For Professional Advisors:
If your clients are shopping for long-term care insurance, they should
expect higher costs and a tougher approval process.
That’s the message in a recent
Wall Street Journal article (
http://on.wsj.com/2ljVOyV) about the decision by an increasing number of insurers to stop selling
Most recently, Prudential Financial announced plans to stop taking applications
for individual policies that pay for nursing homes, assisted living and
in-home care. Prudential plans to continue offering group care coverage
Prudential is the 10th of the top 20 insurers by sales to quit this market
in recent years, the article said.
For insurers that continue to sell individual long-term care policies,
many employ nurses or social workers to screen applicants’ health.
Some even check prescription drug databases to learn all the medications
your clients have ever been prescribed.
What Does This Mean to Clients?
People used to shop for long-term care coverage when they were well into
their 60s. That may be too late for most clients.
In light of this trend, we believe it has become more important than ever
to buy a policy now rather than take too long to shop and put off the
decision until later. Procrastination will end up costing much more. Estate
planning options are much more flexible when there is a long term care
policy in place.
With the skyrocketing cost of long-term care and premiums rising as much
as 20 percent for certain policy holders, it is becoming more common for
people to buy three to five years of benefits, rather than lifetime coverage.
Clients can also consider buying one policy with a “shared-care rider”
so that benefits can be used by either spouse or split between them, the
Finally, the article discussed two “hybrid” products as an
- A deferred fixed annuity packaged with long-term care benefits;
- A life insurance policy in which a portion is paid to cover the cost of
These alternatives can help cover the cost of care, while still providing
a payout to your client or his heirs.
As always, I hope this article has helped you and your clients. If you
have a specific concern or questions, please contact our office.