the finance of longevity

The Missing Piece of a Financial Wellness Programs

How LTCi can round out, and protect, the best made plans

by Steve Cain, CLTC

Mr. Cain is a Director and Sales & Business Development Leader at LTCI Partners, a brokerage general agency (BGA) specializing in Long-Term Care Insurance solutions. Contact Cain at and visit here for additional information.

March 10, 2017 — Workplace financial wellness programs are growing in popularity among employers and employees alike. Both groups recognize the negative effects that employee financial stress can have on worker morale and productivity.

This trend makes sense given that voluntary benefits programs are an increasingly popular way for employees to learn about and plan for important financial concerns, such as their “retirement readiness.”

Long-Term Care Insurance (LTCI) should be part of these discussions because of the growing need to prepare for healthcare costs in retirement, but too often it is not. Most employers (HR professionals and C-suite executives) are beginning to understand the important role LTCI can play to help protect 401(k) savings in retirement.

They are typically in the age range where “retirement readiness” is a pressing concern and many have a personal experience or have witnessed a Long-Term Care event in their family. The real problem may be broker skepticism or a lack of confidence in the LTCI marketplace.

Regulatory Challenges

The LTCI market has been through a lot of turmoil over the past several years due to a challenging regulatory environment, record low interest rates and worse than expected claims. Numerous in-force rate actions and fewer carriers in the market have caused many brokers to shy away from presenting LTCI to their clients. The LTCI industry has gained experience and made adjustments to improve the products being offered. Now that the market has stabilized, benefit brokers should put LTCI back on the table.

Presenting LTCI as part of a workplace financial wellness program is the ideal way to overcome the "cognitive dissonance" that prevents most individuals from considering major risk planning...

Presenting LTCI as part of a workplace financial wellness program is the ideal way to overcome the “cognitive dissonance” that prevents most individuals from considering major risk planning, including Life Insurance and LTCI, on their own. Many people avoid thinking about the potential need for Long-Term Care despite studies showing that 7 in 10 people over 65 will require a Long-Term Care service in their lifetime. And Long-Term Care can be expensive. The average annual cost of a moderate home care claim is about $50,000, and the average annual nursing facility claim is $90,000.

Relatively few individuals, especially among those who are less affluent, are working with a professional financial advisor who might broach the subject of LTCI.

The Worksite Solution

LTCI presented in a workplace education program will help to ease employees’ hesitance to consider it and employees may feel more comfortable with the option given that it has been vetted by the employer. “Your health is your wealth!” — How many times have we heard that? Knowledge certainly affects one’s ability to make good choices and this rings true in the corporate environment as well. The key is to present LTCI as a financial tool for protecting retirement assets, rather than placing the primary focus on the likelihood of experiencing a Long-Term Care event.

Moreover, there are several important benefits for employees when accessing LTCI through a company benefit package, including:

  • Simplified-issue coverage
  • Unisex rates
  • Corporate discounts
  • 100% portability, and
  • Ease of enrollment

Offering Long-Term Care solutions in the workplace also offers benefits for employers. From an employer’s “economic” perspective, it’s important to help employees return to work as soon as possible, because the expense to hire and train a new employee can be an unexpected financial burden. In addition to helping address the needs of an aging workforce, Long-Term Care solutions can help retain a quality workforce and contribute to a reduction in the instances of employee absenteeism to care for a spouse or other covered family member. Such solutions enable employees to be involved in care giving without having to leave work to be a primary caregiver.

Other benefits include the following:

  • Limited administrative support required
  • Flexible billing options (direct bill or payroll deduction)
  • Generous tax treatment for executive benefits (employer-funded plans)
  • Online enrollment and call center support

Now is the perfect time for brokers to take the opportunity to present group LTCI coverage as a viable and desirable financial planning tool for their corporate clients. Employees seeking to improve their financial situation will appreciate the additional value of having this as an option.