LONG-TERM CARE
Myths & facts of LTC protection
When it comes to LTC
protection, know the
myths, master the
facts, and have the
conversation.
Retirement readiness risks come in all shapes and sizes, and few looms larger than the
potential cost of long-term care (LTC). Most financial professionals understand the magnitude
of this risk; however, preparing clients to address LTC costs often means overcoming a set of
well-entrenched myths. Understanding some common myths in advance and becoming well-
versed in the facts can change the course of the conversation. And most importantly, it can
help create a stronger retirement strategy for clients at a range of income levels.
MYTH: “My health insurance provides all the protection I need for LTC.”
FACT: Health insurance and LTC protection are not interchangeable. Health insurance helps
cover the cost of medical care, while LTC benefits help pay for other potentially costly
services, including help with eating, bathing and getting dressed — needs that generally
grow over time.
MYTH: “I can rely on a government program to take care of me.”
FACT: Government programs are limited by financial resources and availability. It can be
difficult to qualify for government programs, and each program carries specific rules and
requirements for covered services.
MYTH: “I can save the money I’ll need for LTC.”
FACT: Paying LTC expenses out-of-pocket can wipe out a lifetime of savings. Today, the average
cost for a private nursing home room is $7,698 per month ($92,376 annually). 1 At that rate,
savings of $500,000 would be depleted in just a few years. And 20 percent of Americans
aged 65 or older will require LTC services for longer than five years. 2
Tracey Edgar, RN, BSN, CLTC, is vice
president of sales, Care Solutions, for
the companies of OneAmerica. She
formerly led brokerage sales for the
OneAmerica Care Solutions suite of
asset-based long-term care products.
An industry veteran, Edgar has been
helping brokerage general agencies
for 20 years. She can be reached at
[email protected].
MYTH: “LTC protection is too expensive.”
FACT: There are many combinations of LTC protection features and payment options that may
work with a range of financial situations. Standalone LTC policies typically are funded like
other insurance policies, with monthly or annual premiums that may be subject to periodic
increases. Asset-based protection can provide a healthy mix of funding options — including a
single lump-sum premium or options to pay level premiums over a period of 10 to 20 years.
Start the Conversation
From a wealth management perspective, it’s important to remember that LTC protection
doesn’t exist to make clients rich. It exists to keep them from becoming poor. That makes it
an important element of any well-rounded retirement income strategy and certainly a topic
worth discussing.
OneAmerica® is the marketing name for the companies of OneAmerica. Products issued and underwritten by The
State Life Insurance Company® (State Life), Indianapolis, IN, a OneAmerica company that offers the Care Solutions
product suite. Provided content is for overview and informational purposes only and is not intended as tax, legal,
fiduciary, or investment advice.
Footnotes:
1 “Costs of Care.” longtermcare.acl.gov/costs-how-to-pay/costs-of-care.html, obtained on 4/15/19.
2 “How Much Care Will You Need?” longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html,
18
Perspectives
Q2 2019
High Limit Disability
Individuals annually earning in excess of $500,000 need disability
benefi ts that can keep pace with their affl uent lifestyle - they
need High Limit Disability. The benefi ts of a recently-insured
surgeon, making $1,100,000 consisted of:
⌂ $10,000/month Group LTD
⌂ $15,000/month Individual DI
⌂ $32,000/month High Limit DI
Call (800) 345-8816 or visit www.piu.org for more informati on.
Occupati on: Surgeon
Age: 51
Income: $1,100,000
Total Benefi t: $57,000/month