LTC Benefits – Won’t Lose It If You Don’t Use It

One challenge with presenting the need for long-term care is that it is viewed as a risk, not a certainty.

It’s not that your clients don’t want the coverage, but convincing someone to allocate funds towards something they may never use can be a difficult objection to overcome.

Good news – Asset Based Long-Term Care (LTC) with Guaranteed Premiums paid for life is here.

It allows your clients to use the LTC benefit if needed – and if they don’t, they can leave the death benefit or accumulated value to their estate.

Clients receive a guaranteed amount of life insurance.  All of which may be used for qualifying long-term care expenses – also, the premium is credited with a guaranteed interest rate, raising the cash value each month.

With the use of the OneAmerica Care Solutions® Rate Calculator, financial advisors can run a quote for key Asset-Care individuals anywhere, anytime.  Plus, get an easy to understand take-home guide for your clients.

Access the OneAmerica® Care Solutions Calculator and run a quote today

Contact your LTC Sales & Marketing Team to learn more.

How LTC Insurance Can Lower Your Clients’ Tax Bill

How do you get people to sit up and take notice?  Talk taxes.  Tell them you have a way to help them reduce their state and federal tax bill.

A Long-Term Care Insurance (LTCi) policy has the potential to help people lower the amount they pay in taxes.

And at the same time, LTCi provides valuable insurance coverage that can help them remain in their home, protect their retirement nest egg and ensure they won’t have to rely on their kids to take care of them.

LTCi Premium May Be Tax Deductible

Each year, the federal government sets guidelines for tax deductibility.  Individual policyholders may be able to deduct a portion of the premium paid for a tax-qualified LTCi policy.  This is called eligible premium.

Business owners who use business dollars to purchase LTCi can also experience significant tax savings based on the tax structure of the business:

  • Self employed business owners may deduct eligible premium paid for the owner, spouse and dependents.  They also may deduct the total premium or actual premium paid for employees.
  • Owner/employees of C Corporations may deduct actual premium for the owner/employee, spouse, dependents and employees.
Policy Benefits May Be Tax Free

Benefits received under a tax-qualified LTCi policy are intended to be tax-free as long as they do not exceed the greater of actual qualified LTC daily expenses or the IRS’ per day limitation.

Out-of-Pocket LTC Expenses May Be Tax Deductible

Generally any LTC expenses the policyholder pays out-of-pocket may be claimed as a medical deduction on a federal income tax return.  The only exception is payment for home care provided by a family member who is not a licensed health care professional.

Some States Also Offer Tax Deductions

Currently a number of states offer tax deductions and/or credits for people who purchase qualified LTC Insurance policies.  And these state deductions and credits are in addition to those offered by the federal government.

There’s No Better Time to Talk Taxes

Everyone is looking for ways to save, which is why now is a good time to talk to prospective clients about the tax advantages of purchasing LTCi.  They’re sure to be more receptive when they learn that purchasing the coverage they know they need also can help them reduce their tax bill.

For more information, contact your LTC Specialist today.

LTC: A Conversation Worth Having

Most of you know how to start the conversation about Long-Term Care planning with your clients, but are you making it a priority to actually have these discussions on a regular basis?

Consumers Are Acknowledging the Need

According to a recent survey conducted by one of our Strategic Carrier Providers, consumers have insightful thoughts on the importance of planning for Long-Term Care.

  • 85% agree that it is irresponsible not to plan, but they can’t bring themselves to address the issue.
  • 75% state they have so many other concerns, that addressing the risk for care is not a priority.
  • 60% agree that purchasing Long-Term Care Insurance is the best way to handle the cost of care.
Meet Their Needs

The national average cost for care in a nursing home is about $85,000 a year.  If costs increase at an average 4.1% a year,the average cost will be $286,000 a year in 20 years.  With this level of financial risk, the value of planning is clear.  You can help your clients by:

  • Quantifying the risk to your client’s assets
  • Providing plan options that enable them to insure some or all of the risk
  • Keeping their budget concerns top of mind
The Ball is in Your Court

Clients are open to having a discussion on Long-Term Care planning.  However, most people won’t address the issue without the intervention of a financial advisor.  It is important to educate your clients and demonstrate how LTC can be an appropriate solution to help protect their assets and their families.

Make it a priority in your practice, and show them how it fits as a priority in their overall financial plan.

Have Conversations

Understand that your clients may not bring up the need to plan for Long-Term Care on their own.  It’s up to you to help them secure their future and ensure they have the financial resources should they ever need care.

Take a proactive approach and have Long-Term Care planning discussions with your clients starting at age 50.

Help Clients Hedge Their Risk

Highlighting the cost of care can be a powerful, yet non-threatening way to engage clients in a Long-Term Care (LTC) planning discussion.  It also can provide a convenient starting point for designing a policy that will meet your client’s needs and budget.

Since the future estimated average cost for multiple years of care can be quite high, it’s important that both you and your client don’t view LTC Insurance coverage as an all-or-nothing proposition.

Highlight The Cost Of Care

First, discuss with your clients where they would like to receive care should a Long-Term Care event arise.  Based on their response, show them what the estimated cost of three or more years of care is today and in the future.

We can help you and your client explore the cost of care, including:

  • Current costs for Long-Term Care for all areas across the country
  • Estimated costs for LTC events lasting 1-10 years
  • Projected future costs for Long-Term Care based on inflation
Develop a Strategy

Once your clients have seen the financial impact that a long-term event can have on their assets, help them develop a strategy to insure some or all of the risk.  Base your plan design on what you know about your client’s financial goals, and adjust your recommendations based on their budget concerns.

Some clients may be willing to insure part of the risk by paying a portion of their future expenses out of pocket.  Others may prefer to protect all of their assets, to ensure a spouse/partner’s financial well being or to leave a legacy to their children.  In either case, LTC Insurance can provide a significant level of protection.

Manage the Premium

You have a surprising amount of flexibility when designing an LTC Insurance policy.  If you start with a policy that accounts for your client’s total estimated future cost of care, be sure to consider alternate plan designs that help to lower the premium, if needed.

Consider this approach:

If you started with a longer benefit period and compound inflation, consider shortening to 3-5 years to save money, while still providing ample coverage for most care needs.  Leaving off compound inflation protection can make a big impact, potentially cutting the premium in half.  With this strategy, consider a higher initial daily benefit to account for future cost of care increases.

Become a Resource

Become a “cost of care” expert in your community.  Leverage us as a point of reference in your prospecting efforts.  After seeing the potential impact that an LTC event can have on their assets, your clients may feel compelled to protect their future with LTC Insurance.

Contact your LTC Associate today for more information and resources.

Put The Power Of Storytelling To Work For You

You already know that quoting statistics doesn’t sell Long-Term Care Insurance.  That’s because most people don’t see themselves needing LTC services, and using statistics to try to tell them otherwise will do little to convince them.

Barraging prospective clients with product benefits and features doesn’t work either.  If they don’t believe they need LTC Insurance, touting all the bells and whistles of the product isn’t enough to make the sale.

So how do you get people to sit up and take notice?  Tell them a compelling, engaging story about the positive impact an LTC policy had on someone’s life.

Find a good story

Chances are you already have a story that will work for you.  Draw on your own experiences.  If you’ve ever had to care for a parent or grandparent, you know how difficult it can be.

Or you can use other people’s stories.  A story doesn’t have to be your own.  It can be just as powerful to share the experiences of family members, friends or clients.

Make it memorable

When telling your story, paint a word picture.  Don’t just describe what happened.  Instead, talk about how it made you or the people involved feel.

Also, you need to make sure your story is relevant.  A prospective client with no children probably won’t relate to a story about how difficult an LTC situation is on the kids.

Finally, don’t scare people.  Make sure your story has a happy ending that comes about because of LTC.

Get your clients to share their stories

According to a survey of LTC policyholders, 78% said they had a family member or friend who needed LTC services.

So your story may prompt prospective clients to recall stories of their own.  Ask questions that invite them to talk about these experiences.  Who knows, this might be how you get your next good story.

Here are five questions that will help you prompt clients to share their stories:
  • Do you know someone who needed Long-Term Care services?
  • Who provided their care? (Generally, a spouse or child is the primary caregiver.)
  • What effect did this have on the caregiver?  On the family?
  • How did they pay for the care they needed?
  • What effect did this have on their finances?  On their retirement plans?  On the inheritance they hoped to leave for their kids?

For more sales ideas, contact your LTC Specialist today.