Leave “use it or lose it” LTC coverage behind

There’s a better solution for building long-term care expenses into a comprehensive retirement plan

There’s a missing piece to many retirement strategies today — how to manage potential long-term care (LTC) expenses. In fact, just 28% of Americans nearing retirement age say they have money set aside to pay for future living assistance expenses.¹

This creates a disconnect from the reality that many will face in their later years. An estimated 70% of people turning 65 today will need LTC services or support in their lifetime.² And if they’re unprepared to manage these expenses, the financial impact can be devastating.

The downside of traditional LTC plans

Due to its reputation of being expensive and difficult to obtain, many clients have grown weary of traditional LTC insurance. And because it’s generally “use it or lose it” coverage, they risk paying the premium, but perhaps never using the coverage. It’s a tough sell. However, the need remains — and there are now innovative options beyond traditional LTC insurance.

The next generation of LTC coverage

There’s a new way to cover the LTC gap with your clients. Some carriers are offering an innovative solution — a fixed index annuity (FIA) with an LTC rider. There are several perks to this approach:

Tax advantages — The annuity premium grows tax-deferred, and benefits for qualified LTC services are tax-free.³

Dual benefits — The LTC rider offers LTC coverage when clients need it, and the FIA offers accumulation value when they don’t.

Simplified underwriting — FIA/LTC hybrid solutions make it easier for clients to get approved, and some carriers even guarantee approval.

Principal protection — The FIA provides protection from market losses when the client doesn’t need LTC services.

Some carriers even go a step further, offering personalized wellness programs that help clients live healthy lifestyles and potentially delay or prevent the need for LTC services.

Chart a course for the future

If you haven’t talked with your clients about building potential LTC costs into their retirement strategy, the time is now. An FIA/LTC hybrid is an effective way to close the LTC coverage gap, while avoiding the pitfalls of traditional LTC insurance.

Learn more about an innovative fixed index annuity with a long-term care rider and wellness program.

1 “The Affordability of Long-Term Care and Support Services: Findings from a KFF Survey”; Kaiser Family Foundation; November 14, 2023; https://www.kff.org/health-costs/poll-finding/the-affordability-of-long-term-care-and-support-services; accessed September 6, 2024.

2 “How Much Care Will You Need?”; Department of Health and Human Services; Administration on Community Living; February 18, 2020; https://acl.gov/ltc/basic-needs/how-much-care-will-you-need; accessed September 6, 2024.

3 Subject to IRS daily maximum.

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