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What The Baby Boomer Generation Means for Long-Term Care

What The Baby Boomer Generation Means for Long-Term Care

There’s never been a better time for an agent to be in the market to cater to people in need of Med Supp and long-term care insurance options. Understanding the changing landscape of offering these products, however, makes it all the more important for insurance agents to know how they can address the needs of this growing segment of the market.


Longevity And The Rising Opportunity For Long-Term Care Insurance Agents

Longevity numbers over the last several decades have been on the rise. Advances in medical technology and a greater commitment to health and wellness across a person’s life can increase a baby boomer’s life expectancy. This means that someone who is entering retirement may expect to live 20 or 30 years beyond their retirement day. On top of that, thousands of individuals are reaching retirement age every single day.

Although this has plenty of positive aspects, it also raises serious concerns about the physical and financial needs that many Americans need to consider. Most people may be under the impression that they’ll have the same capabilities and opportunities to be independent at age 85 or 90 than they would at age 65, but unfortunately that is not a reality for many.

 If you are turning 65 today in the United States, there is up to a 70% chance that you may need some type of long term care over the course of your life, according to the research shared by the U.S. Department of Health and Human Services. That care can be extremely expensive, according to recent studies. This makes it all the more important for agents to be equipped to have the long-term care planning conversation.

Most people approaching the retirement planning process today are looking ahead to the future for the most beneficial opportunities to support them through an active and healthy retirement.

However, this is not always what happens and more and more individuals need to consider the benefits of incorporating long term care insurance into their overall portfolio to protect them. Most people entering retirement already have an estate plan in place and this is a very valuable tool, but it could be quickly decimated if the individual has not prepared appropriately for the expenses of long term care.

Long-Term Care Insurance And Individual Assets

Qualifying for Medicaid can also be extremely complicated. A person may use a long-term care insurance policy to ensure that their assets are protected while also enabling them to qualify this critical government service. Given the rising cost of long term care, the increasing longevity for both men and women and the high chances of being involved in at least one long term care event, it is pertinent time for agents to make the most of the opportunity to capitalize on the opportunity to present long term care solutions.

Genworth Financial’s annual cost of care survey identified that the median rate for a private nursing home room was nearly $8000 every single month. An in-home aide, however, was almost $4000 per month and those costs are on the rise.

What About Medicare And Long-Term Care Costs?

If an individual is expecting that Medicare will make the payments for a skilled nursing facility, it is important to bear in mind that this federal government program only pays for short stays on home health care, hospice care or in-home nursing facilities for certain conditions.

Beyond that point, it will come out of the person’s pocket. All of the work that an individual has put in over the course of their life to accumulate wealth and protect their assets could fall apart in a relatively short period of time, just as a result of one long term care event. One of the only options for many individuals who are unable to pay for a long term care out of pocket is to spend down all of their assets in order to qualify for Medicaid.

Relying on Medicaid to cover an individual’s care could be devastating financially, particularly in the event that the person has a surviving spouse. This is why it is so important for everybody to have a plan as well as multiple options. Although every person qualifying for long term care insurance may certainly hope that they never need to tap into it, it is important to realize that having it there as a safeguard protects wealth for future generations, enables a spouse to live on comfortably even when a loved one has a long-term care event or passes away and gives both individuals peace of mind about what will happen in the event of in-home health aides or nursing facility care.

 Long term care insurance enables individuals to pay a premium that may increase until it hits a specified maximum. In order to tap into benefits a buyer may need assistance with at least two out of the six activities of daily living. Consulting with an experienced insurance agent can help to give peace of mind for aging individuals even if they are still in relatively good health. Agents must be prepared to have the conversation about the benefits of long term care insurance as well as recommendations for the most appropriate type of care.

Key Takeaways In This Article

  • Life expectancy is increasing beyond retirement age increasing chances of a long-term care event.
  • Long-term care events are very expensive especially without coverage and can cause significant financial hardship.
  • The earlier coverage is included in a person's overall portfolio the better.
  • Be aware of the possibility clients may have to "spend down" all of their assets to qualify for Medicaid for help with Long-term care events
  • Be prepared as an agent to have long-term care conversations with your client before it's to late.

Over to You

We'd love to hear your thoughts in the comments below on:

  1. Do you believe in long-term care insurance, why or why not?
  2. What are your experiences with long-term care events?
  3. What else would you do to safeguard your client's financial security?

If you have any questions, please leave a comment below. We will carefully read each one of them. Happy Selling!

About the Author Matthew King

Matthew King is a co-owner of TR King Insurance Marketing and partner at Independent Life Insurance Agent Association. When he's not creating processes, content, and developing SEO strategies, he likes to immerse in gaming with his wife and friends.