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.
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 post will lay out details about each option so you are armed with the knowledge of when to use which one.
Well, as the name implies — it is short. Benefit periods can be 100, 200 or 360 days. Short-term care needs most often arise after an accident, illness or injury where the client is treated initially in the hospital and needs additional care in his or her home, a nursing facility, assisted living facility or hospice facility. In order for clients to qualify for short-term care, they need to not be able to perform 2 of these 6 activities of daily living (ADLs):
Jane is a healthy 43-year-old who has saved $10,000 to use as a down payment on her dream home. Jane loves hiking and is always looking for more challenging trails to conquer. One day, while hiking a new trail, she loses her footing and falls several yards down a gorge. Her entire left side is severely injured, but with physical therapy, her doctors expect her to fully recover within six months. Jane is quickly discharged from the hospital and is now at home and needs help dressing, bathing, getting around the house, and getting to and from physical therapy while her husband is at work.
Jane opts to hire a home health aide 10 hours a day, 5 days a week, at an expense of approximately $21 an hour, or $1,050 a week. This quickly adds up to over $25,000 during her six-month recovery period. Fast forward to Jane’s recovery, she now has no savings to put toward her dream home and owes more than $15,000 in recovery costs. For around $45 a month, a short-term care policy would have covered the majority of her recovery expenses.1
Michael is a 73-year-old suffering from chronic back pain, and his doctor is recommending disc replacement surgery. During his recovery, Michael would need help getting up from chairs and bed, dressing and bathing. He plans to hire a home health aide to provide assistance for six hours every day at a cost of $126 daily. He has a long-term care insurance (LTCi) policy that will begin paying benefits after he meets his 90-day elimination period, but in the interim, Michael expects to incur more than $11,000 in care expenses. A short-term care policy could help cover most of the cost incurred while Michael waits for his LTCi benefits to kick in.
1Example assumes a 200 Day Benefit, 20 day EP, $210 Daily Benefit, No Inflation, Issued at age 43.
Look for clients who:
Also, short-term care can be a good fit for people who are:
Medico — Recovery Care Platinum
For more information on LTCi and short-term products call a marketing consultant
LTCi Department 1-888-456-8884 (option 4)