Patrick Astre likes to crunch the numbers on long-term careinsurance for his clients once they hit their 50s. While doing so for one of his clients, a manufacturing sector entrepreneur with a net worth of approximately $11 million, Astre pointed out that the client and his wife could face a bill of as much as $3 million if they both happened to need long-term care because of serious health issues. Perhaps a long-term care policy would help, Astre suggested.

No, thanks, the client replied. The business owner didn't see the value of such a policy, because if he died with even half of this estate intact, that would be enough, he reasoned.

"I had been managing his investments for nearly 20 years, and I thought it was a good idea for him to have it," says Astre, an independent financial planner and founder of Astre Planning Inc., a Shoreham, New York financial planning firm.

To be sure, not all clients feel the same way. Another of Astre's long-term clients, a brick-layer by trade who had built up a $6 million net worth by buying and renovating residential properties, thought it was a great idea. Even though the client was in his mid-60s, Astre says that preserving his estate was important enough for him to spend several thousand dollars per year on a long-term care insurance premium to ensure that his grandchildren and some of his favorite charities benefited from his estate after he was gone.

Discussing the issues surrounding what clients are going to do when they can no longer take care of themselves isn't exactly the most pleasant exchange, but it's an increasingly necessary one. That's where long-term care insurance comes in.

These policies provide varying benefits when the policy owner needs daily assistance with the essentials of everyday life; preserving the individual's estate from the crushing expense of full-time or ongoing care.

The conventional wisdom used to be that high-net-worth clients were too wealthy for long-term care insurance. But some advisors are challenging that notion, for various reasons.

One is simply the fact that even high-net-worth clients can have trouble with the sky-high cost of medical care in their twilight years. Indeed, healthcare bills in the high five or even six-figure range can quickly drain even brimming pools of wealth.

Another pressing consideration for those high-net-worth clients is less a matter of survival and more of wealth preservation. "I think that one of the first questions they need to ask is whether it's important to pass along as much of the estate as possible to their heirs," says Julie Murphy Casserly, president of JMC Wealth Management in Chicago. "Long-term care insurance can have a significant impact on a person's net worth."

Kenneth Shapiro, a New York-based wealth management advisor with Merrill Lynch's Global Private Client Group, says that many clients who could cover any anticipated cost of care on their own, choose to purchase a long-term care policy to transfer some of that risk to an insurance company. "Even in cases where a client is wealthy enough to self-insure, long-term care insurance makes sense because it allows the client to offset at least part of the risk of that cost for a fairly modest premium," he says.

After four years of decline, individual long-term care insurance sales are rising, according to LIMRA, a Windsor, Conn.-based research and consulting firm of more than 850 financial services companies worldwide. In 2007, sales of these policies were up 3% while employer-sponsored long-term care insurance plans grew by 16%.

The Longevity Factor

Clearly, increased life expectancy is driving up demand for these policies. According to the Center for Disease Control, Americans born in 2004 can expect to live nearly 2.5 years longer than those who were born in 1990. The U.S. Census Bureau expects the U.S. population aged 65 and over to double in size within the next 25 years. By 2030, almost 20% of Americans—approximately 72 million people—will be 65 years of age or older. The age group 85 and older is now the fastest growing segment of the U.S. population.

But, with increased longevity comes increased chronic illness and disability. Last year, Dr. Richard J. Hodes, director of the National Institute on Aging, testified before the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies about this. He said that more than half of all Americans over age 65 show evidence of osteoarthritis in at least one joint; and more than half of Americans older than 50 have osteoporosis or low bone mass; and "cardiovascular disease, cancer and diabetes remain common among older Americans."