When planning for the future, consumers tend to view matters through the lens of financial considerations. A recent study from OneAmerica® found that consumers place the highest importance on saving enough money for retirement (86%), eliminating debt (74%), and creating liquid emergency funds (68%). Long-term care (LTC) planning (48%) is the third-least important such action, reflecting the target audience’s relatively low prioritization of LTC. Only 17% see LTC planning as extremely important.
While each person’s situation is unique and each of these elements of financial planning is important, the sequence of planning could end up costing consumers. Sometimes it may be important to prioritize saving for LTC over (or in concert with) goals, such as eliminating debt and/or creating liquid emergency funds. Starting the conversation with clients about long-term care earlier can help them build a strategy over time, but it may also help them protect their insurability as they age. Only 22% of applicants aged 50 to 59 are denied long-term care coverage, while 44% of individuals aged 70 to 79 are rejected, according to the American Association for Long-Term Care Insurance.
Other times, however, consumers should be encouraged to examine if long-term care insurance, especially an asset-based LTC protection plan, is recommended. By waiting too long, there are risks taken that could impact the cost of coverage. If clients in their 30s, 40s and early 50s are focused on saving for retirement, they may miss out on the advantages of starting LTC planning in those years. Putting off the purchase of protection until their 60s or beyond can be costly, both in terms of premium dollars and the potential to become uninsurable.
“As financial representatives, we have the opportunity to help link individuals and families to care and then discuss options to help pay for that care,” says Jeff Levin, vice president and head of Care Solutions at OneAmerica. “Helping families move closer to a holistic funding plan that truly supports all potential scenarios is the best approach. In my many years in the industry, it has been my honor to see LTC insurance provide support at a time when families need it most.”
How to integrate LTC insurance into a retirement strategy:
Starting early — A potential element of a long-term care plan could include an asset based long-term care protection policy, which is a life insurance-based product. Therefore, it stands that if you can apply early in your life when you are healthy, you might find a more affordable option.
Stacking strategy — Clients don’t have to purchase all their protection at once. Stacking creates LTC protection by purchasing multiple policies over time. This allows potential clients to benefit from lower premiums at earlier ages, lock in insurability and adjust when needs change so they can build up to their desired protection amount over time.
Understanding the full benefits of products — Policies these days come with a variety of riders and benefits you may not be aware of. Special white-glove services or payment options can be important benefits to review. These specialty benefits reduce the burden on families and allow caregivers the capacity to spend quality time with loved ones.
Financial representatives have the opportunity to help create a plan that will complement their overall retirement strategy — striking a balance that is comprehensive in nature to cover an unexpected need for care. Engage with your clients today to customize a plan that takes action at the right time.
For additional resources and the full consumer research survey about long-term care, please visit https://bit.ly/LTCINN.
OneAmerica® is the marketing name for the companies of OneAmerica.