In the past, Long-Term Care insurance (LTCi) with lifetime coverage, and short or no deductible periods from day one, was considered the only acceptable choice. However, rising premium
costs have modified Producers’ and Buyers’ coverage expectations. Some coverage is
better than none is the current philosophy, which has led to the rising popularity of alternatives
to more traditional Long-Term Care (LTC) coverage.
Sharing LTCi Coverage With Your Partner
Many Long-Term Care insurance (LTCi) policies include a joint coverage option for couples. The American Association for Long-Term Care Insurance (AALTCI) estimates that 54% of new
policies sold are for joint coverage. This option is often less expensive than two individual coverages and means the coverage can be used by either insured.
Insuring the Greater Risk
Another strategy is to purchase LTCi only for the partner considered to be most at risk. If the “at risk” partner needs LTC first, it will help to maintain the couple’s financial security and independence.
Annuity/LTCi Combination Policy
Anyone who doesn’t buy LTCi is self-insuring his or her risks whether they realize it or not. This strategy may not cover all of the costs of providing care, but combination policies, like
AnnuiCare®, enable policyholders to maximize their money for LTC. These policies double or triple the annuity value to provide LTCi for a moderate premium and with no out-of-pocket premium costs.
Statistics to Consider
According to the government, 70% of those age 65 and above will need some level of care as they age.1 Unfortunately, there is no way to accurately predict how long the care period will be or the level of care needed. The AALTCI, 2010 and 2011 LTCi Sourcebooks estimate the following:
20% of people will need care for two – five years.
20% will need care for more than 5 years.
Conditions such as dementia or Alzheimer’s could require 24/7 care for as long as ten years.
Slightly more than one-third of LTC claims are for nursing home care and 27% of nursing home claims are for Alzheimer’s patients.
67.5% of all LTCi claims in 2010 were paid for women.
Sharing Coverage With Your Partner Increases Your Risk
Sharing coverage seems to make sense when you consider that women are caregivers more often than men and usually live longer. It’s assumed that the first insured needing help will be cared for by his/her spouse leaving the bulk of the benefits for the remaining insured.
Unfortunately, women are more likely to have chronic and disabling health problems. In
addition, there is no way to predict if and when care will be needed, the level of care needed or the length of time it will be needed.
If both spouses need care at the same time or either has Alzheimer’s, years of round-the-clock care could be needed. Caregivers must also be healthy enough to handle the physical and emotional
stress that care-giving may entail.
It’s important that clients understand they may be taking a gamble when they share coverage. This strategy may leave one of the partners with little or no coverage. It could cost them their independence and their financial security.
Insuring the Greater Risk
It’s risky to leave one of the partners without coverage; however, the risk is increased if the uninsured partner needs care first. The couple’s financial security would be compromised and could risk the insured partner’s ability to continue to pay for LTCi.
AnnuiCare®
Guaranty Income Life’s annuity/LTCi combo product triples the policyholder’s Annuity Value for LTC coverage and may be the answer to providing coverage for both spouses.
It is priced at approximately one-third the premium cost of a traditional LTC policy with similar benefits. In addition, the policyowner never has to worry about sending in the premiums
because they are deducted from the Annuity Value monthly. The annuity continues to grow; and if the owner dies without needing LTC, his/her beneficiary will receive the Annuity Value.
Once an insured is certified by a Licensed Health Care Practitioner as being unable to perform, without substantial assistance, at least two of six Activities of Daily Living (ADLs) for a period of at least 90 days due to loss of functional capacity; or having a severe cognitive impairment, such as
Alzheimer’s Disease, an AnnuiCare® policy will pay Long-Term Care expenses up to 100% of your Daily Maximum Benefit for:
Home Health Care*
Homemaker Services
Hospice Services
Personal Care Services
Assisted Living Facility Care
Alternative Care Services
Nursing Home Care
Respite Care Adult Day Care (50% of Daily Maximum)
*Includes Adult Foster Care in Oregon
FlexPlus
Applicants who don’t qualify for an AnnuiCare® policy may purchase a FlexPlus annuity, which can provide enhanced withdrawal and annuitization options. These options can provide the funds needed to help pay for care.
For more information about how these products will help your clients plan for the future, contact the Guaranty Income LIfe Sales Team at 800.535.8110 ext. 292. You may also view a webinar
by National Sales Director David F. Royer at www.GILICOlink.com. The website User Id is download and the password is prq891.
1. U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information
