Top 10 Reasons LTC Planning Makes Perfect Sense for Business Owners

Stephen Denton   |   September 2022   |   4-minute read
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Business owners have unique financial needs. You need to make sure they are protected from risk.

The solution: Focusing on the things we CAN control and helping your clients plan for them.

Be the advisor who talks about long-term care. Be the advisor protecting their bottom line.

Here are the top 10 reasons long-term care planning makes perfect sense for your business owner clients and why YOU need to be the one talking about it:

1. Stressed-out employees are less productive and more expensive.

About 40% of employees are currently providing care to a loved one, whether they identify as a caregiver or not. Employees who are providing care are more likely to smoke, drink, and eat unhealthy food. Also, they generally get less sleep and exercise less — potentially increasing the business’s health and disability costs.

A worksite plan not only benefits employees, but it also benefits their family as well. Even plans that don’t allow for family members to purchase their own coverage will alert employees of the need of talking with relatives about long-term care.
2. The best mix of care is a combination of family and commercial.

Most people who plan for long-term care expect the family to be involved, even if they can afford to pay for around-the-clock care. A plan for long-term care reduces the burden on the family and can lessen the possibility of caregiver burnout.

Employees who help their families plan are more able to balance work and care if a loved one does need care down the road. It can allow them to continue working instead of becoming a full-time caregiver.

3. Long-term care products build a more reliable lifestyle.

Although self-funding a long-term care need is an option, it ties up that money, waiting for the day it’s needed. By transferring the risk to an insurance company, additional funds can be enjoyed instead of remaining earmarked for a potential long-term care event. By offering coverage through the worksite, business owners can not only transfer their own risk, but they can look at carving out benefits for executives as well.

4. It pays to plan early.

Long-term care products include the option to add a compound rider, which increases the benefit each year. Adding 3% compound to a policy means that over 10 years, the policy will provide at least 34% more coverage. That translates into hundreds of thousands of dollars that don’t have to be paid out of pocket.

And for younger employees who might not be able to afford as much inflation protection, there are options to add coverage later, without having to be fully underwritten.

5. Spouses and family members can be covered, too.

Many worksite plans offer discounted coverage to spouses and elder family members, even if the employer doesn’t contribute to the premiums. It’s possible that an employee might opt not to purchase coverage through the worksite, but still help their parents or spouse purchase coverage.

For the business owner, covering the parents is potentially more valuable than covering the employee. With a plan in place, the employee is much more likely to be able to keep working.
6. Employers can pick and choose who they offer coverage to.

In fact, they can choose to offer coverage only to their key employees. And, if they do decide to help pay for coverage, tax breaks may be available in the form of state and federal deductions. But whether or not they contribute, benefits are received tax tree to the insured.

7. Recover premiums in a year ... or less.

No matter how long the policy is in-force, if full benefits are paid for a year, all premiums paid in are typically recovered. And if inflation protection is added and the benefits have time to grow, the premiums are recouped much faster. If the employer is paying the premiums, they are providing their top people with one of the most valuable benefits available in the worksite, a definite retention factor.

8. Worksite plans can offer streamlined applications and payroll deductions.

It's all about convenience for employers. And, in some cases, reduced underwriting for employees (such as ignoring build and cancer history) can also mean higher placement and less hassle for everyone.

It also means continued commissions for you, as payroll deduction keeps policies paid on time.

9. State Partnership programs can protect employees twice.

Having State Partnership programs ensures that once the benefit is used up, the insured can qualify for Medicaid without having to spend down as many assets. For the middle class, this can offer not only protection for a long-term event, but protection of additional assets. Planning now can also protect against state-proposed legislation that could make it harder to get an application processed.

10. It will never cost less than it does today.

This is one case where good things don’t come to those who wait. Long-term care insurance will likely become more expensive, and options more restrictive, in the future. And, as you’ve heard many times, health changes can also make it more difficult.

Hopefully, at least one of these reasons put you in mind of a business owner (or several!) you can help. As the industry continues to evolve, pricing is more stable and your Ash team is keeping up with the fresh solutions available — both for the worksite and for individuals. Reach out today at (800) 589-3000.

About the Author

As an LTC Specialist for Ash Brokerage, Stephen is committed to helping advisors have long-term care conversations with their clients. Prior to joining Ash, Stephen earned a Bachelor’s in Finance from Rowan University as well as his Series 6 and 63 and life and health licenses. He spent 10 years in the mortgage industry in both sales and operations before transitioning to Lincoln Financial in 2007, where he worked for 14 years as an internal wholesaler for linked benefit products.