In the long-term care insurance industry today, carriers offer three basic LTC Protection Concepts for
your clients to consider. Explaining this to them at the start of your LTC meeting will help them better
grasp their options and let you know which concepts they are most comfortable with.
1. Stand-alone LTC Insurance Policies. These plans are often referred to as traditional LTC insurance
policies since they closely resemble the early plans of the 1980’s and 90’s. Traditional LTC plans allow
your client to pay a low recurring premium for access to a significant LTC benefit should the need ever
arise. They are simple, affordable for many, and are a great option for individuals with a comfortable
stable cash flow, and limited cash liquidity in their savings or investment portfolio.
2. Recurring Fixed Premium LTC Weighted Life Insurance Policies. These are often called hybrids or
linked-benefit plans since they provide both a Life Insurance Benefit and a Long-term Care benefit
together in one policy. Insureds pay a fixed recurring premium for access to a significant LTC benefit,
cash surrender benefit, and a death benefit. Depending on the options chosen, the policy’s premium
can become “fully paid up” at a point in the future. Although, these plans are obviously not as simple as
stand-alone LTC plans and their premiums are higher, they are still affordable for many, and are a great
option for individuals with a comfortable stable cash flow, and limited cash liquidity in their savings or
investment portfolio. This type of individual primarily wants to know that the policy will pay a benefit if
they need care, die, or, change their minds and cancel their plan.
3. Single Premium LTC Weighted Life Insurance Policies (Leveraging Plans). This option allows clients to
reposition a small cash reserve or investment to “pre-fund” a significant LTC Benefit. These too are
hybrids or linked-benefit plans since they provide both a Life Insurance benefit and a Long-term Care
benefit together in one policy. Insureds pay a single lump sum premium for a “fully paid up” policy with
access to a significant LTC Benefit, cash surrender benefit, and a death benefit. This is a great option for
your clients that have liquidity in their current savings or investment portfolio, don’t want to pay
ongoing premiums, and want to know that the policy will pay a benefit if they need care, die, or, change
their minds. There may be significant advantages to certain of your clients to consider funding these
plans by repurposing the cash values of older life Insurance or deferred annuity policies.
Any of these three concepts are an excellent choice to mitigate LTC risk. First, help your client find the
concept that they are most comfortable with. Then, compare policies and help them secure the plan
that is their best fit.