Seniors 65 and older comprise the fastest growing age group in our society. We’re living longer—and that often means living with chronic illnesses that require expensive nursing care. Having a long-term care plan is more important now than ever.
During our seminars we like to pose the question, “what is your strategy for not growing old?” Since nobody ever has such a plan, we suggest instead finding ways to deal with aging. And many experts say that the biggest risk to a person’s retirement savings is in reimbursed long-term care needs.
The traditional method to hedge against long-term care cost has been to buy a stand-alone long-term care policy. These plans have a couple of drawbacks. First, as with home owners’ insurance, users must pay a premium every year even though they might never need to file a claim. Second, rates can go up—over the past 5 years, most of the major traditional long-term care insurers have raised rates on existing clients.
Fortunately, the marketplace has responded with several innovative products that address these shortcomings. Companies are now combining life insurance or annuity products with long-term care. In this way, the clients are guaranteed to use the product, if not for long-term care needs, then for the death benefit. Many companies also guarantee the premium so there is no potential for rate increases in the future.
It’s important to have access to all of the major companies that offer the combination products. Understanding the different products on the market in order to select the right solution for your client is essential. Talk to your clients today about this important issue.
Image courtesy of Alex Proimos on Flickr
