Short-Term Care Could Be A Good Option For Some

DALLAS -- While there are many products filling up their life insurance and annuity shelves, independent agents should not overlook short-term care options.

For a few quarters a day, a short-term care policy can help a client get through a major unexpected emergency, said Jack D. Broughton, vice president with Kemper Senior Solutions.

Broughton spoke on the value of short-term care Friday at the National Association of Life Brokerage Agencies annual meeting.

Short-term care policies normally cover claims for one year or less. Somewhat under the radar, the policies have a versatile quality to help consumers with a number of emergencies where their regular income-generating routine might be disrupted temporarily, Broughton said.

For example, patients who need rehabilitation can activate the policy while recovering at home. Some nine to 11 million Americans need home health care, according to data from the National Association of Home Care & Hospice.

"It's a rare patient who prefers to recover in a hospital when home health care is an option," Broughton said.

Short-term policies get lumped in with long-term care insurance, but the policies are very different. While LTCi has had a turbulent history with pricing troubles, short-term care policies have remained stable, Broughton said.

Using his home state of Oklahoma, Broughton said a typical home health care policy costs $26.40 per month for someone aged 46-55, and $36.20 monthly for someone aged 65-70. Policies are available starting around age 40.

For that, it pays out $150 a day for up to a year -- a maximum benefit of $54,750. Typical short-term policies have other benefits as well, such as paying for a private-duty nurse and a prescription drug rebate.

"This pays out regardless of Medicare or any other insurance plan they may have," Broughton said.

Benefits are restored after 180 days of no claims. 

One-page application is all that's needed and there's no physical or probing health questions, Broughton said. Applicants just need to attest that they are able-bodied and not already at a claim status point, he explained.

"The issue rate on this plan is like 98%," he said. "The plan is guaranteed to renew. As long as they pay their plan premium, it's guaranteed to renew without regard to their health situation."

Short-term insurance represents "a great cross-selling opportunity for the agents" selling Medicare supplement, Medicare Advantage, as well as LTCi, Broughton said.

Best of all, many plans have been around for decades with no price increases, he said. In other words, the insurance is tested and the pricing is solid.

"The reality is that not everybody can afford a long-term care policy," he said. "The premium on a long-term care policy is $5,000 a year. This is $500."

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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