Integrated Strategies
For Every Step of Life

  • Main Office:
  • 102 South Main Street
  • Bluffton, OH 45817
  • 419.358.8060
  • cwmg@lpl.com
Inflation and Your Portfolio Should You Ever Retire? An Arm and a Leg The New Wild West: Bitcoin

Welcome to Citizens Wealth Management Group

 

The Changing Face of Long-Term Care Insurance

There is both bad news and good news when looking at long-term care insurance. Long-term care is essential for many in the Baby Boom generation. The over-65 demographic in the U.S. is expected to grow from 39 million to 51 million people between 2009 and 2019.[i] At age 65, this group can expect to live to age 83,on average. While that may be welcome news to many, it should put preparing for the cost of long-term care high on their to-do lists because most people over the age of 65 need more than one or two years of long-term care.[ii]

The Bad News:  Long-term care policies are less affordable

Recently, consumers and financial advisors have begun to question whether stand-alone long-term care insurance is financially viable. During the past five years, 10 of the top 20 companies offering individual long-term care policies have abandoned the market because increasing longevity, uncertain care costs, low interest rates, and a lower-than-expected lapse rate created an environment in which they could not afford to keep issuing policies.[iii] Companies that still offer stand-alone long-term care policies have dramatically raised premiums on new contracts and retain the right to increase rates, when needed, on new and existing policies. Many also have limited benefits and benefit periods. As a result, it’s fair to say fewer and fewer people will be able to obtain and maintain traditional stand-alone long-term care policies. 

The Good News:  An alternative is available

Many industry experts believe that Linked Benefit/Hybrid Products provide a sound alternative in the current economic climate. A hybrid product is a life insurance policy with a long-term care rider. The rider allows a portion of the death benefit to be paid out to cover long-term care expenses. This type of policy appeals to many, especially if they are unsure about whether they will ever need to use the insurance. With a long-term care rider, if you never need long-term care, your beneficiaries will receive benefits. Also, unlike traditional long-term care policies, which may increase your premium, premiums for hybrid products typically are fixed. For people with a limited budget or tight cash flow, this may be very attractive.Riders are additional guarantee options which are available and may carry additional fees, charges, and restrictions. Use of the long-term care benefits will reduce the death benefit of the policy. You should review a contract carefully before purchasing. Guarantees are based on the claims-paying ability of the issuing insurance company.

While a hybrid insurance solution doesn’t eliminate all of your potential long-term care risk as a traditional long-term care policy may, knowing you have some protection can provide peace of mind.

 

 


[i] Centers for Medicare and Medicaid Services, National Health Expenditure Projections 2009-2019, September 2010 (https://www.cms.gov/NationalHealthExpendData/downloads/NHEProjections2009to2019.pdf)

[ii] Brandeis University, Living Longer on Less: The New Economic (In) Security of Seniors, March 26, 2010 (http://iasp.brandeis.edu/pdfs/LLOL%20Report.pdf

[iii] Chicago Tribune, Long-Term Care Dilemma, April 13, 2012

 

 

 

Helpful Content

Your Personal Recovery

Your Personal Recovery

As the economy gathers momentum, many are waiting for their personal finances to gather momentum, too.

Exit Strategies of the Rich and Famous

Exit Strategies of the Rich and Famous

Estate conservation is too important to put off. Do you have a smart exit strategy?

Suddenly Single: 3 Steps to Take Now

Suddenly Single: 3 Steps to Take Now

Here are 3 steps to take right now that may make a difference if you find yourself suddenly single.

 

What to Look for in a Long-Term Care Policy

Here’s a list of 10 questions to ask that may help you better understand the costs and benefits of long-term-care insurance.

Catch-Up Contributions

Workers 50+ may make contributions to their qualified retirement plans above the limits imposed on younger workers.

Making Sense of U.S. Household Net Worth

A look inside the U.S. government's statistics on household net worth.

What is the Value of Your Business?

Ascertaining the value of your business is important for a variety of reasons.

Disability and Your Finances

In the event of an unforeseen accident or illness, disability insurance may be a good way to protect your income and savings.

Retirement Income and the Traditional Portfolio

Experiencing negative returns early in retirement can potentially undermine the sustainability of your assets.

View all articles arrow

Tax Freedom Day

Assess how many days you'll work to pay your federal tax liability.

Annuity Comparison

This calculator compares a hypothetical fixed annuity with an account where the interest is taxed each year.

Should I Pay Off Debt or Invest?

This calculator will help determine whether you should invest funds or pay down debt.

Inflation & Retirement

Estimate how much income may be needed at retirement to maintain your standard of living.

Taxable vs. Tax-Deferred Savings

Use this calculator to compare the future value of investments with different tax consequences.

Comparing Investments

This calculator compares the net gain of a taxable investment versus a tax-favored one.

View all calculators arrow

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

Long-Term-Care Protection Strategies

The chances of needing long-term care, its cost, and strategies for covering that cost.

An Inside Look at Retirement Living

A number of questions and concerns need to be addressed to help you better prepare for retirement living.

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

View all presentations arrow

The Junk Drawer Approach to Investing

It's easy to let investments accumulate like the junk in a junk drawer.

What Can a Million Dollars Buy You?

$1 million in a diversified portfolio could help finance part of your retirement.

Where Is the Market Headed?

We all know the stock market can be unpredictable. We all want to know, “What’s next for the financial markets?”

The Cost of Procrastination

Procrastination can be costly. When you get a late start, it may be difficult to make up for lost time.

Charitable Giving: Smart from the Heart

Do you have causes that you want to support with donations? Here are three tips.

Your Personal Recovery

As the economy gathers momentum, many are waiting for their personal finances to gather momentum, too.

View all videos arrow