LTCI Partners

We are in the midst of Medicare Open Enrollment season, where those turning 65 and other Medicare eligible populations can shop for Medicare Supplement and Medicare Advantage Plans.  These plans can help cover a significant amount of care and reduce out-of-pocket costs. Yet most people forget to think about one of biggest holes in Medicare - coverage for long-term care costs.  Should the almost 4 million 65 years old's who are just entering the Medicare market also look at LTC Insurance?

Designing a LTC plan that will have appropriate benefits in 30 or 40 years can be really challenging! Despite that, many older LTC policies have actually done a pretty decent job of keeping up with the cost of long-term care.  How do I know?  Well, my Mom purchased a LTC Insurance policy from CNA Financial back in 1991.  The initial benefit was $100 per day with a 5% automatic inflation increase benefit.  Now, she is receiving care in a private room in an excellent nursing facility.  The facility charges $420 per day for care, less than the $454 benefit daily benefit of the policy.  The policy covers ALL the cost of her care.   

  The decision to purchase long-term care insurance can be a difficult one. The very nature of the product – helping protect a version of “you” who may need care 30 or 40 years in the future is hard to wrap our brains around. The vast majority of people seeking coverage on their own are those who have had personal experiences with a loved one needing and paying for care. So talking to clients about the need to consider this coverage while they’re in their 40s and 50s takes some understanding of why buying earlier is a smart move. Traditionally, there have been three reasons why “buy now” makes sense.

 

The majority of people that own long-term care insurance have consistently cited “Not being a burden on my family” as the #1 motivator for planning for their future LTC needs. Therefore, it’s no wonder that people who have experienced an extended care situation with a loved one are most likely to purchase an LTC solution for themselves. The most astute advisors identify those clients and engage them in an educational discussion about LTC planning. However, all too often advisors jump immediately to the product solution rather than make an effort to understand the client’s own LTC experience. By discussing the common, real-life consequences that family caregivers experience, you will engage your client in a more meaningful conversation that will heighten the client’s motivation to put a plan in place. The LTC sale is probably the least “transactional” sale in financial services… so use the following as a conversational template in discussing the true consequences of an unplanned LTC event. Family members often experience Seven Painful Consequences when trying to be the primary caregiver for a loved one. Those consequences are: • Emotional • Mental • Physical • Social • Interpersonal • Spiritual • Financial Even those that long-planned to be the primary caregiver for an aging loved-one have experienced at least one of these consequences: Emotional: As the reality of being a primary caregiver sets in, emotions can quickly consume you. These emotions stem from sadness, grief, anger, confusion, helplessness and more. That inner voice tells you that the life you once knew has been altered significantly going forward. Mental: After initial waves of emotion subside, they are replaced by mental stress that can lead to depression. Many details must be addressed and tough decisions must be made regarding the necessary requirements of your loved one/patient. Questions of who, what, where, when and how all run through your head simultaneously… and it takes a toll – especially if you have other personal and professional responsibilities to manage. Physical: Mental stress can be physically exhausting. Sleepless nights, fatigue, anxiety, and tension can wear you down. Caregiver responsibilities can challenge your own physical strength as you assist with bathing, dressing, feeding, toileting, ambulating and other activities. Interpersonal: A breakdown of family relationships can happen slowly or quickly depending on the changing needs of your loved one and the limitations, inabilities or resistance of family members providing care. Caregiving responsibilities are rarely shared equally among siblings or other family members. Additionally, female members of the family tend to bear the brunt of caregiving duties. Such inequalities can lead to frustration, anger, and family infighting. Sometimes the people who do the least are the most vocal when it comes to what you should be doing. Animosity can linger long after the extended care event has ended and can permanently damage relationships. Social: When caregiving responsibilities encompass your daily routine, the enjoyable elements of your life take a backseat. Your ability to participate in the social moments of life are challenged by the time needed to provide care. Additionally, the pressures of caregiving can create negative personality changes in people. Friends may have their own perceptions and make assumptions (rightly or wrongly) of how you may be feeling and if you want to be bothered. The social life of which you were accustomed can be negatively impacted. Spiritual: When someone you love becomes physically challenged or cognitively impaired, many caregivers assign blame, feel victimized or become permanently angry. “Why is this happening to Mom? I can't deal with this anymore.” The will to fight through the latest setback, find alternative care solutions and to remain positive can begin to erode. Sometimes your own personal religious beliefs are put to the test. “Why is God allowing this to continue?” Financial: The financial consequences of long-term care event often fuel the six other consequences above. The cost of LTC services can be the most expensive item someone ever pays for, possibly exceeding the purchase of a home or the cost of a four-year private college education. Unfortunately, many families don’t research care financing options until care is needed… and they are utterly shocked to discover that health insurance and Medicare for the most part do not cover LTC services. The reality is that an unplanned LTC event can have devastating effects on retirement plans and other financial obligations. By listening to your clients’ LTC experiences and talking about the Seven Painful Consequences above, you will solidify your rapport with your client and set the stage for explaining how these consequences can be mitigated with LTC insurance. And remember… the goal of LTC planning is not to cover 100% of your client’s future nursing home costs. The goal of LTC planning is to make what is often an unmanageable event into a manageable one for the whole family, including (and most importantly) the loved-one needing care.

Significant inflation - something that the majority of Americans have not seen in their lifetime - has been a primary news topic.  From concerns about exploding national debt and high government spending levels to an expanding post-pandemic economy, many people are concerned about sustained inflation and decreased purchasing power.  Or, as many economists are assuring us, this could be a short term event as the economy bounces back from the pandemic. Nobody knows! Of course long-term care costs are not immune from inflation,  including eye-popping increases in nursing home costs.  The good news is that LTC Insurance can effectively mitigate much of the inflation risk through inflation riders.  Read on for some strategies to guard against the future costs of inflation:

Have you heard of the Washington Cares Fund? If you haven't, it's the first state run and funded  Long-Term Services & Supports program. Originally signed in 2019 by Governor Jay Inslee, as of  January 1st, 2025, Washington State Residents who need long-term care may be able to claim benefits (based on needing help with 3 of 10 ADLs) from the state and receive a benefit of up to $100 per day up to a maximum benefit of $36,500. Undoubtedly  for many families these benefits are going to welcomed and helpful.  But, of course, someone has to pay for the program.

The recent stock market run (especially in tech stocks) has been amazing. Despite the high unemployment rate many investors are enjoying that feeling of increased net worth in both their qualified and non-qualified money. At the same time many may feel concerns about the market valuations, not to mention the recent craziness around retail investor trading.  Are we set for a repeat of big market corrections of 1999 or 2008?   Is it time to take some chips off the table and reallocate assets?  Americans have seen the impact the pandemic has had on long-term care facilities and want a flexible plan for care.  One great option may be a single premium long-term care insurance plan.

The last several years have seen major changes in LTC Insurance - leading to what can be referred to as LTC 2.0.  LTC 2.0 means that while the pure protection of traditional LTC insurance is still a popular option, there has been an accompanying growth in Hybrid LTC + Life plans - both in number of policies sold and number of carriers offering these plans.  However, the extended and record low interest rate environment may threaten some of the most popular provisions of these plans - including benefit guarantees.  How are carriers responding with new innovations?  This article will discuss that topic.

Recently I received an email from a Insurance Carrier who sells Linked Life/LTC plans with the headline "What happened to traditional LTC?".  The email started by saying "It wasn't so long age that traditional long-term care (LTC) insurance dominated the market, but now they are barely holding on while linked-benefit products are taking over."  Harsh! Of course, the credibility of any message is based on their motivation of the messenger and I'm sure that the carrier wouldn't mind if people thought there wasn't such a product option available anymore - (or for that matter other linked life/ltc carriers). But they are wrong about the future of Traditional LTC Insurance.