“Isn’t Long-Term Care (LTC) really expensive? Hard to qualify for? What if I never use it?” – If you have sold LTC in the past, chances are you have heard these objections. We know that these concerns are real, and we know the LTC landscape has changed – traditional LTC sales are down, many of the companies have pulled out of the market, and many of the available products and benefit options have changed…. But, the risk of an LTC claim taking place for most Americans is still a huge fear! 52% of all people turning age 65 will need some type of LTC during their lifetime, while the median annual Nursing Home cost for a private room in 2017 was $97,455. The median annual household income, however, for those turning 65 is less than $40,000 per year! You might ask yourself, “where is that extra $60,000 a year going to come from for most Americans?” It’s not that those seniors don’t see this risk, there are many factors that have led to these statistics.

Out of all the different changes in the LTC world, the emergence of hybrid Life and Annuity products has been a big part of the shift. In fact, when talking with prospects about LTC planning in 2019, an Agent would be remiss not to at least mention all the options – your traditional LTC, hybrid Life with LTC or “Living Benefits”, and/or the Annuity with LTC enhancement. Some clients might prefer to couple their Life Insurance and LTC, or perhaps you have a client that has assets set aside but won’t qualify for LTC – Many of the annuities with LTC benefits don’t require any underwriting at all!

There are a few different types of annuities with LTC or Living Benefits and it is important to make the clear distinctions when explaining them to clients. First, many of the Lifetime Income products have a doubling feature for LTC (mainly fixed indexed annuities). The main distinction with these is that most of them double income for Nursing Home Confinement only, while some double income when the annuitant is unable to perform 2 out of 6 activities of daily living. Most people want to stay in their own home as long as possible, so typically the 2 out of 6 ADL trigger products are more sought after. These products generally do not require any type of underwriting. At Pinnacle Financial we are partnered with top rated Insurance Carriers that offer both types of options.

Be aware that there are annuities with LTC benefits do require underwriting. These annuities tend to provide a much more robust payout for an LTC claim (compared to a 2x lifetime income payment). One of our carriers offers a fixed annuity that will double or triple the full account value for LTC (depending on underwriting). This annuity is underwritten – health questions on application, as well as script check and MIB look-up. Some clients will qualify for the 3x benefit, while other less healthy applicants might only receive the 2x benefit. Pinnacle offers several similar options, some of which do not require any underwriting!

It is important to look at all the options when considering LTC planning in 2019. Every client’s situation is a little different and there are many different factors that go into choosing the right plan. Whether it be a traditional LTC plan, a hybrid life, or an annuity with LTC type benefits, we have all the options at PFS. Give us a call today and let us help you grow your business.