With more than 8.1 million Americans protected by long-term care insurance coverage, there is no doubt it’s a product that appeals to baby boomers who don’t want to end up in a nursing home or be dependent on others. However, it’s not a fit for everyone. For example, most young married men would be better off focusing on building a nest egg and buying life insurance protection.
Just like individuals, not all businesses are ideal candidates to offer long-term care insurance either. A company with a significant amount of turnover, a low wage base, poor participation in other benefit programs or a large young male population is a good indicator that LTC Insurance is not a benefit that will be popular.
However, many groups are excellent candidates for LTC Insurance. Here are some examples of the types of groups benefitting from an LTC offering:
1) Currently offering LTC coverage or have offered coverage in the past. At first, this might seem counter-intuitive. Why would companies that already have LTC programs be good candidates? The reason is simple —many of the group carriers that have sold programs in the past are no longer taking new business. Because of that, there is an opportunity to offer the latest multi-life products, individual products designed for the worksite with group discounts and a simpler enrollment process, including e-applications. The benefit of these new multi-life plans is that the contract is between the insurance carrier and the employee, with the employer facilitating the sale. That means easy portability and the ability to introduce new product offerings as they become available.
2) Companies that have strong 401(k) participation. The biggest threat to any retirement plan is a long-term care event such as Alzheimer’s. Employers who have established and promoted 401(k) plans would be eager to learn about a program that can help protect those plans and the retirement income they provide. LTC insurance, for a small annual cost based on the current 401(k) balance, protects that plan and may give employees the confidence to invest in a higher risk/return portfolio.
3) Tax advantages. LTC Insurance offers companies a myriad of tax-favored options. For one thing, benefits from tax-qualified plans are not taxable if they are paying for LTC services. Secondly, employees with Health Savings Accounts can pay premiums from their HSA’s on a pre-tax basis. Finally, C-Corporations can pay premiums for key groups of executives and fully deduct the premiums.
Knowing which employers will be receptive to LTC Insurance takes experience and knowledge. A good way to get started is to partner with those already experienced in working with LTC in employer settings. With time, many benefit advisors have found LTC insurance to be a rewarding and profitable addition to their capabilities.
Riekse Jr., CEBS, ChFC is managing principal at LTCI Partners, a brokerage general agency specializing in long-term care insurance. Email him at firstname.lastname@example.org.
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