Limited and Extended Care Planning Collective

Designing the basic benefits of a long-term care insurance plan, whether it is a traditional standalone policy or a hybrid life/LTC plan, is relatively straightforward: Choose an initial monthly benefit. Decide whether you want that benefit to grow over time through inflation protection. Then determine whether having a death benefit or cash value is important if long-term care is never needed.

For decades, retirement planning has centered around a familiar set of questions:

• How much have you saved?
• Will your portfolio generate enough income?
• What rate of return do you need?
• When should you claim Social Security?

These are important questions. But there's another one that often gets overlooked:

What happens if retirement lasts longer, costs more, and includes a long-term care event?

Recently an advisor brought to us an opportunity to help someone plan for long-term care. Like many purchasers, this was someone who had personal experience - a 50 year old single man who was overseeing the care of his Mom with Alzheimer's. He is self-employed, lives in Illinois and has an annual income of about $150,000. We presented the advisor with two options for their client - a traditional policy and a linked-benefit life/LTC plan.

Something strange happened to me recently - I told a friend who received an in-force rate notice to let their LTC policy lapse and to purchase a new plan.

Why is this strange? Because 99% of the time my recommendation would be to pay the increased premium level. I would explain that, in general, premiums for new policies are almost always higher than existing plans, even with rate increases.

Have you heard of the Washington Cares Fund?  If you haven't, it's the first state run and funded  Long-Term Services & Supports program. Originally signed in 2019 by Governor Jay Inslee, as of  January 1st, 2025, Washington State Residents who need long-term care may be able to claim benefits (based on needing help with 3 of 10 ADLs) from the state and receive a benefit of up to $100 per day up to a maximum benefit of $36,500. Undoubtedly  for many families these benefits are going to welcomed and helpful.  But, of course, someone has to pay for the program.