The Long-Term Care Insurance Analysis clearly demonstrates to clients the impact that LTC costs can have on their hard-earned assets, and how that impact can be addressed by purchasing an LTC insurance policy.
You can access the LTC Analysis in RightCapital within the Insurance > Long-Term Care module of each and every client plan:
There are two tabs within the LTC Analysis: Impact and Coverage. Both are covered here; let's jump in!
The Impact tab of the LTC Analysis highlights the impact of a client's projected long-term care costs on their overall invested assets. The graph on this page highlights invested assets in the final 10 years of the plan; the blue bar highlights assets without LTC costs, and the purple bar highlights assets with LTC costs.
The purpose of this graph is to demonstrate the reality of how LTC costs can significantly erode a client's investments in the later years of their plan. You can use the legend to hide/highlight certain elements, or hover your mouse over the chart to view yearly dollar values.
How does existing LTC coverage impact the chart?
Any existing LTC insurance coverage that is entered into the Net Worth section of the Profile will be factored into the purple invested asset bars (Assets w/ LTC expenses & existing insurance).
The chart on the Impact tab will illustrate the impact of the LTC costs reflected in the Goals section of the Profile, within the Annual Retirement LTC Cost data card:
Please click on the dropdowns below for more information on...
RightCapital allows you to choose between a number of national averages for LTC, including in-home care, assisted living, and nursing home care. You can also choose the 'customized amount' option to enter your own annual dollar amount for one or both clients.
We review and update these averages on an annual basis.
LTC expenses can occur anywhere from 1 to 10 years from the end of each client's plan. A client's end of plan is determined by the 'Planning Horizon' input, which is entered into the Client and Co-client cards within the Profile > Family section.
To remove long term care costs for a client, you can select the 'No long term care' option within the timing dropdown.
The green portion of the bar chart illustrates the impact of any proposed LTC insurance coverage entered within the Action Items at the bottom of the page. Within the Action Items, dial in the details of the proposed LTC coverage for one or both clients, and then click the Refresh button in the lower right:
With proposed LTC coverage entered, RightCapital will calculate the impact of the policy on the client's overall invested assets. The results are displayed in the chart (in green), as well as to the right of the chart. This key metric highlights potential retained assets when an insurance policy is purchased to protect against the impact of expensive long-term care at the end of a client's plan.
Pro-Tip: Before and After
It can be easier to see the insurance impact if the blue bars are removed from the chart. You can hide the blue bars by clicking this item within the legend beneath the bar graph. This is a good practice for presenting the before-and-after effects of proposed LTC coverage to clients!
The Coverage tab highlights additional information on a client's total projected LTC costs, feeding in from the Profile > Goals > LTC Cost card (see 'LTC Cost and Timing' above for more). This page provides you with simple, intuitive visuals detailing how much of a client's LTC costs will be covered by current and proposed LTC insurance:
Current coverage reflects coverage from existing LTC insurance policies entered into the Net Worth section of the Profile. For more information on entering existing insurance policies into a client's plan, click here.
Any LTC insurance that has been proposed within the Retirement Analysis > Action Items will also be reflected as 'Current Insurance' within the LTC Insurance Analysis.
Proposed additional coverage reflects coverage from the policy proposed in the Action Items section within the Long-Term Care Insurance Analysis (see 'Proposing LTC Coverage' above for more).
The % coverage shown in the center of each pie chart represents the total amount of LTC costs covered by both current and proposed coverage.
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