Can you summarize this article? Provide any thoughts as wells of what you think.

David M.Cordell, Ph.D,CFA,CFPP, CLU,is director of long-term care available to its employees. als typically have invested assets that can finance programs at the University of Texas at Dallas in As the popularity of long-term care insur. be used to generate income that can pay Richardson, Texas ance has increased, some conventional wisdom has been developed about individual for those expenses when needed. But in order to self-finance the long-term care costs, high net worth individuals must hold onto those assets. Self insurance, therefore, Thomas P.Langdon, L.D, LLM., CFPP, is associatepre fessor of business law at Roger Williams University in Bristol, Rhode island. coverage needs. Some of these conventions are useful in developing a comprehe financial plan, and some may be misguided nsive its the ability of a high net worth mple, many individuals or exa and planners believe that long- term care is primarily for middle ost financial planners agree that long-term care insurance is income (modest net worth) indi- an essential component of any viduals who would like to ensure When 66m well-conceived risk management plan, an inheritance for their children. comprehensive financial plannin While increased life expectancies over the Under this line of thinking, low g last century have allowed many individuals net worth individuals do not need for a client, we offer the alternative to enjoy longer retirements, a consequence to buy long-term care insurance of increasing longevity is the greater needctracts because they do not for more medical services, particularly at have significant assets to protectis not only needed for high the end of life. Long-term care insurance and, if they need services, the covers the risk that individuals may need rnment will pick up the tab medical and custodial care, either at home through the Medicaid system. or in a skilled nursing facility, at some point in their life. view that long-term care insurance gov net worth individuals, it is a necessary component of their Likewise, the argument goes, high long-term care insurance because they can afford to self-insure if the need for home care or skilled nursing care arises. When considering com Do High Net Worth Clients Really Need Long-Term Care Insurance? individual to transfer assets before death in Due in part to the dramatic increases in life prehensive financial planning for a client, an effort to minimize transfer taxes for the expectancy over the past 20 years or so, public awareness and use of long-term care care insurance is not only needed for high For a high net worth client, it is helpful insurance have risen significantly in the last net worth individuals, it is a necessary com to consider how a long-term care contract 15 years. Most long-term care insurance is pnent of their financial plan. sold in the private market, although the group Many larger companies offer group long.term care insurance as an option outside of theirIt is true that high net worth individuals worth individual could buy the long-term cafeteria plan, and the largest employer-the may be able to self finance long-term care care insurance contract to hedge against federal government-has made group costs if necessary. High net worth individu the risk of funding home-care or skilled- we offer the alternative view that long-term family. is similar to an option contract. Options are often used by investors to hedge their portfolios against adverse market move- ments. Instead of self-insuring, a high net market has also shown some advances. nsurance as an Option Contract