Integrated Strategies
For Every Step of Life

  • Main Office:
  • 102 South Main Street
  • Bluffton, OH 45817
  • 419.358.8060
  • cwmg@lpl.com
Investment Services Financial Planning About Team

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

The Power of Compound Interest

The Power of Compound Interest

Learn how to harness the power of compound interest for your investments.

Is a Variable Annuity Right for Me?

Is a Variable Annuity Right for Me?

Pundits go on and on about how “terrible” or “wonderful” annuities are, but they never talk about whether annuities are right

Options When Your CD Matures

Options When Your CD Matures

Knowing your options when a CD matures can help you make a sound investment decision.

 

Putting a Price Tag On Your Health

Being healthy not only makes you feel good, it may also help you financially.

A Decision Not Made Is Still a Decision

Investors who put off important investment decisions may face potential consequence to their future financial security.

Systematic Withdrawals in Retirement

Taking regular, periodic withdrawals during retirement can be quite problematic.

What's So Great About a Rollover?

Making a career move requires tough decisions, not the least of which is what to do with the funds in your retirement plan.

The Utility of Sector Investing

Successful sector investing is dependent upon an accurate analysis about when to rotate in and out.

Important Birthdays Over 50

Here's a look at several birthdays and “half-birthdays” that have implications regarding your retirement income.

View all articles arrow

Assess Your Life Insurance Needs

This calculator estimates how much life insurance you would need to meet your family's needs if you were to die prematurely.

Interested in a Fuel Efficient Car?

Estimate how many months it may take to recover the out-of-pocket costs when buying a more efficient vehicle.

Should I Pay Off Debt or Invest?

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

What Is My Life Expectancy?

Estimate how many years you may need retirement assets or how long to provide income to a surviving spouse or children.

Should I Buy or Lease an Auto?

This calculator compares the financial impact of leasing versus buying an automobile.

My Retirement Savings

Estimate how long your retirement savings may last using various monthly cash flow rates.

View all calculators arrow

Protecting Those Who Matter Most

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

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

Long-Term-Care Protection Strategies

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

Managing Your Lifestyle

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

An Inside Look at Retirement Living

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

Principles of Preserving Wealth

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

View all presentations arrow

The Good Ship IPO

The seas of the market are constantly shifting, and whether the good ship IPO can set sail may depend heavily on the tides.

The Cycle of Investing

Understanding the cycle of investing may help you avoid easy pitfalls.

Should I Invest In REITs?

Are Real Estate Investment Trusts right for your portfolio?

Perception vs. Reality

There’s an alarming difference between perception and reality for current and future retirees.

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.

Your DNA Test

If you have a family that relies on your income, it’s critical to know what their needs would be in the event of your death.

View all videos arrow