The statistics don't lie—70% of people turning 65 will need some form of long-term care during their lives. That means 70% of your clients are probably unprepared for this major life expense. How can you help them? By starting the conversation and helping them choose the form of long-term care insurance that's right for them. Your first step is learning the basics of long-term care.
Factors that Increase Your Need for Long-Term Care
The first step in evaluating the need for long-term care is finding out where you stand along a spectrum of causality. If you have more risk factors, you're going to have a greater-than-average need for long-term care. But what are those risk factors? Here they are:
- Gender. Women have longer lifespans, and as a result, are more likely to need long-term care.
- Family history. Did your parents or grandparents have chronic conditions that required care? If so, there's a greater chance that you will, too.
- Disability. Do you currently have a disability? Between the age of 40 and 50, 8% of people with a disability need long-term care. A whopping 69% of people who live to the age of 90 have a disability, according to the U.S. Department of Health and Human Services.
- Personal medical history. Do you have diabetes, high blood pressure, arthritis, or other chronic conditions? If so, you're more likely to need long-term care later in life.
Pair Risk Factors with Statistics
Less than 1/3 of people age 50+ have begun saving for long-term care.
If someone told you there was a 70% chance of rain, you'd probably carry an umbrella. Yet 66% of people age 50+ haven't started saving for long-term care. That's not smart planning. Jesse Slome, the Executive Director of the American Association for Long-Term Care Insurance, has an interesting way of looking at LTC. When clients ask him what their risk of needing long-term care is, he says, "It's either 0% (you'll never need it) or it's 100% (you'll need it). I call it the 'lottery you don't want to win...though the odds are significantly greater than winning the lottery!'"
Your clients may still be unsure whether they'll use a policy, even if they were to buy one. According to a 2012 survey of LTC actuaries, 50% of people who buy a zero-day elimination period policy at age 60 will use that policy before they die. That number drops when you shift the analysis to 90-day elimination period policies. Of people who bought these more affordable policies, 35% of them used the coverage before dying. Why the drop? In most cases, it's because that 90-day waiting period ended in either recovery or death. Still, that's more than 1/3 of all policyholders who needed that coverage. Would you go out on the road without auto insurance if you knew there was a 35% chance you'd get in a serious accident?
Women and Long-Term Care
Roughly 66% of the $6.6 billion in long-term care insurance claim benefits paid in 2011 were paid for women needing care."
On average, women outlive men by approximately five years, according to the Department of U.S. Health and Human Services. This means they're more likely to need care than men. Many women act as caregivers for their husbands, who pass away first. Oftentimes, the cost of care needed by her deceased husband leaves a widow with very little income or savings. She then has to depend on family for her continued care. But what happens if and when her family isn't available or can't provide the kind of care she needs? Most of your clients probably can't answer that question.
In an ironic twist for women, the longer they live, the longer they are likely to continue to live. For example, women who live to age 65 live an average of 20 years more, according to the American Association for Long-Term Care Insurance. Women who live to age 75 tend to live an average of 13 years more. In both of these statistical examples, the woman lives well into (if not through) her 80s. And guess what? 55% of all long-term care insurance claims begin after the age of 80. Of all the Americans age 85 or older, 2/3 of them are women.
There's one very good selling point for LTC insurance: rates aren't based on gender. Women pay the same as men, even though there's a statistically greater chance she'll use those benefits. If a husband isn't interested in coverage, that doesn't mean a wife shouldn't still be covered on her own. We can even structure the policy so that, if needed, the husband can dip into his wife's coverage.
Preparing for the Future
The first step in preparing for the future is talking about it. We can help you get that conversation started with your clients. We'll provide everything you need to learn about the carriers who offer LTC, which policies work for different clients' life situations, and how to request a quote. Ready to get started?
Click here to watch our long-term care webinar, then get all the sales tools you need, including:
For more help selling long-term care, call us at 800-823-4852. We can help with sales concepts, planning, illustrations, carrier selection, and more.