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Nine Questions Women Asked Us About LTCi
L
ong term care challenges impact women both as caregivers and recipients of care. In a recent webinar titled “Women and Long-Term Care,” we reviewed these challenges with a panel of female long-term care experts. They offered solutions for ways that women could navigate the complexities of caring for a loved one and planning for their own care. After we presented the challenges, it was clear that creating a personalized long-term care plan could provide women with much deserved peace of mind. We were thrilled to receive as many questions as we did about the topic and many of them centered around long term care planning. We’ve provided some of the top questions in this article. The long term care planning process is personal and it’s important to understand what options are available to your female clients and what the long-term care planning process involves. Here are highlights from the webinar. At what age should I purchase long-term care insurance? A: This is always one of the questions we are asked the most and the answer is not as simple as the question may sound. Many people wait to purchase LTCi until the ages of 40 to 65, and some purchase after they have had a personal experience with a family member who required care. However, the younger your client is when they plan for long-term care, the more options theygenerally have and the more affordable the coverage. That’s not to say that older people don’t have options. A good long-term care specialist can help your client determine what is available.
Would you explain the difference between hybrid and traditional or standalone long-term care insurance? A: Long-term care insurance was created with the specific purpose of providing a pool of funds that can help pay for long-term care costs. Traditional long-term care insurance typically works like auto or home-owners insurance — you pay a recurring premium with the objective of getting the maximum risk protection in the future. You hope to never use the policy, but if you do, most of your premiums go toward the LTC coverage. Your client generally doesn’t receive money back if they don’t need long-term care services. Hybrid or Linked Benefits plans provide long-term care benefits that are usually linked to a life insurance policy or an annuity. Premiums are often paid as a lump sum or over a specified number of years. Hybrid products have become popular as more options have emerged to fill gaps in the standalone market. Pricing and insurance leverage has become more competitive in the Hybrid market over recent years. Hybrids may offer guaranteed premiums, guaranteed LTC benefits, cash indemnity benefits, and even significant life insurance or annuity benefits if long-term care is not needed. Hybrid plans can be appropriate for people with health issues but may also be used in some cases together with a traditional plan. Seek out more information on planning for LTC when your client has a health issue. Sometimes all of these extra features do not cost significantly more for the same level of LTC benefits as a standalone policy. As usual, a specialist can help your client shop the market to find the best value for their situation.
How do we pick the right insurance company? A: The best approach is to advise your client to speak with a long-term care specialist about their needs and their budget. The specialist will make recommendations about products that might be a good fit for your client and they can provide information on the carriers. Insurance companies are regulated by each state in which they do business. They are also rated by independent agencies such as AM Best. Encourage your client to do their own research on any company that they might be considering. Better yet, offer to partner with a specialist to advise your client as part of building their long-term plan.
What does it mean to self-insure? A: Self-insuring is also known as self-funding. It means that the person receiving care will cover some or all long-term care costs out-of-pocket through income or savings. One of the challenges with this approach is that the cost of care in the future can quickly drain savings. Once you exhaust savings, your client is left with few options outside of Medicaid. Insurance can offer a larger pool of funds that can protect their savings, relieve their family members of the burden of caregiving, and provide your client with many more options that may include home health care.
24 | CALIFORNIA BROKER
CalBrokerMag.com
DECEMBER 2023
