The long-term care problem
According to HHS approximately 70% of people turning 65 will needs some form of LTC before death
This is a staggering reality. The other staggering fact is that LTC services are very expensive and due to the aging of our country they will only get more expensive. According to longtermcare.gov the national average for LTC services is $225/day for a semi-private room in a nursing home. Keep in mind this is a national average. Costs in large metropolitan areas can reach $300+ per day.
Medicare does not cover long-term custodial care in any meaningful way
Disability insurance does not cover long term care.
Navigating the LTC world and solutions can be very overwhelming for prospects and brokers. With over 15 years experience in the LTC arena, The General Agents for Agents, Inc can help you by providing information or even meeting and speaking with your clients.
Long-term care solutions
Planning for Long term care is not easy
What is the best way to manage the LTC risk?
To answer this question lets start with the worst way to mange this risk- Ignore it
Even if a prospect does not want to buy any type of insurance for this risk, they still must absolutely plan for it or face a financial, and maybe even worse, emotional disaster.
Non-insurance solutions
Everyone should, at least, consult with a qualified Elder Care Attorney before they need LTC services.
There are many more options when planning before LTC services are needed. Tools such as trusts and asset reallocation can be a huge help in managing this risk. Even if a prospect never buys any LTC insurance from you, you will be considered a trusted advisor for introducing them to a qualified attorney. If you need a great referral, we have several that are fantastic.
Insurance Solutions
- Traditional LTC insurance pays a daily or monthly dollar amount according to what the client purchases
- Clients may purchase any amount they like, allowing them to insure the entire risk or any part of it.
- Policies all have a waiting period for benefits. Typically a 90 day wait is common.
- Policies can be purchased with or without an inflation rider. This option needs to be carefully reviewed with prospects.
- Other rider options can be very useful and also confusing. Work with your account manager to fully understand the options
- Traditional LTC policies do not offer lifetime guaranteed premiums. Carriers may increase premiums in the future even after a policy is purchased.
- Traditional LTC polices can offer significant tax credits and tax free benefits
- Polices may be purchased by corporations on very a favorable basis.
- Linked Benefits LTC insurance is a policy that combines life insurance and LTC insurance together
- Many linked benefit policies offer return of premium, death benefits and guaranteed premiums
- Many linked benefit policies offer indemnity payment of LTC proceeds
- Flexible premium payment options from single pay to full policy term
- Great way to leverage idle funds into LTC dollars
- Great way to avoid the "use it or lose it" objection.