Life insurance with a long-term care rider gives your clients a tax-efficient way to help face these expenses. This combination enables them to:

Maintain some control

• Helps manage long-term care costs so they don’t deplete assets
• Offers the potential to stabilize premiums so they don’t skyrocket as the client gets older
• Can pay rider benefits directly to the policyowner for qualifying expenses without the need for receipts (this is referred to as an indemnity-style benefit)
• By using excess funds not needed for qualified care to cover other expenses

Life insurance with a long-term care rider gives your clients a tax-efficient way to help face these expenses. This combination enables them to:

Help protect their family

• From financial hardship
• By leaving an inheritance to family members or even a favorite charity
• From the possible stress and fallout of having to care for aging family members

And if the insured never needs long-term care, the beneficiary receives the death benefit from the policy — which helps eliminate the “use it or lose it” objection many people have to traditional long-term care policies.

Once you’ve identified a potential long-term care client, you can use the following questions to help start a conversation on the need for, and benefits of, planning.

How would you feel about a plan that would allow you to stay in your home should you no longer be able to care for yourself?

Ask these questions to dig deeper:

• Did you realize that half of all long-term care claims are for home health care?
• Would you like a plan that gives you the flexibility of choosing who your providers are?
• What would you think about a plan that allowed you to spend excess benefits not needed for medical care any way you choose? (for example: paying prescription costs, allowing a family member to supplement your care)

Do your children have the physical ability or financial stability to care for you later in life?

Ask these questions to dig deeper:

• Can your child afford to quit work or reduce hours to care for you?
• Do you want to move where your child lives?
• Is it possible that one child will have to bear the majority of the responsibility for your care?
• Have you actually discussed your long-term care plans with your adult children?

Use the following list of suggestions to help overcome common objections and help your clients prepare for the future.

Concern:

Long-term care coverage is too expensive.

Points to consider:

Life insurance with a long-term care rider can be surprisingly affordable. While the exact cost will vary based on your clients’ age, sex and other factors, adding the rider to their life insurance policy may increase costs by as little as a few hundred dollars each year.

Concern:

I already have a stand-alone long-term care insurance policy — I don’t need any more coverage.

Points to consider:

Life insurance with a long-term care rider can be used to supplement the coverage your clients already have in place. It can serve as a backup in case they exhaust their stand-alone policy’s benefits or simply to provide additional funds. Please keep in mind that any amount of total benefits that exceeds whichever is greater, the daily HIPAA rate or the actual bills for care, will be taxed as ordinary income.

Concern:

If I need care, Medicaid or Medicare will take care of the costs.

Points to consider:

To qualify for Medicaid, your clients’ assets can’t total more than a few thousand dollars (the exact amount varies by state), and rules are strict to prevent people from giving away assets to qualify. For those who do qualify, choices are very limited: they can’t make their own decisions about the type and place of care.

Medicare is very limited in what sort of care it will pay for, and how long it will pay. It is limited to skilled care, which is defined as short-term services to help patients recover from something. Medicare will pay for up to 100 days’ worth of skilled care; the first 20 days are at no cost, but the remaining 80 days require a co-pay. Chronic care, as many Alzheimer’s and stroke patients need, is not covered by Medicare.

Concern:

If I never need long-term care, the money I spend on a policy will be wasted.

Points to consider:

With some long-term care riders, if your clients are fortunate enough to never need care, the death benefit will be paid to their beneficiaries as with any life insurance policy.

Review Our Product Solutions

Your clients each have their own unique needs and goals for the future. So, we offer an indemnity-style long-term care rider on a wide selection of permanent life insurance products to help you provide customized solutions, including our:

Now that you have more information on long-term care planning:

1. Look through your book of business.
2. Schedule a meeting with potential long-term care clients.
3. Use the questions in this guide to help you get the conversation started.
4. And give us a call if you have questions or want to discuss a specific case.