Long term care, in essence, is an insurance service concentrating in elderly insurance coverage that is typically not offered by such entities as Medicare or social security. If an individual can not do elementary endeavors due to external factors like injury, illness, or frailty, and daily support is required for at least 90 days, then a long term care policy is the best route of action for ensuring their wellbeing. In addition, long term care is by no means a rare requirement. Surveys show that nearly a quarter of men and women (50 % men, 75 % women) surpassing the age of 65 will need this focused type of coverage. Needless to say, it is highly in demand. Furthermore, senior citizens are not the only group of individuals seeking long term care. Almost half (40 %) of long term care claims were submitted by working people, some far from retirement (i.e. 20's to 40's) and some nearing retirement (late 50', early 60's).
Long term care is on the higher end of the spectrum when it comes to cost measured to other types of insurance coverage. Highly occupied states, such as California, carry long term care costs extending to as high as $ 75,000 per year (roughly $ 200/day) with a current escalation rate of 5.5 %. Backing of coverage typically comes from several different outlets. They include private savings and retirement accounts, family members, or from Medicaid.
Long term care, like all types of coverage, comes with a certain risk aspect that needs to be accounted for. First off is the fact that it is the largest unfunded liability in the country. The second risk has to do with the 70 million + baby boomers who are in or nearing their golden years, and the reality that less than 10 % have long term care protocols. The third is that employee care giving costs in total average above 20 billion dollars per year, and are increasing as time goes by.
The biggest impact on LTC employers is the loss of productivity. Studies show that more than 60 % of caretakers are already working in the field on average of 36 + hours a week. This has a major impact on the caregivers themselves, such as enhanced stress, lost wages, lack of efficiency, and more. The cost of operating such extraneous hours can be hard for the employer, and many strategies (i.e. promotions or relocations) don't appeal to the caregiver, often times turning down them entirely.
Supplying LTCi benefits employers in a variety of ways for the following justifications. First off, it enhances productivity because the product they are offering has more than one possible buyer. LTC can be offered to not just the person who needs it, but also to other family members like companions, parents, or grandparents to name a handful. Second is that the companies can buy it for themselves and hence secure their financial wellness in the long term. Many retirees go broke because they don't have LTC, consequently by selling it, you can acquire it yourself and safeguard your bottom line.
Further reasons for employers to make available LTCi have to do with the use of discounted dollars (10 cent dollars or less), as they can aid workers in conserving their retirement funds. More so, multi-life LTCi programs are customized, and therefore offer total mobility (ERISA, COBRA, or conversion plan administration is irrelevant). They also cast employees by such factors as class, tenure, or role in the business and take advantage of premium tax write-off for employees where applicable.
LTCi is a non-inflationary family benefit with rates set at employees age at registration, which do not increase each year. In addition, LTCi teaches an alternative approach, wealth preservation instead of wealth accumulation. It provides financial security and reduces the risk of going broke in retirement so long as the employee starts carrying LTC earlier on.
Multi life LTCi offers substantial employee benefits compared to that of True Group, key to this FACT is that multi life policies are highly adjustable, more pliable, and therefore a more profitable and easy to administer possibility. The following chart compares and contrasts sturdy findings comparing the two.
Further LTC benefits come from a notable amount of support from the state and federal government. For example, government financial programs recognize the substantial unfunded liability if the niche market (baby boomers) don't acquire LTCi. What this means is that LTCi benefits are not subject to levies, which is an unparalleled advantage for LTCi carriers.
Offering long term care is a duel employer-employee benefit. Of the most powerful outcomes of introducing long term care is that it makes employees conscientious about keeping intact the lifestyle that they've become accustomed to and their future wealth in general. In addition, underwriting procedures are made ease of, which benefits all parts of the company, from the underwriters themselves to claims adjusters to brokers alike, subsequently increasing performance in an unparalleled fashion. These advantages alone were one of the major reasons for why LTC was the most requested benefit in 2006 and 2007.
There are many options for an employer sponsored LTCi program, the chart below illustrates three major options
In going about a multi life LTCi, begin by protecting the executives in the company who are top earners and/or a necessary aspect to the companies effectiveness and overall financial success. Next use the executive carve out to identify the key workers in the agency and remunerate them appropriately. As for the rest of the employees who are just starting up, put them on a basic plan and present them with buy up options so they distinguish there potential for growth.
Key to introducing long term care benefits is a census in excel format. This census should be complete with the following. An illustration of what your census should look like is as follows.
As mentioned earlier, the underwriting process is simplified with long term care insurance plans. The following is a list of potential questions that may ensue during the underwriting process
Are you presently suffering from any significant illness? If yes, note them below. Are you currently living in a household care or nursing facility (Y/N) Have you been recommended to seek nursing or residential care facilities? Do you require the aid of others for daily ventures?
Employers can benefit from Multi life LTCi owing to the fact that employee premiums are totally tax deductible based on type of business (i.e. LLC, C-Corp, etc.). Aside from that, employers and employees are not the only ones who benefit from tax free premiums, the policy holder themselves are also free from tax financial outlays.
Multi life LTCi is a dual benefit product for employers and employees alike. A by-product of LTC is employee focus on work versus care giving. For example, offering to relatives, and ultimtately safeguarding the workers bottom line. Retirement funds for employees are also guarded, as they are entities which have taken years to create and thus need the most upkeep possible. The tax benefits are unparalled and extend far beyond the premium invested funds (in comparison to equal salary increase). It's appeal has the power to recruit the best employees attainable and keep them working for the company. Needless to say, the benefits of offering employer sponsored long term care far surpass the downsides if installed and maintained efficiently and successfully.
Options for Whole Life Insurance
