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Oct 31, 2023 • Tom Riekse Jr

Don't be afraid of too many LTC Insurance Choices!

Drug store aisle


I don't know about you, but it's definitely not enjoyable when you catch a cold and have to navigate the overwhelming cough and cold aisle at a drug store. So many choices to make - liquids, capsules, tablets, liquid gels? Brand name or generic? Daytime or nighttime? Homeopathic or not? And what about quantity? Do I already have some at home and how old is it? Ugh, it's frustrating!

But here's a simple solution - just walk up to the pharmacist and ask them for advice on what to take for a cold. Chances are, they'll have some recommendations for you.

Now, imagine this confusion and uncertainty when it comes to buying long-term care (LTC) insurance. The impact of making the wrong choice, or worse, not making a choice at all, can have far greater consequences than a cold for someone in need of care and their loved ones.

With an aging population, rising care costs, and financial strain on government programs, the awareness of the need to plan for long-term care is higher than ever. The advisor or financial professional should discuss the expensive nature of long-term care and the importance of incorporating it into financial planning. Instead of relying on self-funding as the default option, it's crucial to explore the various options available to cover LTC costs.

The good news, (and also the challenging news), is that there are numerous insurance products with medical underwriting that can help cover these costs. Currently, there are eight(!) different forms of these solutions available:

  1. - Traditional Long-Term Care Insurance
  2. - Short Term Care Plans (STC)
  3. - Hybrid Life Insurance with LTC Insurance
  4. - Hybrid Annuities with LTC Insurance
  5. - Medically underwritten Immediate Annuities
  6. - LTC Rider on Permanent Life Insurance products
  7. - Life Insurance with a Chronic Illness Rider (upfront charge)
  8. - Life Insurance with a Chronic Illness Rider (charge/benefit determined at time of claim)

It's quite overwhelming to sort through all of these options. Therefore, it's recommended to group the decision-making process for LTC insurance into three primary areas:

1) health underwriting considerations

2) long-term care insurance product features

3) funding strategies.

Each of these areas can help narrow down the types of plans that should be focused on.

Let's begin by exploring the first area of consideration - health underwriting.

What all these options have in common is the requirement for medical underwriting. Unless you're part of a company that offers long-term care insurance with guaranteed issue during an enrollment period, assessing the prospect or client's health should be the initial step in any planning process. The good news is that it's now easier than ever with the availability of online health screening tools.

Once preliminary health information is gathered, certain types of LTC policies are likely to be the best fit based on that information. This doesn't mean that other solutions listed above won't work for a particular person, but it does help narrow down the choices.


Consideration Best Product Options
Currently receiving care Immediate Care Annuity - underwritten
Older Aged

Hybrid Annuity/LTC Plans

Cognitive Issues Immediate Care Annuity, Hybrid Annuity/LTC Plans
Young and healthy Traditional LTC Plans, Hybrid Life/LTC plans, Life with Acceleration Riders
Chronic and more severe health issues Short Term Care Plans, Guaranteed Issue Group Life/LTC offerings, Hybrid Annuity/LTC plans
Simple/Fast application process Hybrid Life/LTC plans, Guaranteed Issued Group Life/LTC offerings


Second Consideration - Product Features and Benefits

Once underwriting has narrowed the choice, the next area to consider is Long-Term Care product features.  Marketplace competition has led to many product features, but asking about ones that clients might be interested in makes sense.   Here are some product features and the types of products that might be most appropriate:

Product Feature Best Product Options
Automatic Inflation Protection Traditional LTC Plans, Hybrid Life/LTC plans
Cash LTC Benefits Hybrid Life/LTC plans, Life with LTC Acceleration Riders, Life with Chronic Care Riders
Unlimited/Lifetime Benefits Traditional LTC plans, Hybrid Life/LTC plans
Coverage for couples Traditional LTC plans, Hybrid Life/LTC plans, Hybrid Annuity/LTC plans
Benefits tied to market/investment returns Hybrid Life/LTC plans, Life with Acceleration Riders, Hybrid Annuity/LTC plans 


Finally - Funding the plan

Finally, consideration has to be made on how to fund the LTC plan.  Just as the default of self-funding a LTC plan can be subject to liquidity and market timing issues, a long-term care plan can be impacted greatly by how premiums are paid. This is where financial advisors and financial security professionals can really help the prospect with some creative ideas.  Here are some areas of paying for coverage and which products might be a better fit:

Funding Preferences/Options Best Product Options
Affordable Annual Premiums Short Term Care, Traditional LTC, Hybrid Life/LTC, Guaranteed Issue Group Life/LTC plans
Single Premium - repositioning assets Hybrid Life/LTC, Hybrid Annuity/LTC, Immediate Care Annuity Plan
Small Business Owner deducting premium Traditional LTC, Hybrid Life/LTC plans
1035 Exchanges Hybrid Life/LTC, Life with LTC Acceleration, Hybrid Annuity/LTC plans
Funding with Qualified Money Hybrid Life/LTC through annuity funding


Once you've explored underwriting, product features, and funding it should be clear which type of product will be most appropriate.  The next step is to look at the possible carriers and filter them based on buyer preferences - for example, "Hybrid Life/LTC carriers that offer unlimited benefits with annual premiums".

The next step is to summarize the planning preferences to show that a best-interest effort has been made.  Finally, a recommendation can be made - or narrowing down the decision for the client to at most two recommended solutions.

Help on the process - from people and technology

For those advisor and financial security professionals who don't work daily on long-term care planning, outside help is a must. That could be in the form of carrier wholesalers or brokerage general agencies who specialize in LTC planning.  They can help with narrowing down the choices and even help with point of sale presentations - which today are primary done through video conference.

In addition, insurance technology vendors (like Ensight) are working hard on creating comparison software and illustrations tools that allow for interactive comparisons so that variables like premiums or LTC benefits can be tweaked. Carriers and vendors are also creating companions to illustrations that are more focused on stories.

AI will help as well

The hype of AI may be overblown - but make no mistake it will impact planning greatly.  No, it won't replace humans for a while but as AI is integrated into the process it will make things more efficient.

Bringing it back to the shopping for cold medication above, if the pharmacist isn't around or to verify their recommendations AI can be helpful.  A quick ask of AI chat about "what is a good medicine to take for a cold" gives a list of some options - which can be one way to narrow options.

Surprisingly, many of the ChatAI tools do know a lot about LTC Insurance - but often their advice is suspect or just simply wrong.  As AI learns it should be better, but in all cases their "advice" needs to be scrutinized and double-checked.

Conclusion - don't let the choices overwhelm you and don't let perfect be the enemy of good enough.

We don't know what the future will bring and no LTC plan can be iron clad.  The key is to put a plan in place and then monitor on a periodic basis.  With help, everyone can make a plan for care.


Tom Riekse Jr

Written by Tom Riekse Jr

Tom Riekse, ChFC, CLU, CEBS is the Managing Director of LTCI Partners, one of the largest national distributors focused on long term-care planning. LTCI Partners works with financial advisors, benefit brokers, associations and anyone else interested in helping protect people against the devastating financial impact of a long-term care event.
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