The long-term care insurance (LTCi) market has experienced a year of change. Carriers have pulled out of the market; the ones that remain are revising the traditional coverage to a more flexible plan after finding the cost of care to be too steep. Meanwhile, benefits are being revised and premiums have increased.
LTCi is not an easy sell. It can be expensive and difficult to qualify for, and it can be a hard conversation to have with clients who aren’t ready to consider that they could eventually need LTC.
Despite these hurdles, LTC insurance has never been more important. It can help save your clients’ retirement. It can help save families a lot of stress and hardship. That is what is important. We don’t look at these changes as a reason to stop talking to your clients about LTC. We look at them as the reason you should help them explore all their options when it comes to funding their long-term care risk. It’s up to you, the agent, to help them find the plan that is right for their family and their budget.
This blog series will explore the different options available to your clients, including traditional LTCi, linked benefit products, short-term care and stand-alone home health care. Each blog will lay out details about each option so you are armed with the knowledge of when to use which one.
The long-term care insurance (system, market, structure) has evolved in recent years and now carriers are offering linked-benefit policies, also referred to as “hybrids.” These products have several design variations. Genworth’s Total Living Coverage (TLC), for example, links a long-term care rider with a universal life policy.
To varying degrees, these products essentially allow the consumer to get double duty from their retirement dollars, using them to build cash value tax-deferred and, if needed, fund their long-term care need. Typically, hybrids are priced cheaper than stand-alone products, though the LTCi benefits are not as comprehensive.
Meet Helen.* Helen is in good health, has been married for 30 years and she and her husband have two children. After 25 years as a plastic surgeon, she retired last year with over $300,000 of available assets. With the coverage and protection of TLC, she is better prepared to confront any of these four situations. Helen purchased a TLC policy at age 60 and was able to leverage her $100,000 initial premium almost 6 times for a total of $378,000 in total long-term care benefits and a $126,048 Initial Specified Amount. Helen has up to $5,252 each month to pay for covered LTC expenses for 6 years (longer, if the monthly maximum is not used every month).
What if Helen never had a long-term care event? Because Helen did not need LTC benefits, she was able to leave a $126,048 tax-free death benefit to her husband as her beneficiary.
*This is a hypothetical example
Look for clients who:
*Information from Genworth
If your client:
Again, the stand-alone LTCi policy may be the best solution for protecting your clients, but hybrid products are the next-best solution in terms of benefits and may answer many of the objections your clients have.
For more information on LTCi and hybrid products call a marketing consultant
LTCi Department 1-888-456-8884 (option 4)
Annuities Department 1-877-645-4939
Life Department 1-877-888-0166