the logical conclusion after considering the following….

Managing Expenses is NOT the same as Managing Care

Paying for care and managing care are not the same problem. While clients think they may be financially capable of absorbing the cost of a Long-Term Care event, they are rarely positioned to manage the complexity of care itself — coordinating physicians, monitoring providers, adjusting care plans, and advocating for quality in real time as conditions change.  When no structure exists in advance, those responsibilities fall by default to spouses or adult children, who are forced to act simultaneously as caregivers, care managers, and medical advocates — often without experience, authority, or objectivity.  

A properly designed LTC plan separates financial capacity from care management. It provides access to independent healthcare professionals whose sole responsibility is to assess needs, coordinate services, monitor care quality, and adapt the plan as conditions evolve. This function is not about convenience; it is about governance.  Planning for Long-Term Care is not merely about funding an expense. It is about ensuring that care decisions are made by qualified, independent professionals — not by families improvising in crisis and chaos.

Eliminate Family “Conflicts of Interest”

Unplanned LTC events create unavoidable conflicts of interest — not because families are unethical, but because incentives are misaligned.  When care must be paid for out of general assets, every decision implicitly pits quality of care against preservation of inheritance, liquidity against longevity, and one family member’s time against another’s finances.  These conflicts are not moral failures; they are structural design flaws.

Families are forced to make care decisions while simultaneously acting as caregivers, financial stewards, and future beneficiaries — roles that should never coexist.  A dedicated LTC funding strategy resolves this conflict at the source by separating care dollars from legacy assets, removing financial ambiguity from care decisions. The question becomes what care is needed, not what it costs the family.  That is not a feature of insurance — it is a function of proper risk containment, and proper planning does not eliminate difficult decisions.  It eliminates conflicted ones.

Burden Quantified

When Long-Term Care is not planned for, the burden does not disappear — it is transferred. Families absorb it through lost income, unpaid labor, emotional strain, and fractured relationships. That is not a personal choice; it is the predictable result of leaving a material risk unaddressed. LTC Planning exists to prevent that transfer by containing the liability before it becomes a family obligation.

Asset Protection

You insure what you can’t afford to lose — not because you can’t pay the bill, but because the liability is unlimited. Absent long-standing bias ingrained over time, Long-Term Care risk would be treated the same way. It is high-probability, open-ended, and duration-driven. Insurance-based LTC planning does not eliminate cost; it caps your exposure, and that is asset protection in its purest form.

Asset Allocation Models

Harry Markowitz won a Nobel Prize by proving that portfolios should not absorb risks the market does not reward. Long-Term Care risk is non-diversifiable, timing-dependent, and uncompensated, which makes it incompatible with portfolio theory. Isolating that risk using excess income or a modest reallocation of low-yield assets improves portfolio efficiency without increasing market exposure. The goal isn’t return enhancement — it’s removing a liability the portfolio was never designed to carry.

Now is the time to help clients proactively address Long-Term Care in your comprehensive financial & estate planning.  Self-funding is not a choice; it's an unplanned default position.

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