How Estate Planning and Healthcare Planning Go Hand in Hand

Christine Simone
February 7, 2024

Comprehensive financial planners often use the second half of Q3 to dedicate time to estate and insurance planning. In the context oft financial planning, insurance planning usually means life insurance. But, truly comprehensive financial advisors include other forms of insurance, like health insurance, too.

Financial advisors are well-equipped to help clients with all the important decisions in their lives, and clients know this. In fact, they expect it. 93% of those surveyed expected their advisor to help with estate planning, but only 22% received that service. 94% expect to receive trust services, but only 10% do. Additionally, 40% of respondents reported they're looking for insurance advice as a product/service beyond core investment management, and one study found that clients of financial advisors have a 64% gap between expected and received health insurance advisory services.

Life Events

So how do estate planning and healthcare planning go hand-in-hand? They’re impacted by many of the same life events. For example, if your client gets divorced, they need to revisit their estate plan and their health insurance. If their former spouse was listed as their main beneficiary, granted power of attorney rights, or healthcare proxy, they may want to change that depending on the circumstances of the divorce. Similarly, if your client is employed and was on their spouse’s employer-sponsored health insurance plan and they become divorced, they’ll need to decide how to move forward with their health insurance. They might qualify to enroll in their own employer’s health insurance, but they’ll need to reach out to their HR department and let them know about their situation to see if they qualify for a Special Enrollment Period. Otherwise, they’ll need to wait until their employer’s annual open enrollment period. If your client doesn’t have access to employer-sponsored health insurance and isn’t yet 65, they have even more options to consider when it comes to healthcare coverage.

Other life events that impact estate plans and health insurance are medical diagnoses, getting married, having a child, death of a spouse, loss of income, a change in residence, and more.

As a comprehensive financial advisor, you can address these life events as they happen if they’re urgent, or you can use August and September to meet with clients and review their estate and insurance plans along with life events that have happened in the last year. (Note: a lot of these life events have sensitive timelines to make adjustments to your health insurance, so don’t wait too long before exploring the topic with clients!). Making adjustments to clients’ estate plans and healthcare plans at the same time can actually make it easier to keep everything organized and simplified.

Final Thoughts

32% of high net-worth clients leave their financial advisor because the advisor didn’t discuss their entire financial situation, and 60% of clients left because they felt their needs weren’t being listened to. Based on the data in this blog, the “full financial situation” and “needs” clients want their advisors to listen to go beyond basic financial planning. They want help with estate planning, healthcare planning, and much more. After all, healthcare costs are the third highest area of spending in retirement, and retirement is when clients need to consider creating an estate plan if they haven’t yet.

At the end of the day, if you want to be a truly comprehensive financial planner, incorporating estate planning and healthcare planning is a must.

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