Planning is bringing the future into the present so that you can do something about it now.
– Alan Lakein
As a society, we plan for many aspects of life, including those beyond our control. Oftentimes, we look to history as a guide for planning, and we learn the consequences of failing to plan. Trusted advisors play a crucial role in guiding clients through this process. As their advisor, you are in a unique position to encourage your clients to plan for their long-term care and consider transferring their risk to an insurance company. This is an often-overlooked piece of your client’s retirement plan that can leave them exposed to the high cost of extended care. That’s why it’s vital that you introduce long-term care planning to your client sooner rather than later. In fact, the recommended age target for long-term care insurance is between age 45 and 65 years old.
Read More: Who Is a Good Candidate for LTCI?
1. Health
Your client’s health can change at any time. Plus, your client has a better chance of insurability and health discounts at a young age. The average LTCI declination rate for an applicant under age 65 is approximately 20%, but this probability increases steadily with your client’s age. In fact, applicants over 70 years old are seeing a 50% or greater decline rate.
2. Genetic Testing
Medical advancements occur daily, with genetic testing now available for various health conditions like Huntington’s disease, cancer, dementia, and more. Although the underwriting guidelines are not clear across LTCI carriers, these results may affect the insurability of your otherwise healthy clients.
3. Cost and Maximizing Benefit Dollars
| Age 45/Couple | Age 55/Couple | Age 65/Couple | |
|---|---|---|---|
| Rating | Preferred Discount/Both | Select Rating/Both | Select Rating/Both |
| Monthly Benefit | $3,000/month | $3,000/month | $3,000/month |
| Maximum Lifetime Benefit | $110,000 total benefit | $110,000 total benefit | $110,000 total benefit |
| Inflation Protection | 3% Compound Inflation | 3% Compound Inflation | 3% Compound Inflation |
| Monthly Premium | $207.74/month, Both | $301.99/month, Both | $428.23/month, Both |
Policy Benefits at Age 80
| Age 45/Couple | Age 55/Couple | Age 65/Couple | |
|---|---|---|---|
| Monthly Benefit | $8,442/month | $6,281/month | $4,674/month |
| Maximum Lifetime Benefit | $309,525 total benefit | $230,316 total benefit | $171,373 total benefit |
| Total Premium Paid to Age 80 | $87,254.30 | $90,597 | $77,081.40 |
If you are looking for ways to start the long-term care planning conversation with your clients, schedule a call with us today.
