Popular LTCi Products - Part 4

You can access all of the LTC planning tools shown in this article with a 30-day free trial to the Buddy System. Sign up here: https://app.buddyins.com/signup

"Information is liberating." - Kofi Annan

Welcome to another special edition of LTC Insurance Community News. This is part 4 in a multi-part series where we will be covering popular types of LTC insurance solutions including:

• Part 1: Traditional LTCi

• Part 2: Individual Life Hybrid with LTCi Extension

• Part 3: Group Life with LTCi

• Part 4: Short Term Care Insurance

• Part 5: Annuity Hybrid with LTCi Extension

• Part 6: Life Hybrid with LTCi Acceleration

Okay, although this issue deals with short-term care, as you will see, it can be used as a long-term care planning tool. LTC funding solutions continue to evolve to meet ever changing client and carrier needs.

Part 4: Short Term Care Insurance

Short term care insurance (STCi) is a great alternative to a long-term care funding solution to help provide professional care in a time of crisis and gives families some breathing room from caregiving.

Other Uses for STCi

• Supplement existing LTCi or hybrid coverage

• Cover the deductible of other policies

Carrier specific product details can be found in The Buddy System.

The Unique Qualities of Short-Term Care

Short-term care products can provide up to one year of coverage often without an elimination period deductible for either facility care, home care, or both.

STC products have been approved by regulators in over 40 states, but are not approved at this time in CA, NY, CT, FL, MA, MN, NH, and VT. STC offers features, premium structures, and future rate stability that can vary by product or by state.

The popularity of STC among LTC specialists has been as an alternative to long-term care for individuals who have significant health issues but are looking for more affordable premiums. Even limited benefits can help a family during a stressful time and allow them more flexibility to address the longer-term needs.

Important: STC insurance offers a reasonable pay-as-you-go price point, but as a product with less actuarial experience, may be subject to future rate increases depending on future claims data.

📖 Case Story: Emily, a 65-year-old retired teacher, lived an active and independent life. She enjoyed gardening, volunteering at the local library, and spending time with her grandchildren. However, a sudden fall resulted in a hip fracture, requiring surgery and a lengthy recovery period. Emily's daughter, Sarah, lived in another state and couldn't provide the daily care Emily needed during her recovery.

The Challenge

Emily faced the challenge of needing short-term care to assist with her daily activities, such as bathing, dressing, and physical therapy. Without immediate family nearby, she was concerned about the cost of hiring professional caregivers and the potential financial strain it could place on her savings.

🤔 STC Funding Solution

Fortunately, Emily had purchased a short-term care insurance policy a few years earlier. This policy was designed to cover temporary care needs, providing benefits for up to 12 months. The policy included coverage for home health care, assisted living, and nursing home care, giving Emily the flexibility to choose the type of care that best suited her needs.

• At age 60, Emily chose short-term care insurance

• The annual premium is $1,996 – an amount she was comfortable with over the long term

• Her monthly benefit at age 65 was $4,800

• Her total max benefit was $206,400

🤑 Value Proposition: Short-Term Care Insurance

Implementation

After her surgery, Emily's short-term care insurance policy kicked in. She opted for home health care, allowing her to recover in the comfort of her own home. The insurance covered the cost of a professional caregiver who assisted with her daily activities and physical therapy sessions. This support was crucial in helping Emily regain her strength and independence.

Outcome

With the help of her short-term care insurance, Emily was able to focus on her recovery without worrying about the financial burden. The professional care she received at home not only sped up her recovery but also provided peace of mind for her and her family. Within six months, Emily was back on her feet, enjoying her garden and volunteering again.

Emily's experience highlights the importance of planning for unexpected health events. Short-term care insurance provided her with the necessary support during a challenging time, ensuring she could recover comfortably and without financial stress. This case study demonstrates how short-term care insurance can be a valuable safety net for individuals facing temporary care needs.

Short-Term Care Breakdown

🍭 Sweet Spots:

• More lenient underwriting for less healthy clients.

• No height/weight question for underwriting. Good for very overweight clients.

• May offer simple inflation protection, which is generally rare for STC products.

• Allows first day access to cash benefits.

• Some products offer 10% spousal discount (must be married and living together).

• Built in Rx reimbursement.

• Includes hospice benefits covering home and facility.

• Highly affordable, even with inflation protection rider included.

• Maximum Lifetime Benefit feature allows the policy to be used episodically over one period of time.

🧪 Sample Products:

• Aetna Recovery Care (Age 50-89)

• Manhattan Life OmniFlex STC (Age 45-89)

• GTL (Age 35-84)

⏭️ Up Next: Part 5: Annuity Hybrid with LTCi Extension

You can access all of the LTC planning tools shown in this article with a 30-day free trial to the Buddy System. Sign up here to design your own plans or review the products in detail: https://app.buddyins.com/signup