Log In
Americans overwhelmingly agree (96%) that planning for long-term care is important, but only 19% have actually started planning for it, according to research by VERSTA and Lincoln Financial Group.
Four in 10 adults (43%) say they are not confident that they will have the financial resources to pay for the care they might need as they age, according to a KFF survey, conducted as part of a broader reporting project by KFF Health News and The New York Times.
“As multiple surveys show, anyone advising clients on retirement planning should address long-term care,” said Chris McDonald, Vice President, Director of Sales, Annuities at Senior Market Sales® (SMS). “The need is so vast that those advisors and agents who fill it will grow their business. More importantly, they will impact client lives.”
Today’s LTC insurance products are more innovative and flexible, and for those reasons, more appealing to consumers, McDonald said.
“Starting the LTC discussion is easier because of these new solutions,” he said. “They remove many of the objections that clients bring up with traditional LTC insurance, especially the use-it-or-lose-it objection.”
Greater Awareness of LTC
Americans may be hearing — and worrying — more about long-term care for several reasons.
The rising number of Alzheimer's cases is increasing awareness of the need for better long-term care solutions, including more accessible and affordable services and support for both paid and unpaid caregivers. The COVID-19 pandemic exposed the challenges of the LTC system, especially poor staffing levels at the same time that the aging population is growing.
Recent state and federal efforts to address the LTC crisis have heightened awareness of LTC, or elder care.
Washington state created a mandatory payroll tax with an option for employees to opt out if they bought qualifying private LTC insurance. Additional states are currently working on their own solutions, incorporating lessons learned from Washington state’s experience into better ways to cover their residents.
The SECURE Act 2.0 signed into law Dec. 29, 2022, permits retirement plans to distribute up to $2,500 a year for the payment of premiums for certain specified LTC insurance contracts.
But whether these efforts will be effective remains unseen. For example, some industry experts say the measures in the SECURE 2.0 legislation do not go far enough to incentivize Americans to plan for LTC.
McDonald said the insurance industry is constantly evolving to address the LTC market’s past troubles — namely, mispricing and high payouts that ultimately made traditional LTC products too expensive for many people.
"New products that link LTC coverage with life insurance and annuities are resonating with more consumers, and we expect more product innovations to come,” he said.
Hybrid LTC Insurance Gaining Popularity
With standalone LTC policies, a policyholder might pay into it for years but never use it. Buyers of hybrid products, however, get either a death benefit (with a hybrid LTC-life product) or lifetime income (with a hybrid LTC-annuity product) as well as some long-term care benefits if needed.
By giving consumers these options, carriers have seen hybrid products' sales soar in recent years. The American Association for Long-Term Care Insurance (AALTCI) reports that hybrid LTC policies have overtaken traditional LTC insurance policies in terms of annual sales.
What’s the Future of LTC Insurance?
LIMRA research suggests that those in the sandwich generation — specifically Millennials — who are caring for aging parents and younger children are very open to combination products. This indicates that while standalone products typically attracted an older customer, combination products might expand the market to younger adults, which potentially could make coverage more affordable.
Insurance and retirement planning professionals should expect more opportunities in the LTC market, McDonald and other industry officials said.
The National Association of Insurance and Financial Advisors (NAIFA) is advocating for public/private partnerships to fund long-term care needs.
Speaking to webinar attendees in November 2022, Carroll Golden, Executive Director of the NAIFA Limited and Extended Care Planning Center, said that neither the public nor the private sector is fully equipped to handle the LTC crisis alone.
But even with no solution in the immediate future, “it’s more imperative than ever to include long-term care in the client conversation,” Golden said.
Having the Long-Term Care Discussion
Whether you need ideas to start the LTC discussion with a specific client or want LTC marketing materials to reach prospects, you can find help at SMS. As leaders in the retirement planning and insurance space, SMS has a long history of providing all types of planning professionals with LTC resources and support, from educational articles for agents to consumer-facing education pieces.
When you work with SMS, you don’t have to be an LTC insurance expert — you get access to a team of LTC insurance experts who work behind the scenes to find the best solutions for your clients.
Don’t sell LTC insurance? SMS can help you get contracted and certified, learn the basics, help with your first case and any cases in which you need help.
To speak with an LTC marketing consultant, call 1.888.456.8884, option 4.
Key points:
- Efforts to address the long-term care crisis are gaining traction, and the public is increasingly aware of the need for LTC planning.
- Having the long-term care discussion with clients can address one of their biggest worries in retirement.
- Get the resources you need at SMS, including LTC insurance expert advice.
Share this blog post:
