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LTC Insurance: Critical Safety Net For Women Execs, Business Owners

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It’s now been more than 30 years since women entered the U.S. work force in significant numbers (which had happened before) and with long-term, professional aspirations (which had not). Their resulting prevalence and success in nearly every occupational sector has had a profound effect on the U.S. economy.

Yet, even with these remarkable gains over a single generation in their professional lives, women still find themselves shouldering a disproportionate share of caregiving responsibilities, not only for the children they may have delayed having but also for parents–and even in-laws–who are starting to face long-term custodial care issues in record numbers.

Although media reports have focused on tales of young, multi-degreed women opting out of the work force at the start of their careers to stay at home with children, less attention has been given to what some social commentators are calling “the last glass ceiling”: stories of women who are corporate officers, successful entrepreneurs and even high-level government officials feeling obligated to halt their careers, often permanently, to care for aging elders.

Recently, Justice Sandra Day O’Connor, the first woman appointed to the U.S. Supreme Court, retired. O’Connor, 75, said she was retiring to spend more time with her husband, who is suffering from the early stages of Alzheimer’s disease.

Many successful women–and successful men–will choose to modify their schedules so they can spend time with aging loved ones. But if women in particular feel as if they must give up work outside the home simply to provide decent, basic care for loved ones at a cost that the family can afford, that trend will surely affect the ability of the U.S. economy to grow and prosper.

The good news is that each of you selling long term care insurance has the ability to educate your professional women clients about this critical safety net product.

Here are some points to keep in mind.

Recognize that women are both primary caregivers and decision-makers.

In a business setting, it may be tempting to focus primarily on the importance of LTC insurance in preserving your client’s financial future. Certainly, any successful professional woman who’s been diligent about planning for her own retirement will be able to frame the discussion in terms of defraying an LTC cost that may destroy the plan she has worked so hard to build.

However, it’s important to acknowledge and address the emotional–as well as financial–burden that individuals and families face when loved ones require custodial care. Already, nearly three-fourths of informal (unpaid) providers of senior care are women, according to a 2001 report by the Older Women’s League, Washington, D.C. The typical informal caregiver is a 40-something female who is employed full time and spends 18 hours per week on caregiving. That’s an enormous toll on the caregiver and her family members–immediate and extended–no matter how adept she may be at multi-tasking.

Therefore, it may be helpful to talk about LTC insurance being a safety net for quality of family life as well as a financial safety net.

Bring up the age issue.

Custom used to dictate that a lady never admitted her age. In discussing the best time to purchase LTC insurance, a woman’s age has to be the starting point of the conversation.

For many women, purchasing LTC insurance at the same age when they are saving for their children’s education and their own retirement just isn’t financially feasible, especially given the relatively high cost of coverage.

In those cases, it’s important to counsel clients that, no matter where they may be in terms of paying for college, securing long term care protection should move to the top of the list by the time they are in their early fifties. The reasons for this are threefold:

–The premium will only get more expensive.

–The earlier in life a policy is purchased with an inflation rider, the greater the benefit will be.

–The older one gets, the harder it becomes to get underwritten for high-quality coverage.

Don’t be reluctant to get into the numbers.

There’s no getting around it: LTC insurance is not cheap. And, with successful women typically in charge of household finances as well as business finances, it’s essential to address the cost issue right away.

There’s a reason why LTC insurance costs so much, and you should be able to get at it by citing the average daily cost for home health care, assisted living or nursing homes in your part of the country. Of course, actual costs may be much higher for many affluent clients, because affluent clients who are used to living well will expect to receive high-quality care in a convenient setting. The cost of great care could prove to be considerably higher than the average cost of care.

Factor in the expectation that clients buying coverage for themselves may not file claims until the 2020s or 2030s, and the likelihood that LTC costs will continue to rise faster than the rate of inflation, and the financial prospect can seem overwhelming, even for an affluent client.

An important point to bring up is that an LTC insurance policy provides full value from the moment she purchases the policy. In addition, if appropriate for your client’s financial situation, you can point her to the limited pay options increasingly being offered by LTC insurance carriers. Purchasers of those policies pay a higher premium for a shorter period (say, over 10 years or by age 65) and need not carry that cost burden into retirement. Again, the younger a woman is when she initiates such an option, the lower the rate will be.

Finally, if a client is purchasing individual LTC coverage as an employee benefit, she may well be able to secure coverage for other family members–possibly even her parents, depending on underwriting–at the employer’s discounted rate.

Show how LTC insurance can be used to meet both business and personal objectives.

Just as LTC insurance continues to grow in importance as an employee benefit in the corporate workplace, your small business owner clients may not be aware that they can realize tax advantages by buying LTC insurance for themselves and their employees. Indeed, a business can deduct the full premium paid for long term care coverage on behalf of its employees and their spouses or dependents. This includes shareholder-employees of C corporations.

In addition, owners of limited liability companies, sole proprietorships and partnerships, and clients with more than 2% ownership of an S corporation, also can enjoy significant tax benefits on company-paid premiums for their own policies.

By providing LTC insurance for her employees–either fully or partly funded–your business owner client also may end up lowering staff turnover and increasing productivity.

Manage expectations about underwriting.

It’s important to remind your clients that, with so much riding on this policy (their financial and emotional well-being, not to mention their family’s), it is essential that it be particularly secure. If your client can make it through a thorough underwriting process–and, as I addressed above, the purchase age does factor into this–she should feel very secure about the long-term stability of the protection she’s purchased.

LTC Checklist

Points To Keep In Mind

Recognize that women are both primary caregivers and decision-makers.

Bring up the age issue.

Don’t be reluctant to get into the numbers.

Show how LTC insurance can be used to meet both business and personal objectives.

Manage expectations about underwriting.


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