Following a period of substantial growth from the 1990s to 2010, Traditional LTC Insurance has encountered difficulties in expanding over the past decade. While sales remain steady, they are not significant enough to address America's Long-Term Care funding crisis. This has been highlighted by various negative press articles, including one from the New York Times' "Dying Broke" series in November 2023.
Recent posts by Tom Riekse Jr.
7 min read
Your Wealthy Client Can Self-Insure for Long-Term Care. But Should They?
Let me ask you a question. How much will your long-term care cost?
The answer, of course, is you have no idea. You may be one of the lucky ones who are completely independent and dies of "natural" causes in their sleep. Or you may be diagnosed with early-onset Alzheimer's and need expensive care for a number of years. It's not unusual for people to spend up to $20,000 per month on long-term care (I've got family experience).
It's often said that LTC Insurance is for the middle class - the poor can rely on Medicaid to pay for care and the wealthy can pay for care themselves. But is self-insuring, or to be more precise self-funding, always the best choice?
Topics: Long-Term Care Extended Care Limited Care Research/Trends Tax Benefits Limited & Extended Care Planning Center
2 min read
These Two Trends Signal Much Higher LTC Costs in the Future - Regardless of Inflation
Designing a LTC plan that will have appropriate benefits in 30 or 40 years can be really challenging! Despite that, many older LTC policies have actually done a pretty decent job of keeping up with the cost of long-term care. How do I know? Well, my Mom purchased an LTC Insurance policy from CNA Financial back in 1991. The initial benefit was $100 per day with a 5% automatic inflation increase benefit. Now, she is receiving care in a private room in an excellent nursing facility. The facility charges $420 per day for care, less than the $454 benefit daily benefit of the policy. The policy covers ALL the cost of her care.
Of course, that is an anecdotal example. Some policies have not kept up with the cost of care, especially those without inflation riders. Fortunately, however, many of the dire, scary predictions during the early 90s related to the cost and availability of care haven't come true. Although stressed by the pandemic, there is currently a strong infrastructure of home care, assisted living and skilled nursing facilities. People pay for care using their LTC policies, riders on life policies, or retirement savings.
Topics: Long-Term Care Research/Trends Long-Term Care Insurance Limited & Extended Care Planning Center
6 min read
How to Protect Your LTC Plan From Future Inflation
Significant inflation - something that the majority of Americans have not seen in their lifetime - has been a primary news topic. From concerns about exploding national debt and high government spending levels to an expanding post-pandemic economy, many people are concerned about sustained inflation and decreased purchasing power. Or, as many economists are assuring us, this could be a short-term event as the economy bounces back from the pandemic. Nobody knows!
Topics: Long-Term Care Long-Term Care Insurance
6 min read
Why Single Pay LTC Insurance Might be the Right Strategy Now
The recent stock market run (especially in tech stocks) has been amazing. Despite the high unemployment rate, many investors are enjoying that feeling of increased net worth in both their qualified and non-qualified money.
Topics: Long-Term Care Life Insurance & Annuities Planning in Advance
6 min read
How low interest rates are changing LTC Insurance products
The last several years have seen major changes in LTC Insurance - leading to what can be referred to as LTC 2.0. LTC 2.0 means that while the pure protection of traditional LTC insurance is still a popular option, there has been an accompanying growth in Hybrid LTC + Life plans - both in number of policies sold and number of carriers offering these plans.
Topics: Long-Term Care Life Insurance & Annuities Planning in Advance
6 min read
Why the Traditional LTC Market is here to stay - and will grow
Recently I received an email from a Insurance Carrier who sells Linked Life/LTC plans with the headline "What happened to traditional LTC?". The email started by saying "It wasn't so long age that traditional long-term care (LTC) insurance dominated the market, but now they are barely holding on while linked-benefit products are taking over." Harsh!
Topics: Long-Term Care Advanced Planning
5 min read
The biggest mistakes people make when choosing to self-insure for LTC
For Financial Professionals that are savvy enough to have a discussion about the impact of a long-term care event one of the most important topics is whether a client should consider long-term care insurance or should instead "self-insure".
Topics: Long-Term Care Life Insurance & Annuities
3 min read
New Premiums Increasing on Hybrid Life + LTCI Plans
Many clients find that the best way for them to plan for LTC is by purchasing a linked life/ltc plan. Compared to traditional LTC policies which provide pure long-term care protection (and the most LTC protection per premium dollar) linked Life/LTC trade off some of that leverage to provide guaranteed premiums and a life insurance benefit.
Topics: Life Insurance & Annuities Planning in Advance Limited & Extended Care Planning Center
7 min read
The worst case scenario - is lifetime LTC Insurance worth it?
Luckily, you aren't going to need years and years of high cost long-term care. But what if you did?
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