Does it EVER make sense to self-insure?
By Alan Friedman
Question: Does it make sense for your clients to self-insure?
In our opinion, NEVER!
By self-insuring their long term care risks, your clients are exposed to the full financial impact of any potential LTC need. A better approach is to transfer that risk to an insurance company.
Did you know?
Someone turning 65 has almost a 70 percent chance of needing some type of long-term care services and support in their remaining years.
Only 10 percent of Americans over the age of 65 have long-term care insurance. In other words, 90 percent of Americans do not!
Seventy percent of care takes place at home and the national median cost of home care is $30 per hour.
Assuming that an individual needs four hours of care per day, that comes to $43,800 per year or $3,650 per month. (This does not include inflation or an annual increase in the hourly cost. And it is just for home care.)
With NO INSURANCE: Total out-of-pocket cost over 5 years = $219,000
Case Study:
Female, Preferred-Non-Smoker, age 55
Purchased a hybrid LTC policy
Five-year benefit period
Three percent compound inflation protection
Starting monthly LTC benefit: $3,650
Monthly benefit at age 80: $7,640
10 pay premium: $12,129.94. (Total cost over 10 years: $121,299.40)
Single pay premium: $105,144.27
SAVINGS for the client = $97,700 (10-pay design) or $113,855.73 (one-pay design)
REMEMBER: LTC insurance is an effective way to optimize financial resources, safeguard assets, and mitigate potential costs associated with long-term care events.
It provides:
Asset Protection
Risk Mitigation
Peace of Mind
Tax Advantages
Access to Quality Care
Today’s insurance market offers a variety of Long Term Care products including Traditional LTC, Hybrid Products and Universal Life with LTC riders. Which is best will depend on the needs and objects of each individual client.
Let us help you design a tailor made, comprehensive Long Term Care Plan, for you clients today!