LONG TERM CARE
Accessibility, flexibility,
dependability and certainty
70 percent of those
over the age of 65
will experience an
extended period of
long-term care. In a
down economy, that
protection is more
important than ever.
Jeff Levin, OneAmerica Care
Solutions Divisional Vice President,
is responsible for advancing growth
of the Care Solutions product line
including life and annuity asset based
long term care products. He leads a
team of Care Solutions regional sales
directors and supports key business
relationships.
30
Perspectives
Q2 2020
At the time of this writing, we are facing unprecedented times. Within the past few weeks,
our country, in fact the entire world, is facing a pandemic with the COVID-19 virus. We are
dealing with self-imposed quarantines; our kids are out of school for unknown periods of time;
restaurants and bars are closing; grocery stores are rationing the purchase of normal, everyday
needs; professional sports teams and major events are canceled and postponed; and we are
“social distancing.” Additionally, Russia and the oil producing countries have gotten into a spat
and that is impacting the oil markets. All of this, along with fear and uncertainty, has taken a
major toll on the financial markets with the Dow Jones being down significantly. This means
our savings, retirement, investment portfolios, and “rainy day” funds have taken a major hit
and are substantially lower than they were a few weeks ago.
Unforeseen impact
At this point, you’re probably asking yourself what any of this has to do with long term care
planning. The fact is, none of us can individually stop the pandemic, control tensions that arise
internationally, or control the markets. These are all unforeseen events. We can, however, plan
for an event that almost 70 percent of those over the age of 65 will experience: that event is
an extended period of long-term care. In a down economy, that protection is more important
than ever.
While a myriad of options is available today, asset-based long term care (LTC) is dramatically
outpacing all other solutions. The concept behind asset-based LTC is to reposition or leverage
an existing asset that is no longer serving its original purpose and to fund whole life insurance
or annuity contracts to provide clients with options on how to fund their LTC protection, often
with tax advantages. As an example, an “old” life insurance policy that has built up cash value
could be repositioned to provide coverage for a qualifying LTC care event, as well as provide
a death benefit if care isn’t needed. Additionally, by adding a return of premium option,
the policyholder can always have access to their funds. This can create an LTC plan that is
accessible, flexible, and dependable. It also eliminates the concern and question of “what if I
never need LTC.”
Avoiding the “rainy day fund”
Without some type of protection, many individuals will pay for care out of their pocket. They
may have to use investments, savings, or dip into a “rainy day fund” to help pay for care. With
the recent impact to the markets, many of our savings vehicles have gone down in value, and
money that was set aside for a “rainy day” well, it’s pouring outside. Facing an LTC care event
for a spouse or family member is daunting enough. It’s perhaps worse knowing that those
funds are now a fraction of their original value.