Keeping LTCi Rates Affordable
The good news is that awareness about the possibility of needing long-term care is at all-time high. The Washington State payroll tax along with the WISH Act are forcing Americans to take a closer look at what their plan is should they need assistance with personal care as they age. Additionally, many Americans are seeing the effects of being a caregiver themselves to a family member or friend. There are nearly 53 million unpaid caregivers among us today providing on average of 24 hours per week of care.
The bad news is that clients may already have their pre-conceived ideas about the affordability of long-term care insurance. It’s important that we – as insurance professionals and advisors – design a plan that not only satisfies their concerns about paying for long-term care but that it is also an affordable solution.
Tip #1: the average premium being sold by our long-term care insurance specialists is approximately $2500/year. Using this as a baseline is a great place to start when proposing long-term care insurance to your client.
Tip #2: I believe it’s also important to look at the Cost of Care in your area (Genworth Cost of Care Study) and tally what home care would cost for 24 hours per week (National Average is $2500/month). Clients instinctively want to concentrate on those Nursing Home Facility costs, which while they are staggering, based on claims data, most of our policyholders (70%+) are not receiving care in a Skilled Nursing Facility – they are utilizing care at home and an Assisted Living Facility.
Tip #3: Lastly, I would consider this quote from Genworth CEO Thomas McInerney, as saying "Coverage at $250,000 would cover about 80% of all the claims we have had". Genworth has the largest book of business in the LTCi market today, with 300,000 claims paid. If you are quoting plans with over a $250,000 benefit pool, it might be time to reconsider that approach.
Do you have a client in mind to try this approach? Please call a member of our marketing team today. 1-800-945-1953