Fourth-quarter 2009 found me once again with too much vacation time left and not enough time to use it. So my husband and I made plans to take 2 weeks off to go to Mexico and attain our scuba certification. We made hotel arrangements and booked a flight. We both worked to prepare for the vacation that was approaching quickly.
We planned to leave the day after Thanksgiving and return on December 12. About two weeks before Thanksgiving, I received an early-morning phone call from our eldest son that my 77-year-old mother had fallen and broken her hip. She has been the primary caregiver for my dad, who is 92.
I rushed to their home where my daughter-in-law was staying with my dad while my son was at the hospital attending to my mother. I was left with little choice but to seek some sort of nursing home care for my dad and was extremely fortunate to have found a bed for him at a veterans' facility in a nearby town. He was able to go the very next day.
With my dad in good hands, my mother had surgery, spent 5 days in the hospital and then was transferred to a skilled nursing facility for rehabilitation. We left for vacation, anticipating good times in Mexico and knowing that medically and physically both parents were being looked after as best as could be expected.
About a week into our Mexico vacation, we received a phone call from my husband's brother informing us that my 83-year-old mother-in-law had fallen 2 days after we left and had broken her collarbone. She was hospitalized but released the next day and sent home to be cared for by my father-in-law, who is 87. We also told were that my father-in-law had just fallen and broken his ankle, so both of those parents were now hospitalized and later released to the same skilled nursing facility as my mother.
At the onset of all of this, numerous things happened almost immediately, from the mundane to the critical. Decisions had to be made on whether or not to resuscitate. Was there a living will? Where were the checkbooks? Bank accounts? Who could sign checks? Was there a power of attorney? What type? Where was it? What bills needed to be paid? What type of Medicare supplement was in force? Where were the insurance policies? Where were the wills? Refrigerators needed to be cleaned out. Two extra homes needed to be cleaned, shoveled, heated and maintained. December and January in Maine are both snowy and cold, so vehicles needed to be moved and started.
Without a doubt, one thinks, "What are the odds?"
Discuss some ways to help your personal lines clients prepare for the unexpected. The following recommendations are offered by Mark Patrick, CLTC, a long-term care insurance planner and agent with Genworth Financial in Brunswick, Maine, and Fred Conley, LUTCF, an individual and estate planner with O'Hearn Insurance Group in Portland, Maine.
If your agency has no separate financial services division, you should create an affiliation with a reputable agent or agency first. Products or the planning process are no longer simple and straightforward. Property-casualty agents should secure a working relationship with a financial services specialist to leave the details to the most qualified.
There are several basic steps in the estate and care planning process. In all cases, the sooner your client starts this process, the safer and less expensive the plan will be.
A savvy agency will train its property-casualty and financial services teams to leverage existing relationships back and forth between divisions. All agency staff should be trained to listen for client cues that indicate life events such as:
o Retirement
o Health changes
o Death of a family member
o Marriage
o Divorce
o Birth of a child
o Purchase or sale of property
Property-casualty agents should not be expected to give advice about financial services products, but should act as the liaison to the financial services person. Because rounded accounts have a much higher retention rate and can help reduce E&O exposures, agency management may provide incentives for these referrals.
The agency property-casualty client will be counseled to take the following six steps. Property-casualty staff can reinforce this process when appropriate, and if management approves, the client could be given a "fact finder sheet" to make it easier to gather financial services data. The process of securing information is similar to property-casualty underwriting. Keep business cards from the financial services specialists on hand to give to prospects.
Six steps for clients to develop and implement a financial plan:
1. Choose your team. As needed, choose your attorney, tax professional, insurance professional, trust officer, planned-giving specialist, financial advisor and family members.
2. Gather information. A completed fact finder serves to list your goals and objectives, shows names, ages, assets and liabilities, desired heirs.
3. Analyze data. Pretend death or a disabling condition occurred yesterday. What happens to your estate, your business and your family? What if you die or need continuing care 10 years from now? What will care cost 10, 20 and 30 years from now? You and your team need to analyze the data to provide realistic answers.
4. Team recommendations. Review the suggestions made by your team to overcome plan shortcomings.
5. Decide and implement. Select the plan that best fits your needs and goals. Sign essential documents (wills, durable power of attorney and trusts), purchase needed medical or Medicare supplement insurance, long-term care insurance or linked life or annuity/long-term care insurance and adjust investment strategies as necessary.
6. Periodic review. Because the world (and your estate) is constantly changing, many advisors recommend an annual planning review.
Have clients discuss with their families wishes for end-of-life care and treatment. Communicate this information to your doctor as well.
Tell clients to ensure that their families know where to find important papers, including insurance policies, wills, trust documents, durable power of attorney, list of assets, etc. They should be kept in the same place and well marked. For security and backup, you may want to keep originals in a safe deposit box and copies at home.
Encourage clients to find and visit service providers in their areas that they may need in the future, including state and veteran's facilities, home care agencies, assisted living facilities, continuing care facilities and nursing homes. Ask them to consider selecting the ones they would prefer to use, along with contact people before an event happens. They may also want to consider moving or modifying their existing home by about age 70. A home or condo should have one floor that is handicap accessible or quickly converted to handicap accessible in the kitchen, bedroom and full bath, with a handicap accessible bath/shower. If the home has a second floor, this could be used by company or caregivers.
As you age, the odds that something unexpected will happen increase dramatically--it is critically important to address planning issues sooner rather than later, while you're still able.
Many of our clients have worked a long time to get where they are today. Early planning will greatly determine whether their wishes will be known and carried out and minimize the burden on their families. Finally, if you personally have not considered these issues, start the process today. Personal experiences make referring business even easier!
