Protection Products

Finding the Funding for Long-Term Care (LTC)



Finding the Funding for Long-Term Care (LTC)

You’ve identified a client and had the conversation. You know your client would benefit from a funding[CT1] plan for long-term care and is ready to get started. Now what?

In recent years, more and more long-term care solutions have become available. And while they offer a lot of flexibility, the choices can seem overwhelming. Fortunately, your Ash LTC team is here to help you understand what the products do, and how to design a plan for your client.


Are linked benefits the solution?

Linked benefit products have taken a prominent role[CT2] when it comes to LTC planning. And while they won’t be the answer for every client, it’s worth having a basic knowledge of how they work, and what goals they can help your clients reach.


Let’s look at a case study to see how where a linked benefit product might be a good fit.

Suzie and Tom are active 60-year-olds who take good care of themselves. They do not expect to need LTC and have not been impressed with what they’ve heard about traditional long-term care insurance However, they’d like to leave an estate for their three grandchildren and recognize that an LTC event could destroy their financial legacy. When they discussed their concern with their advisor, she suggested linked benefit policies. They can each purchase a policy that starts paying benefits when the insured needs LTC or dies, whichever occurs first.

The advisor helped Tom and Suzie design their policies to:

  • Pay a death benefit of $150,000, leaving each grandchild $50,000 if the policy isn’t used for LTC.
  • Provide about 200 hours of custodial or home care each month, if LTC is needed. It would cover most of the average cost of care in an assisted living facility, and more than half the average cost of care in a nursing facility. Tom and Suzie’s income and other assets can complement the policies, because if they do need to go to a facility, their food, housing and transportation costs would be greatly reduced.
  • Increase by 3% compound each year to help offset inflation. The longer Tom or Suzie wait to access their policy, the larger the available LTC benefits[CT3]. 
  • Provide seven years of LTC benefits (or even longer, if the full benefit is not used each month[CT4]). For a claim starting at age 80 (20 years after the policies were purchased), each policy could pay about $700,000 in LTC benefits. For a claim starting at age 85, however, it could pay upwards of $800,000[CT5].
  • Include a residual death benefit, allowing them to leave a small gift to each grandchild even if the policy is needed for LTC.


In essence, this strategy uses the death benefit that would be paid to their grandchildren to help “self-fund” the first two to three years of long-term care. The insurance should cover at least a substantial portion of LTC costs thereafter, until the coverage runs out. Naturally, the cost of this insurance depends on gender, health, resident state, when the policy is purchased, etc.


If your clients are interested in leaving a legacy but are concerned that an LTC event might make that impossible, let us know. Your Ash LTC team is here to help you design a plan, find the funding and exceed your clients’ expectations.

Just Ask!

 [CT1]A plan for LTC does not necessarily involve insurance.  Insurance is a funding mechanism

 [CT2]“Front seat” seems to overstate as more stand-alone policies are still sold than linked benefit

 [CT3]Moved up to highlight more and mentioned inflationary consideration

 [CT4]Just checking as to whether we are typically quoting 7 years now.

 [CT5]Moved up with the 7 year comment and changed “would” to “could”. 

John Hancock Long-Term Care Rate Increases


In December, John Hancock will begin petitioning State Departments of Insurance for in-force long term (LTC) care rate increases.

John Hancock anticipates an average increase of approximately 30% across most of its LTC business. The approval process could be as short as six months, or take as long as a couple of years. The increases will only be implemented in a particular state once they are permitted to do so.

John Hancock plans to offer benefit adjustment options to help insureds mitigate the impact of the rate increase. We anticipate plans to offer at least two premium neutral options: the shared cost option and reduced inflation landing spots.

Many of you have already dealt with LTC in-force premium increases. You understand the strain and confusion a premium change can bring to your clients. Ash Brokerage can help. We can provide the resources to help evaluate the options presented to your clients. There are many factors that should be taken into consideration before a decision is finalized.

  • What is the current age of your client
  • What is their current benefit level
  • What policy benefits do they currently have?

John Hancock will offer a limited number of options, but you may find additional options by contacting John Hancock directly.

The Ash Brokerage LTC team is prepared to help you and your client navigate the increase options. When the notification arrives, please let us help answer the questions and evaluate the options. Contact the Ash LTC team for help.