By Lily Vittayarukskul, CEO of Waterlily.
One of the most complex and emotionally charged areas for financial advisory services is long-term care. The daunting set of challenges are increasingly in need of being addressed by professionals as the aging population grows and care costs continue to escalate. Traditional planning tools often rely on broad averages and generic simulations such as Monte Carlo that fail to capture the nuances of an individual’s future care needs nor the effectiveness to motivate families to plan for LTC. However, this difficult landscape is beginning to transform. Advance in artificial intelligence (AI) is offering more personalized, precise and proactive approaches to LTC planning.
Long-Term Care Planning’s Complexity:
Over many years, the methods used in LTC planning have failed to reflect the intricacies around each individual family’s situation. The following conventional tools can lead to several recurring issues due to their use of national averages and basic models:
- Delayed Engagement: The development of a thoughtful strategy is often not put into action early on, or there is little time to create one, since many clients postpone LTC discussions until a crisis occurs.
- Impersonal Data: Generic statistics and broad-based simulations do little to illustrate the true financial impact of LTC on an individual family.
- Lost Opportunities: Without a tailored planning tool, advisors often struggle to convert early LTC discussions into concrete strategies. The result is objectives such as guiding a family towards structuring a comprehensive financial plan or securing an appropriate insurance policy often don’t come to fruition in a timely manner.
LTC remains one of the few unsolved wildcard scenarios in retirement planning due to these highlighted challenges. Its unpredictable nature forces both advisors and clients to contend with significant uncertainty. Yet, it is precisely this uncertainty that offers a last mile opportunity for advisors to differentiate themselves by providing uniquely tailored, high-value solutions.
The AI Advantage in LTC Planning
These long-standing challenges are now being addressed as AI is emerging as a game-changer in LTC Planning. Unlike traditional methods, AI-driven platforms can analyze a vast array of data, from regional cost variations and healthcare inflation to individual health status and family dynamics, to generate a personalized projection of a client’s LTC journey. Waterlily is a first-mover leveraging AI to personalize LTC planning, starting with an innovative, three‑minute intake process to transform LTC planning into an engaging, individualized experience.
The platform creates a tailored set of predictions to tell an insightful story of a client’s future LTC needs. This narrative is developed through a streamlined intake process that results in detailed projections on the timing and duration of care, anticipated costs, and even the care hours that will be taken on by family caregivers. Such personalized insights allow advisors to move beyond vague “what if” scenarios, initiating rich conversations that address the specific realities of each client’s situation.
Enhancing Advisor-Client Interactions
The precision of AI-generated projections fundamentally changes how advisors engage with clients on the topic of long-term care. With clear, individualized data at hand, advisors are better positioned to:
- Initiate Rich Conversations: Advisors can discuss specific care projections tailored to the client’s circumstances instead of relying on broad averages. This not only demystifies the planning process but also helps clients understand the real implications of their choices.
- Accelerate Decision‑Making: When clients are presented with a clear, actionable plan that outlines expected timelines and costs, they are more likely to take proactive steps. This clarity shortens the time from initial inquiry to concrete decisions, such as purchasing an appropriate policy or annuity.
- Unlock Premium Growth: Personalized planning helps overcome the emotional barriers that often hinder LTC discussions. By converting these conversations into high‑value, concrete action plans, advisors can capture opportunities that might otherwise be lost.
These capabilities tackle key challenges in traditional LTC planning by promoting early client engagement and fostering stronger, data-driven advisor relationships. Further, LTC planning isn’t just about traditional LTC insurance. Innovative options like life with rider policies, hybrid solutions, annuities, and even short-term care are energizing the market and offering clients potentially more competitive choices than ever before. AI makes it easier to build a holistic strategy that educates, motivates, and covers every aspect of a client’s long-term care needs and wants when it is used effectively.
Balancing Technology with the Human Touch
While AI is undeniably powerful, its greatest strength lies in complementing, not replacing, the human expertise that financial advisors bring to the table. The nuanced and emotionally charged nature of LTC planning demands empathy, active listening, and the ability to navigate complex family dynamics. AI provides the detailed, data-driven insights that can inform these discussions, but it is the advisor who translates this information into a personalized plan that aligns with the client’s overall financial goals and emotional needs.
In this evolving landscape, the role of the advisor remains as crucial as ever. By integrating AI-driven insights into their practice, advisors can offer a more holistic service that not only anticipates future expenses but also supports clients through one of the most challenging aspects of retirement planning.
Looking Ahead: The Future of LTC Planning for CPAs
As tax practices pivot toward higher-value advisory work, AI-powered LTC planning is quickly becoming an essential add-on. Waterlily lets firms deliver a high-margin, specialist-level service in about 30 minutes, producing client-specific care cost projections that reach far beyond the national averages many advisors still lean on. By pairing those projections with tax-efficient funding strategies, CPAs can both safeguard clients’ retirement dollars and set themselves apart, while attracting referrals from wealth advisors who prefer to stay clear of complex tax planning.
Is adopting AI solely about staying on the cutting edge of technology, or can it fundamentally enhance the quality of advice delivered to clients?
At least for our rapidly aging society on the cusp of navigating long term care with limited funds and family support, the potential impact of AI is significant. With more accurate projections and a personalized approach, advisors can help families navigate the uncertainties of aging with confidence. The CPA community is poised to turn one of the most challenging aspects of financial planning into a proactive, engaging, and ultimately more secure experience for everyone involved by combining technological innovation with the irreplaceable human touch,
In a field where the stakes are incredibly high, leveraging AI to craft clear, personalized LTC plans can be transformative. Advisors have the opportunity to remain enduring pillars in the financial and insurance services landscape by ensuring that families are not only financially secure but also emotionally supported as they navigate the future.
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Lily Vittayarukskul, Waterlily’s CEO and Co-Founder, started college at 14, and by 16, she was venturing into a career in aerospace engineering as an intern at NASA. However, that same year, her life took a dramatic turn when her Aunt, who raised her and was a cornerstone in her first-generation immigrant family, was diagnosed with terminal stage colon cancer. The ensuing financial and emotional devastation, exacerbated by their family’s lack of preparedness, tore permanent rifts in her family, and compelled her to pivot her career from aerospace to a lifelong dedication to building solutions in healthcare.
Fueled by personal tragedy and a resolve to forge change, Lily graduated from UC Berkeley with a bachelor’s degree in Genetics and Data Science and led product and engineering at multiple startups before founding Waterlily.
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Tags: Financial Planning, Payroll, retirement
