Our firm recently attended a continuing education session on long-term care planning, a topic with which we regularly assist our clients. One of the panel speakers, Brian Gordon with MAGA Long Term Care Planning, followed up to provide us with a helpful recap of some of the questions we tackled:
Q. What’s the best age for clients to consider purchasing LTCI?
A. This isn’t a question of chronological age, but rather a person’s stage of life. The best time to purchase is when:
- A client is financially stable and feels premiums are affordable and can be maintained.
- A client wants to protect retirement income.
- A client has limited debt.
So if you have clients or family members who meet these criteria, regardless of age, now is the best time to plan for the consequences of a long term care event.
Remember, the longer a person waits, the more expensive coverage will be and the more likely that a health issue could impact their premium or eligibility.
Last year, the average age of our clients purchasing new policies was 56 years old.
Q. What conversation should I have with affluent clients who want to self-insure their LTC risk?
A. If your clients can afford to self-insure, that’s fine. But they’ll need to plan it out with you. Ask them to identify exactly what funds they would liquidate first to pay for a long term care event and make sure it’s not already earmarked. We also would shift the conversation to catastrophic coverage.
We have many affluent clients who—after having that conversation—elect to self-insure part of their risk and obtain coverage with guaranteed benefits and premiums. Often, they do so to protect income, assets for retirement, and family legacy.
Many of our clients in this position choose to purchase an asset-based life policy with an LTCI rider. They like the guaranteed premium and having a fully-paid up LTCI policy. They sometimes purchase similar plans for their children and even grandchildren, so they don’t need to worry about future LTC costs and premium payments.
Q. I have clients who are planning to retire outside the U.S. Do LTCI policies provide benefits for long term care received in another country?
A. It depends. Most LTCI policies do offer international benefits, but they’re often more limited than those providing care received in the U.S.
Sometimes, the dollar amount is reduced, the benefit period is shorter or the benefits are limited. International benefits vary widely by carrier and plan.
Clients who already have LTCI should review their policy provisions if contemplating a move abroad, so they can plan accordingly.
For clients preparing to purchase LTCI, ask them if they’re considering retiring overseas. If so, we can make sure they are offered an LTCI policy that offers the most generous international benefits.
Email us to request a copy of our most recent International Benefits Chart.
CCRCs & LTCI: The Least You Should Know
At the conference, Justine Vogel, CEO of RiverWoods of Exeter, and Cathleen Toomey, VP of Marketing of RiverWoods, made an excellent presentation on Continuing Care Retirement Communities, or CCRCs. As long term care planners, we feel it’s important to understand how CCRCs and LTCIs work together.
CCRCs offer their residents lifetime housing and increased levels of care as health needs change. In addition to providing three tiers of care (independent living, assisted living, and skilled care), CCRCs typically offer three types of contracts, ranging from full-service life care (spanning all three tiers of care) to ala carte care (which typically doesn’t include nursing home care).
Here’s where LTCI comes into play. If a client has LTCI, it should play a role in what type of CCRC contract he or she chooses. For example, he or she may not need to choose the most expensive life care contract, since assisted living and nursing home care will be covered under their LTCI plan.
A few tips for clients with LTCI when selecting a CCRC:
- Make sure the CCRC allows for home care. While most CCRC contracts do not include home care, some allow it—so a client with LTCI coverage could take advantage of home care benefits while living in a CCRC’s independent living arrangement.
- In order to be covered under an LTCI policy, the CCRC’s assisted living unit must have an RN on duty 24/7. Not all assisted living facilities provide this, so it needs to be confirmed in advance.
- Ask the CCRC if they would consider the client’s LTCI policy an asset when applying.