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Securing your client's retirement future from the cost of long-term care - Part II

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In addition to not wanting to be a burden on their family, a key reason people buy long-term care insurance is the freedom of choice as to where and how care will be provided. And, the only way to ensure this freedom is to make provisions for a steady source of funding available through LTCI.

Once a client understands the biggest threat to his or her retirement savings is a long-term care episode, you can help design an affordable plan within your client’s budget. A good rule of thumb is to keep premiums below five percent of the annual income, including spousal premiums. For example, someone with a $50,000 annual income probably shouldn’t pay more than $2,500 in annual premiums.

Here are some additional tips for creating a program that stays within the ideal premium range:

1. Check if your state offers partnership programs, which are expanding in popularity. (Visit for up-to-date information.) If your state offers partnership plans, you can save premium dollars by purchasing less than unlimited benefits. If someone exhausts those benefits, in a worst-case situation, the state will pay for Medicaid LTCI and the amount paid out in benefits won’t be counted when applying for Medicaid.

2. Look at newer inflation options. Many carriers now offer various inflation options in addition to the traditional 5 percent compound. Several companies now offer options such as a 3 percent compound, CPI inflation option and future purchase options.

3. Discuss the benefit in terms of total dollars available, not years. Savvy carriers are starting to explain benefits in terms of total dollars available for care instead of years of care. People would rather have $500,000 worth of protection that inflates each year than “six years of nursing home care.”

Yes, the future is uncertain. But isn’t it always? Securing long-term care insurance can help alleviate one uncertainty – the unexpected expense of long-term care.

Click here to read more from Tom Riekse about selling long-term care insurance to your clients.

Tom Riekse, Jr., CEBS is a managing principal at LTCI Partners LLC, Libertyville, Ill. For more information, visit or call 800.245.8108.


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