Overview
The Fundamentals of a Long-Term Care Event
Think of a long-term care event like a long-term pit stop for your health. It happens when someone, due to age, illness, or an accident, can no longer do everyday tasks on their own—like bathing, dressing, eating, or moving around independently.
The Cost Dilemma: Long-term care is extremely expensive, whether it involves hiring a home-health aide, moving into an assisted living facility, or residing in a nursing home. It creates a massive negative cash flow (money leaving your pocket) that regular health insurance usually does not cover.
The Impact on the Family (The Interdependency): An unmanaged LTC event doesn't just affect the person who is sick; it affects the entire family construct. Family members often end up stepping in to pay the bills out-of-pocket or giving up their own time and jobs to become caregivers.
The Risk to the Client's Asset Base: If you don't have a specific strategy to pay for care, you are forced to "self-fund". That means pulling money out of checking accounts, liquidating retirement funds, or even selling properties—which can burn through a lifetime of savings very quickly and destroy the inheritance or legacy intended for children or spouses.
Asset-Map's Tools for Long Term Care Conversations
The Visual Asset-Map & Policy Summary (Showing What Is—or Isn't—There)
The Asset-Map Report: Asset-Map lays out all family members, income sources, assets, and insurance policies on one single screen.
The Policy Summary: Under the insurance section, you can catalog any specific Long-Term Care policy or a Life Insurance Policy with an LTC Rider (a policy that lets you prepay death benefits early to cover health care costs).
The Power of Absence: If there is no box for LTC insurance, Asset-Map highlights that blank space. It begs the natural question: "Is it intentional that we don't have a plan for long-term care, or is this a missing piece of armor we forgot to put on?"
2. Signals (Running the Financial Fire Drill)
The Red Light-Yellow Light-Green Light Check: Asset-Map runs an automated calculation to test if a household could handle a major life calamity.
Spotting the Exposure: Under the Long-Term Care Signal, the map gives an instant visual indicator:
Green Light: The family has dedicated LTC insurance or enough accessible capital to handle an event without ruining their overall balance sheet.
Red Light: An LTC event would severely disrupt the family's lifestyle, drain their retirement money, or strain their adult children.
Read the definition of what the Signal is looking for.
Open the Signals Sidebar and click the focus icon (eye icon) to view what the Signal is considering on the map.
3. Target Maps (30-Second Speed Planning)
Testing the Scenarios: An advisor can run a quick Target Map specifically for an LTC event. Target-Map Preferences will initially provide high level calculations, depending on the advisor's inputs. Feel free to edit the Target-Map once it has been created.:
Step A: Input the expected care costs (e.g., $90,000/year for 3–4 years).
Step B: Apply available income or assets to see how far the current money goes.
Step C: Instantly see a progress bar showing if the plan is 80% funded, 50% funded, or facing a massive deficit.
Conversation about Exploring Solutions: You can model different options—like setting aside a specific pool of money, repositioning an underperforming asset, or securing a hybrid life/LTC policy—to turn that shortfall into a funded, secure plan.
Long Term Care Target-Map Details
The purpose of an individual's Long Term Care Target-Map is to illustrate the financial impact of a Long Term Care event on a person's finances.
"What you want" describes the costs of the event in today's dollars.
The Long Term Care default conversations, found in your Target-Map Preferences, supplies the starting point for the following funding requirements. We call funding requirements: "What you want".
Long-term Care Annual Expenses
Home Modification
Care Coordination
Caregiver Training
"What you have" displays funding sources (LTC policy assumed).
The Long Term Care Target-Map assumes any LTC policies designated as such on the Asset-Map will fund the event. The advisor can add funding sources such as assets manually by checking associated boxes on the What you have tab.
"What it means" compares costs with funding.
The comparison of the two results in a bar graph displaying the percent funded on a 100% scale, and the gap (if in deficit) that needs to be filled now in today's dollars. The Long Term Care Target-Map defaults to a 4 year event and displays what the monthly amount to fund is if in deficit.
Most Helpful Tips
The template assumes the event lasts for 4 years (Duration of Contributions field).
The Target-Map is produced with a default expected net return on investment. Feel free to change that to help your illustration, eg. change default 5% to 2% or 0%, if the applied assets used to fund the event have a different blended rate.
This Target-Map template uses hard-coded values that can be refined to suit the needs of the client.
Each requirement can be individually edited on the "What you want" page.
Don't settle for our default descriptions. Rename line item descriptions as desired by clicking either the Edit link or Description link.
Add more requirements using the Add Desired Cash Flow button on the "What you want" page.
Use the Start Age field only to define a one-time funding requirement at a certain age/date (leave the end age blank) on the "What you want" page.
Target-Maps recognize the financials relevant to the event and apply them to help fund the need. Additional funding may be applied by the advisor on the "What you have" page.
Insurance recognized by te Target-Map may need to be evaluated and adjusted for accuracy on the Asset-Map. Click the specific insurance tile on the Asset-Map and check the Essentials and Details tabs.
Double-check COLA, Start and End ages, and Loss to Tax values. Ensure they are aligned with the funding requirements and edit as needed.
New asset financials added to the Asset-Map will appear on a Target-Map's "What you have" page, but will not be applied to fund the need until the associated check box is checked.
By design, Target-Maps are independent from one another. Funding used by one Target-Map is not automatically removed from other Target-Maps.
If you use the default Target-Map duration of 4 years, please ensure the Long Term Care policy is set up to 4 years as well.
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