Let’s admit it: Long-term care insurance (LTCI) has been a popular item in America for about 20 years. Rightfully so. The need for LTCI is great and becoming ever more apparent.
But, unfortunately, while America’s emphasis has been on LTCI, a product exists that has been sadly overlooked: Short-term care insurance (STCI).
Now the secret is getting out.
Why has it been overlooked? The answer is quite simple. Very few agents know about STCI. And, second, if so few agents are aware the product exists, how can the public be expected to know about it?
Why has a product that can satisfy the needs of millions of Americans gone unknown, overlooked, and mostly ignored?
- Many agents are not clear about the distinction between short-term care insurance and short-term health insurance—major medical health policies designed to cover people between jobs, in college, or waiting to find a new job.
- Only seven companies that I know of offer the product. Pretty scarce pickins’ for a 100 million prospects.
- Some state insurance departments (17) do not yet recognize STCI, because their efforts have been directed to long-term care insurance—tax-qualified policies, LTCI agent education and continuing education, and introducing (in most states now) the fairly new LTCI Partnership programs.
The states that have not yet recognized the existence of STCI may not understand how well the product would serve the needs of many of their people, if the people just knew what the product even exists. What a shame. That has to change
I don’t mean to create a discussion about LTCI and the turmoil currently surrounding the industry. If you have been involved in selling LTCI, you are aware that the problems in that market are no secret. That is unfortunate, and I wish it were not so. But, it is.
“We can’t afford LTCI!”
The most common phrase LTCI producers encounter is the “We just can’t afford it,” statement.
Whether or not the prospect can or can’t afford LTCI, or whether the prospect just chooses not to buy, is a genuine factor.
With that statement, neither the agent nor the prospect is satisfied. The agent goes without a sale, and the prospect goes without any coverage at all. Many times, the prospect is left feeling that the only alternative is to wait and try to qualify for Medicaid.
Possible sales don’t have to unravel that way.
We could ask, “What if there was kind of more affordable short-term care insurance?”
Well, there is. The product exists, and has for 20 years, but only a few of the 100 million people who could benefit from it are even aware of it.
Whose fault is that, and why has STCI been such a “secret”? It’s our fault.
State insurance departments that overlook and deny the existence and value of STCI; insurance companies that have the product and do not create a major marketing campaign to alert agents and clients alike as to the value of the product; insurance companies that have not yet recognized the need to include the product in their product portfolio; and agents who haven’t kept up with the times and aren’t aware of STCI.
In regard to the last admonition, it begs the question, “How could they be aware of STCI?” If the American insurance landscape has not made an honest effort to educate agents, how could they possibly be able to educate the public?
Well, then, let’s help clear the problem for you and your prospects.
Short-term care insurance, basically, is designed to cover nursing home costs, at any level of care, for less than a year. Some companies will include assisted living facility benefits in their policy, and some will offer home health care by rider.