What do you think of when I say "long-term care?" When I first started at Ash Brokerage, I thought of an 80-year-old Alzheimer's patient wandering around a nursing home with no hope of leaving. The most positive image I had was of Allie and Noah in “The Notebook,” sharing a room together in a facility where they would eventually pass away. It’s a great sappy love story, but it’s still not very positive, right?
Well after two years of designing care plans for families, my view has taken a 180-degree turn for the better. The days of gray nursing homes filled with our grandparents are becoming an image of the past, I’ve learned – more than 70 percent of LTC claims are being used for home health care.* People are staying in their homes as long as they possibly can. Knowing that statistic, can you tell me why we are still selling LTC policies to cover nursing homes?
You might argue that you want to sell your clients an LTC policy that puts them in the Ritz-Carlton of nursing homes, but unless your client is a millionaire, that's going to be hard. The days of 5 percent compound cost-of-living adjustments and lifetime-care benefits are gone; a close comparison to those policies can cost a client more than $10,000 a year in premium. If they can afford that God bless them, but I know my family can't.
There is a market for traditional LTC insurance. The difference in the market of late ’90s and early 2000s is that we're not covering nursing homes – now we're covering home care.
Let's look at an LTC benefit of $4,500 a month for three years. That's a total bucket of $162,000, which is enough to cover home health care costs in most of the country today.* Add a cost-of-living adjustment to keep up with the rising costs of care, and by age 80, that client is looking at a healthy policy – one that can give them peace of mind as they age. It can keep them in their home when they are sick. It can keep their family from fighting over care. It can even allow them pass their hard-earned assets to their loved ones.
Oh, and did I mention if we talk to them early enough, and they are healthy enough, that same peace of mind could cost your client less than $3,500 a year? That's literally less than the cost my Verizon wireless family plan each year ...
Put It In Practice: Do yourself a favor and stop making the association of "LTC = nursing home." There's a whole new, positive, innovative LTC market out there waiting for you and your clients. They'll thank you for thinking differently.
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