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CPS Midwest Life LTC

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Myth: Long-Term Care Is Just For Nursing Homes

Originally, the primary reason LTC Insurance was created was because it would help cover the high costs of a nursing home. But over the years, the policies have changed dramatically.

Now LTC Insurance is a comprehensive product that helps cover the cost of a variety services.

Consider the real-life Long Term Care example of Joe
 
He had helped care for both his parents for many years. So, he decided to purchase LTCi to help protect his family from the same responsibilities that he had with his parents.
 
Later in life, Joe developed an advanced stage of diabetes and several health problems occurred, including blindness and the amputation of his leg. His LTCi policy helped him stay at home by paying for renovations to his home, including ramps and grab bars.
 
The care coordinator helped walk Joe and his wife through the types of care he needed and provided a referral list of care providers in the area. His wife was able to receive caregiver training and a home health care nurse visits during the day while his wife is at work. LTC Insurance helped Joe stay in his home and have the care he needs.
 
There are many reasons to obtain Long-Term Care coverage, that can benefit both your client and their family.
 
To learn more, contact your Long-Term Care Specialists today.
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Why Tax Season Is The Optimal Time To Discuss LTC Planning

Tax season is coming to an end – people all across the country are in the midst of preparing and filing their returns.
 
But did you know it’s also an opportune time to talk to your clients about the vital importance of Long-Term Care Insurance?

There are numerous tax-related benefits that come with LTCi.

For example, LTC Insurance premiums may be tax deductible. Clients may be eligible to receive deductions or credits on their state tax returns for paid LTC Insurance premiums.
 
Plus, tax refunds are a great way to pay into LTC Insurance premium payments. Doing so on an annual basis can make paying premiums a non-event.
 
LTC Insurance is often the missing piece in many financial plans – and tax preparation provides the opportunity for your clients to review their financial plans and identify any gaps in their coverage.
 
For more information on the potential tax benefits of LTC Insurance or for additional information contact your LTC Sales Rep.
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4 Ways LTC Insurance Provides Tax Advantages

When meeting with clients to discuss the benefit that a Long-Term Care (LTC) Insurance policy has on their overall financial plan, tax deductions might not be the first thing you emphasize, but should be one of your top five discussion points.

Taking the time to explain the tax advantages may provide the tipping point for clients who are hesitant about purchasing a policy.

Here are a few scenarios on how to approach each type of client:
 
The Client On The Fence
 
Many states offer a deduction or credit on paid LTC Insurance premiums, which can make purchasing coverage more attractive to your clients. For example, in the state of Ohio, residents are able to deduct the entire annual premium for their LTCI policies on their tax returns.
 
The Planner
 
If you are working with clients on their tax strategy, consider turning their tax refund into an LTC Insurance premium payment. It’s a great way to plan for the cost of the insurance and can make annual premium payments a non-event.
 
Business Owners
 
When a C-Corporation purchases a policy on behalf of its employees, and their spouses or dependents, the corporation is entitled to take 100% deduction as a business expense on the total premiums paid. If self-employed, clients can deduct 100% of their out-of-pocket LTC premiums up to the age-based Eligible Premium amounts*.
 
Current Policyholders
 
Clients who already have an LTC Insurance policy may not know about the tax deductions available to them. So during your annual review, be sure to educate them about a missed opportunity to take a tax deduction.
 
Contact your Long-Term Care Specialist today to learn more about the tax advantages of LTC Insurance.
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The A-B-C’s Of The Cash Benefit

Everyone knows what cash can do. Use this simple concept to demonstrate the value of purchasing a Long-Term Care policy that includes a built-in cash benefit.
 
Take out a piece of paper and write on it vertically: A, B, C.
 
A is for Assets
 
When the need for Long-Term Care first arises, many people worry they may not have assets available to pay for care they need. This is especially true for people who may have to liquidate assets like stocks, CDs or even property to pay for their care.
 
B is for Burden
 
Families typically step in to help a loved one who needs Long-Term Care. But that may be difficult for adult children who have their own family and career responsibilities. If your clients are like most people, the last thing they want to do is to become a burden to their family.
 
C is for Choices
 
A Long-Term Care Insurance policy that offers a cash benefit can help someone receive care in the comfort of their own home.
 
The cash can be used however its needed most. Whether it’s to pay for an airline ticket or a tank of gas so a child can help out or for housekeeping or meal delivery services.
 
With one of our strategic carrier providers, the cash is available to you on day one. That means when you become eligible for benefits under your policy, there’s no waiting period to qualify for cash. This is something you won’t find from other insurance companies.
 
In addition, should your client need a higher level of care someday, they always have the choice to switch from the cash benefit to a traditional reimbursement benefit, which reimburses for the actual Long-Term Care services expenses incurred.
 
For more information about this sales idea, contact your LTC Specialists today.
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Open the Door to Small Business Sales

Selling Long-Term Care Insurance to small business owners is not like the emotional roller coaster sale it is when selling to individuals. Business owners tend to look at this as a logical discussion of how you can help with their business finances.
 
Many are always looking for a way to save on taxes so a great way to open the door to an LTC sale would be, “If I could show you something that could help your business reduce its tax burden, would you be interested?”

All businesses can deduct LTC Insurance premiums paid using business dollars.

Depending on the tax structure of the business, the owner can either deduct the actual premium or eligible premium.  How?
 
Owners of C corporations can deduct the actual premium paid on a LTC Insurance policy for the owner / employee, spouse, dependents and a designated class of employees.
 
Self employed business owners such as sole proprietors, partnerships or LLCs can deduct the eligible premium paid for the owner, spouse and dependents. The eligible premium is established annually based on the medical care components of the Consumer Price Index.
 
This opportunity allows you to approach any type of small business because you are able to offer a money saving solution. Be sure to approach small business owners with a plan that provides essential LTC coverage and allows them to take advantage of federal tax incentives.
 
For more information about selling LTC to small business owners contact your LTC Specialist today.
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Why Family Should Not Be A Long-Term Care Plan

One reason why you need to bring up the topic of Long-Term Care with your clients: family.
 
Past history has shown us that parents who do not plan adequately for their long-term care needs ultimately end up sacrificing their income, assets and financial promises that they have made to pay for their care.
 
Since we are on the topic of history, it is also proven that if a parent does not have a proper plan in place, their family becomes their long-term care plan.

Parents must consider the potential physical, emotional and financial damage that is also done to the family members who are personally involved in delivering their long-term care.

There are a myriad of issues to consider when a family gets involved in their parent’s long-term care plan.
 
Among them:
  • Time Management
  • Geography
  • Funding
Think about how pressed for time your children already are – balancing families, careers and child activities.
 
Ponder also the challenges that could ensue from a care giving perspective geographically speaking if they do not all live in the same city. Then there are funding issues to consider as well, because someone has to pay for the care.
 
Further, multiple polls have taught us that most children do not want to take care of their parents, but when faced with these circumstances – they can and almost always do care for their parents… even if their relationship is not strong with them.
 
Long-Term Care and the challenges associated with it can often require more and more of family members’ involvement as time passes
 
The collateral damage that can be associated with being directly involved in a family member’s long-term care plan can often involve irreversible damage to relationships within the caregivers, and there can also be profound resentment toward the folks that the care is being delivered to.
 
Keep in mind also the opportunity costs that your family could be experiencing as it relates to their career, children, church or synagogue because the time that is usually allocated to these aforementioned items has now been allocated to you.
 
There are a variety of ways available to possibly remove this potential burden from your family.
 
Talk to your LTCi Sales & Marketing Associate today to learn more.
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Cross Selling Long-Term Care Insurance

There are numerous people you know that need Long-Term Care (LTC) Insurance, many of them include your current clients. Perhaps you have already sold them a Life Insurance Policy, yet how do you get them interested in LTC?

Cross Selling can be difficult, yet when you present your client with information about LTC, they should understand the benefit of protecting themselves when they may need it.

Begin by talking about the consequences of living a long life will have on their family – and offer to put together a plan to protect them from the biggest risk they face after retirement – one that must be protected with Long-Term Care Insurance.
 
Once the conversation is going, a few good questions to ask include:
  • What percentage of your retirement assets have you set aside to pay for Long-Term Care services?
  • Are you concerned about the impact a chronic illness would have on your retirement savings?
  • If it were necessary to increase your spending by $3,000 or $4,000 a month to pay for LTC services, would that concern you?
To learn more about incorporating Long-Term Care into your product portfolio, or if you need more prospecting tips, contact your LTC Specialists today!
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Help Clients Hedge Their Risk

Highlighting the cost of care can be a powerful, yet non-threatening way to engage clients in a Long-Term Care (LTC) planning discussion. It also can provide a convenient starting point for designing a policy that will meet your client’s needs and budget.

Since the future estimated average cost for multiple years of care can be quite high, it’s important that both you and your client don’t view LTC Insurance coverage as an all-or-nothing proposition.

Highlight The Cost Of Care
 
First, discuss with your clients where they would like to receive care should a Long-Term Care event arise. Based on their response, show them what the estimated cost of three or more years of care is today and in the future.
 
We can help you and your client explore the cost of care, including:
  • Current costs for Long-Term Care for all areas across the country
  • Estimated costs for LTC events lasting 1-10 years
  • Projected future costs for Long-Term Care based on inflation
Develop a Strategy
 
Once your clients have seen the financial impact that a long-term event can have on their assets, help them develop a strategy to insure some or all of the risk. Base your plan design on what you know about your client’s financial goals, and adjust your recommendations based on their budget concerns.
 
Some clients may be willing to insure part of the risk by paying a portion of their future expenses out of pocket. Others may prefer to protect all of their assets, to ensure a spouse/partner’s financial well being or to leave a legacy to their children. In either case, LTC Insurance can provide a significant level of protection.
 
Manage the Premium
 
You have a surprising amount of flexibility when designing an LTC Insurance policy. If you start with a policy that accounts for your client’s total estimated future cost of care, be sure to consider alternate plan designs that help to lower the premium, if needed.
 
Consider this approach:
 
If you started with a longer benefit period and compound inflation, consider shortening to 3-5 years to save money, while still providing ample coverage for most care needs. Leaving off compound inflation protection can make a big impact, potentially cutting the premium in half. With this strategy, consider a higher initial daily benefit to account for future cost of care increases.
 
Become a Resource
 
Become a “cost of care” expert in your community. Leverage us as a point of reference in your prospecting efforts. After seeing the potential impact that an LTC event can have on their assets, your clients may feel compelled to protect their future with LTC Insurance.
 
Contact your LTC Associate today for more information and resources.
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How To Dial Down Premium To Make An LTCi Policy More Affordable

The Situation
 
Your client understands the need for Long-Term Care Insurance (LTCi), but feels the premium is too costly – they want the policy, but can’t afford the premium.
 
The Sales Solution
 
With all the options available on LTCi products, you can help your client “dial down” the premium to fit their budget. After all, some Long-Term Care Insurance is better than none.
 
You can dial down premium in a number of ways:
  • Adjust the inflation protection option.
  • Reduce the monthly benefit amount.
  • Reduce the maximum monthly benefit amount for assisted living.
  • Adjust the benefit period.
  • Adjust the elimination period.
Here’s how it works:
 
If you’re making a partnership qualified sale, the inflation protection option must meet state requirements based on the client’s age at application. In this case, you may not be able to adjust the inflation protection option and may have to adjust the monthly benefit amount instead in order to reduce the premium.

If inflation protection is not a factor, look at using an inflation protection option other than 5% lifetime. You might consider the 5% 20-year option, which provides a compounding benefit increase for the first 20 years of the policy. You also could use a 3% or 4% lifetime option or the 5% simple option.
 
If your client feels they may not need the maximum monthly benefit for assisted living facility, they have the option to reduce that benefit by as much as 50%.
 
You also can help the client select from seven different benefit periods and six different elimination periods to help reduce the cost of the policy.
 
Your Competitive Advantage
 
Having the ability to show your client various benefit combinations allows you to tailor a policy that meets their needs while staying within their budget. And that gives you a competitive advantage in the LTCi marketplace.
 
For more information contact your LTC Specialist today.
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Are Your Clients Prepared for Rising LTC Costs?

Over the years, we’ve observed significant trends in the long-term care market. While the cost of care among all providers has increased, facility-based care has grown at a much greater rate than home care.

If you live to 65, there is a 70% chance you will need some form of long-term care services, making it vital to create a sound financial plan for managing future costs.

Current Costs of Long-Term Care

The majority of claims are paid out for home care or assisted living facilities, which typically cost much less than nursing homes.

  • Home Health Care Aide: The national median hourly rate for a home health care aide in 2023 was $33.
  • Assisted Living Facilities: The national median annual cost for an assisted living facility in 2023 was $64,200.
  • Nursing Home: The national median annual cost for a private room in a nursing home in 2023 was $116,800.
Projected Future Costs

As these costs continue to rise, your clients’ assets are at greater risk. Considering the average three-year claim, in 25 years, with a 3% annual inflation rate, the average claim for a private room in a nursing home will reach approximately $240,000 annually, totaling around $720,000 over three years.

Planning for Long-Term Care

Given these rising costs, it’s essential to plan ahead. In 2023, long-term care insurance firms paid out a record $14.1 billion in claims. 

However, only 3% to 4% of Americans aged 50 and older are paying for long-term care policies.

Considering long-term care insurance can be a prudent step in protecting your clients’ assets and ensuring their families are not burdened with these expenses.

Contact your LTC Specialist for assistance with your cases today.

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