Do you have clients who are asking you questions about the benefits and policy differences of long-term care insurance? Are you looking for a handy resource that can help you explain the different plans that are available to them? Look no further.

The purpose of long-term care insurance is to pay for the services that include personal and custodial care in a variety of settings such as at-home, adult day-care, assisted living and nursing facilities—because private health insurance and Medicare doesn’t pay for these types of expenses.

Keep in mind that about 70% of people turning age 65 will need long-term care services at some point in their lives as per the U.S. Department of Health and Human Services.

The average cost per day at a nursing home per regions:
(Based on statistics from the New York State Department of Financial Services)

Central Region                  $357                       Northeastern                    $384

Long Island                         $455                       Western-Buffalo              $363

New York City                    $429                       Western-Rochester        $428

Northern Metropolitan $434 (north of Bronx -south of Dutchess, Ulster and Sullivan counties)

By comparison, the cost of home-care services currently is $ 21 per hour.

LTC products available in New York state

Traditional LTCI (LTC coverage only)

This type of coverage is the most cost-effective way to protect against risk. Policies do not build cash value and generally they do not provide a death benefit.

Premium: Least expensive annual premium, but it can increase.

If your client needs LTC: Policy provides a daily/monthly benefit for the benefit period chosen.

What happens if client doesn’t use the LTC benefit? No benefit other than the LTC insurance.

Are the benefits tax free? Yes

Hybrid Life Insurance with LTCI
(combination LTCI and modest life insurance)

This type of coverage offers LTC protection, a modest death benefit, and sometimes a return of premium feature. It could benefit someone who is looking to reposition an existing asset or 1035 exchange proceeds from an old life insurance contract.

Premium: Higher than traditional LTCI, but premium is fixed.

If your client needs LTC: Policy provides a monthly benefit as a percentage of the death benefit until the death benefit is exhausted.

What happens if client doesn’t use the LTC benefit? Heirs will receive 100% of the death benefit, tax free, less any cash value withdrawn.

Are the benefits tax free? Yes

Life Insurance with LTCI Rider
(combination LTCI and significant life insurance)

This type of coverage is good for maximizing the death benefit while retaining flexibility to address the cost associated with LTC.

Premium: Highest premium with an increasing death benefit, it also offers the highest guarantee that some benefit is going to be paid in LTCI or death benefit; premium is fixed.

If your client needs LTC: Policy provides a monthly benefit as a percentage of the death benefit until the death benefit is exhausted.

What happens if client doesn’t use the LTC benefit? Heirs will receive 100% of the death benefit, tax free, less any cash value withdrawn.

Are the benefits tax free? Yes