Gary Bleetstein
Senior Vice President

November is Long Term Care Insurance Awareness Month and ASG would like to remind you how important LTC planning is for you and your clients.

66% of Americans say most people need long-term care insurance, according to the 2020 Insurance Barometer Study that Life Happens and LIMRA conducted. However—and here’s the catch—only 18% say they own it. This gap suggests an active market demand from over 100 million consumers.

Here is some really good and important information from Life Happens – one of our industry associations who advocate with a passion for education.

Why is long-term care insurance worth it? 

  • First, it’s worth reviewing a long-term insurance definition.
  • Long-term care insurance is coverage that pays for care either in your home or in a specialized facility should you develop a health condition that requires partial or full-time care.
  • Long-term care insurance is an increasingly important consideration for an aging population that is living longer than ever. The U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹

And that care doesn’t come cheap: Long-term care costs range from $19,500 per year for adult day care to $102,200 per year for a private room in a nursing home.²

These statistics underscore the reasons why long-term care insurance is worth it. They include the following:

  • It protects your assets.Many people falsely believe that public health programs like Medicare or Medicaid will cover their long-term care expenses. In reality, Medicare caps payments for skilled care at 100 days, and it only pays if certain requirements are met. Meanwhile, Medicaid only kicks in after you spend down your own assets. Private health insurance cannot be relied on either, since it only pays for doctor and hospital bills. If you planned on relying on these options, you would have to spend most of your own money to pay for care. That would deplete your hard-earned savings and make it impossible to leave money to family members or a favorite charity when you pass away.
  • It takes pressure off your family.It’s also not a great idea to assume that a family member would step up to provide care. Becoming a caregiver is physically, emotionally and often financially burdensome. Many people are not able or willing to make such a huge sacrifice. This is especially true when the caregiver is a spouse or partner also facing their own aging health issues.
  • It gives you care options.Long-term care insurance gives you flexible options when it comes to deciding where to receive care. You almost never get a say when you rely on a public health program like Medicaid to cover your long-term care expenses. Many facilities don’t accept Medicaid, so your only option may be a no-frills nursing home with shared rooms rather than a more amenity-oriented private nursing home where you’d get your own room. What’s more, Medicaid doesn’t pay for all (or even any) assisted living costs in many states. Relying on care from a family member likewise limits the say you have in the care you receive.
  • It may come with life insurance protection.Today, many long-term care insurance policies are hybrid policies that bundle long-term care coverage with life insurance coverage (or an annuity). Hybrid life and long-term care policies offer your loved ones protection in the event you pass away, while also giving you the assurance of knowing that your long-term care needs are covered. Plus, a hybrid life and long-term care policy can save you the time and expense of buying two separate policies.
  • It puts you in control and gives you peace of mind.With long-term care insurance coverage, you never have to wonder what would happen if you needed long-term care and how that care would be paid for. And because long-term care insurance can be bundled with life insurance, your family has the extra benefit of knowing they’re protected if you were to pass away. For many people, this peace of mind is the top reason for buying a long-term care insurance coverage.

¹ U.S. Department of Health and Human Services
² Genworth’s Cost of Care Survey

 

There are many options for long-term care insurance.  

When it came to long-term care insurance options in the past, the only offering was a standalone policy. These policies offered coverage only for long-term care coverage in either your home or in a specialized facility.

Now-there are several ways to purchase Long Term Care- one way that Agent Support Group can assist you is by using the Linked Benefit / Hybrid LTC with Life Insurance –

Today, you can buy a policy that bundles long-term care coverage with life insurance coverage (or an annuity). This means you get two important coverages in one policy: life insurance, which offers your loved ones financial support if you were to pass away, and long-term care coverage, which covers you if a chronic illness or disability means you’d need long-term care.

These policies go by several names such as hybrid, combo or linked-benefit products. No matter their name, there are several important benefits to having both life insurance and long-term care insurance in one policy. They include:

  • Benefitting from more complete coverage.Life insurance may be a priority for you and your family right now while the need to pay for long-term care may become a higher priority in the years ahead. A hybrid policy serves two very important coverage needs in one policy.
  • Having flexible payment options.You can pay for a hybrid policy with either a lump sum or through an annual stream of premiums.
  • Having the option to lock in your premium.Unlike traditional standalone long-term care insurance policies, many hybrid policies give you the option of locking in your premium. This means you pay a consistent premium the entire time you own the policy and don’t need to worry about price increases.
  • Enjoying a better return on your premium dollars.There is no “use it or lose it” aspect to hybrid policies. That’s because the life insurance portion of a hybrid policy offers a death benefit and/or an annuity payment, ensuring that all those premium dollars you paid will return to your family if you never need long-term care. (Just know that tapping the long-term care portion of the policy will reduce the death benefit on the life insurance side of the policy.)
  • Being easier to obtain.Medical underwriting for hybrid policies is often less involved than it is with traditional standalone long-term care policies.
  • Benefitting from tax savings.Life insurance benefits are almost always paid out tax free while premiums paid for long-term care insurance can sometimes be deducted from your state and federal taxes.

So let’s all use this as a reminder that November is Long Term Care Insurance Awareness Month and Agent Support Group is here to support you and your clients in these trying times with new and innovative sales and underwriting solutions.

 

Gary Bleetstein

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