Protecting hard-earned assets. That’s at the heart of every modern long term care (LTC) policy. Funding home care assisted living or nursing home care can deplete a retirement nest egg quickly. That’s why it’s important to have the LTC conversation with your clients. And Covr Insurance Technologies (Covr) is right there with you, providing modern LTC products, a digital sales platform and valuable training and sales aids so you can comfortably and confidently engage your clients on this important topic.
47% of men and 58% of women will need some form of long term care in their lifetimes. With longer life expectancies and the possibility that a spouse will not be around to provide care, women are especially at risk. Regardless of gender, the duration of care required can range widely from as little as a few months to a decade or more in the case of dementia and Alzheimer’s disease. The costs could potentially derail a well-designed and funded financial plan.
The cost of care varies widely across the country. For instance, the median annual cost for in-home care in Virginia in 2018 was $48,000 and $102,000 for private nursing home care, with a five-year expected annual increase of 3% and 4%, respectively. In New York, however, a home health aide was $57,000 and $146,000 for private nursing care over the same period.
LTC planning has changed dramatically in the past 20 years. Significant premium increases on existing, traditional LTC business combined with the “use it or lose it” nature of traditional LTC, has driven consumers to demand innovation in LTC insurance. Modernization is ongoing, but many of the issues that plagued traditional LTC have been addressed by today’s LTC insurance options. Leveraging the price stability of life insurance as the backbone of modern LTC policies, today you can expect guaranteed premiums, death benefits and even a cash value as part of the policy. Here are the two primary styles of life insurance based LTC:
Permanent life insurance policy with an LTC Rider – At its core, this product allows the insured to accelerate death benefit face amounts to help pay for a qualifying LTC events. These policies provide a pool of money from which benefits may be drawn for LTC needs or, if these expenses are not required during the insured’s lifetime, a death benefit is paid to the beneficiaries upon the death of the insured. Policy premiums can be paid in a lump-sum or over a period of years. This ensures that the annual cost does not increase over time. The notion of a guaranteed benefit, either as LTC or life insurance, and the fact that premiums will not increase over time, are appealing features of this modern take on traditional LTC protection. Clients who are interested in income protection or wealth transfer, and are also concerned with the risk of a health care event, are great candidates for this style of coverage.
Asset-Based LTC Policy – For clients who prefer the benefits of more LTC coverage vs death benefit coverage, this style of policy will allow them to maximize the LTC benefits while only paying for a smaller
death benefit. While these policies include a cash value and death benefit, the main feature is a third pool of LTC dollars available for care after the death benefit has been exhausted.
The third pool of LTC dollars often starts at double or triple the initial death benefit and can be increased with guaranteed inflation options. Asset-based policies can be funded in a variety of ways, with many payment periods and funding options available. Guaranteed premiums, death benefits and a robust LTC pool make this modern style of long term care protection appealing to many clients. Clients who are currently self-insuring, have funds earmarked for care, or simply appreciate the value of leverage are also great candidates for this version of coverage.
How to Get the Modern LTC Ball Rolling
Covr partners with best-in-class insurance companies to give you a choice of either:
- A permanent life insurance product with an LTC rider, or
- An asset based LTC product with life insurance protection.
Why sell through the ground-breaking Covr digital platform?
- A digital, paperless experience
- Education and planning – we give you simple educational tools and professional guidance so you can gain confidence and sell more
- Drop ticket white glove service and communication process
- Full compensation
Contact Chris Foley or your Covr RIC to begin selling today!
[email protected] – (208) 350-7060 | Ext. 9283