November is Long-term Care Awareness Month.
LTC Awareness Month gives you the perfect opportunity to talk to people about the need for
long-term care planning. And while it’s not always a subject everyone is eager to talk about,
it’s one that’s too important to ignore. Opening up the discussion with your clients is easy with these statistics.
- The U.S. Health and Human Services (HHS) estimates between 1/2 and 2/3 of Americans turning 65 today will develop a disability serious enough to require long-term services and support (LTSS)
- Ten years from now, in 2029, it is estimated that 80% of middle-income seniors will have less than $60,000 a year in income and assets, not including equity in their homes. Yet the estimated cost of assisted living plus out-of-pocket medical expenses will hit $62,000.
- Many seniors consider selling their homes to finance long-term care. However, a group of policy experts at the Long-Term Care Financing Collaborative group finds that among 65 to 74-year-olds, the median household had about $100,000 in home equity, which will not go very far.
- Remember that Medicare does not pay for independent or assisted living. Medicare pays for doctors, hospitals, drugs, and short-term rehab after hospitalization.
- Many people mistakenly believe they can count on Medicaid to pay for LTC services, but that is not often true. For Medicaid to cover the costs, recipients must first meet income eligibility requirements (or spend down their assets), and care is restricted to Medicaid-approved services and facilities.
What Is Long-Term Care (LTC)?
LTC is health or personal care services given over an extended period of time. LTC services help with the basic functions necessary to live independently. This is defined as the Activities of Daily Living, or ADLs. The six ADLs are bathing, continence, dressing, eating, using the toilet and transferring. If you are incapable of performing at least two of these six ADLs, you may need LTC services, which can be quite costly.
To give you an idea of how expensive LTC can be, the following is data from the 2019 Mutual of Omaha Insurance Company’s Cost-of-Care Study:
- The national annual median cost for a private nursing room home is a staggering $104,137.
- It costs $91,454/year for a semi-private room.
- In-home health aides charge on average, $55,941/year.
- It will cost $56,697/year to be in an assisted living facility.
- An adult daycare center can cost $25,200/year.
Typical Long-Term Care Buyer
- Female, aged 55 to 64
- Married with children
- Working in a white-collar profession; not yet retired
- College-educated
- A homeowner
- A “planner” who is interested in financial issues
- Knows someone who has needed LTC services
- Research-oriented
- Online user, self-educated about LTCi
How to talk to your clients about LTC
Mutual of Omaha suggests three different approaches when talking to your clients:
1. Who do you know?
2. What’s your plan?
3. How will you pay?
Click Here to read about how to expand on these questions.
Solution
It may be hard for your clients to imagine themselves becoming ill and needing LTC, but planning now for the possibility can help with expenses that would otherwise come from savings. A Hybrid Solution of Life Insurance + a Long-Term Care Rider is one solution to obtain long-term care. The life insurance protects loved ones with a death benefit, while the long-term care rider allows you to use all or a portion of the death benefit for qualified long-term care expenses.
Another solution is when a married couple with separate policies shares an LTC plan. If a spouse dies without using LTC benefits, these benefits pass on to the surviving spouse.
Agents
Empower Brokerage is dedicated to helping you produce a fruitful 2019-2020 season. We offer webinar training, one-on-one calls, seminars, and marketing plans, all geared toward your success. Give us a call if you have any questions 1-888-539-1633.
If you have questions about LTC insurance policies contact our Life and Annuity experts at 1-888-539-1633
