November is Long-Term Care Month

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At the time of this writing, it is Election Day, November 3rd, 2020. And besides being a very big day in America, it is also Long-Term Care Awareness Month.

Long-term care, to me, is a very personal thing because both my parents and my wife Donna’s parents spent time in assisted living nursing homes and hospice before the four of them passed away.

This continues to be a really important issue for people’s retirement planning because, without long-term care insurance in force, people are vulnerable to the very high cost of care — whether that be in-home with an aide, in an assisted living facility, or in some facility where more than just assistance is needed. In any of those situations, a good long-term care solution would pay for those costs, but this product is continuing to evolve. Fewer and fewer companies are showing long-term care insurance in its traditional form, meaning a standalone policy that just covers long-term care.

The reasons for that are many fold. Originally, these products were priced with certain assumptions:

• What interest rates the insurance companies would earn,
• How long people would live, and
• People would drop their policies.

But none of those underlying assumptions were accurate. Interest rates went down, people did not drop their policies, and people lived longer and longer. In spite of the opioid crisis and COVID-19, life expectancies increased, and as they did, and people live longer and longer, it has been the perfect storm for the long-term care companies — so fewer and fewer carriers are selling the traditional policies. In fact, one of the major players in the traditional long-term care space, Mass Mutual, just announced that as of the end of January 2021, it would cease selling its traditional long-term care products.

However, there is a light at the end of the tunnel.

The products of choice today are what we call hybrid policies or life insurance policies with long-term care riders. These choices give the consumers an opportunity to protect themselves against the cost of long-term care, but not be in a position where they would lose their money in the event of a death, or if they decided they didn’t want the product anymore.

Each of these hybrid or life policies with long-term care solutions come with different pools of money, not just for long-term care. For instance, if after 20 years you passed away, there would be a death benefit. With some of these policies, the death benefit increases the longer you have them, and some of these policies have a level death benefit.

Also, some of these linked benefit or hybrid or life policies with long-term care have a cash value and that cash value grows without taxation. If the client wanted to stop their long-term care insurance, they could get back the cash value, which could potentially be equal to or significantly greater than what they initially invested into that policy. So there are some great solutions available from some very good companies.

The continuing trend of traditional long-term care is changing in the sense that there are only a handful of companies still selling these products. So, being that it is Long-Term Care Awareness month, if you’d like to discuss developing a solution to protect your wealth, your estate, your net worth from the cost of care, let us know. Give us a call — we’ll be happy to help.

Have a great day and a great month and a great year.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS. Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

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