NAILBA Perspectives Spring 2019 - Page 18

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