My grandfather had a long-term-care event late in his life, which lasted for about five years. Even at a young age, I saw how much this event affected not only my grandfather, but also our family and loved ones around him. Because he didn’t have any long-term-care insurance coverage, you could see the strain it put on the family both emotionally and financially. Unfortunately, when he was healthy enough to purchase long-term-care insurance, nobody talked to him about the solutions that were out there and how important they would be to him, should he ever have a need.
Since then, the long-term-care insurance marketplace has changed quite a bit; however, a lot of people are still not aware of the changes. There has been a lot of press about companies getting out of the long-term-care insurance space or increasing the premiums on current blocks of business, but there hasn’t been a lot of press telling the full story of where traditional policies fit and the other solutions that are currently available. For example, today, several companies have jumped into the asset-based long-term care marketplace, with a lot more adding long-term- care or chronic-illness riders to their policies.
The statistics around long-term care are staggering. Seventy percent of people over the age of 65 will require long-term-care services during their lives.[1] On top of that, the cost of a care event could easily devastate a financial portfolio. It’s projected that the cost of a four-year long-term care event in 30 years could cost anywhere from $500,000 to more than a million dollars, depending on the type of care needed by the person.[2]
So why aren’t people talking about long-term care? A key reason is that there are fewer producers in the marketplace. With a lot of producers retiring and getting out of the business, and few young advisors coming in, fewer people are talking about long-term care. This is a great opportunity for young advisors to enhance their practice and make a huge difference in people’s lives.
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By Adam Shaefer
Adam Schaefer is Regional Vice President--Protection Products—at Ash Brokerage Corporation. Contact him at 248- 449-5550 or at adam.schaefer@ashbrokerage.com. (www.ashbrokerage.com)
[1] National Clearinghouse for LTC information, U.S. Department of Health and Human Services: Planning for LTC, Jan 18, 2012
[2] Based on the John Hancock’s Cost of Care Survey and projected rate of inflation of 4.1% as measured by the Consumer Price Index for the 50-year period ending Dec 31, 2011