The following piece was authored and is re-published here with the permission of my dear friend and colleague Tobe Gerard.
Tobe makes two points. The first is that long-term care insurance (LTCi) policies are normally purchased many years in advance of being needed. We are now seeing “the tip of the iceberg” of claimants who need to collect from their LTCi. For the foreseeable future, we should see annual increases in the number of claims being filed and the amount of money being paid out for LTC.
The second point Tobe is making is that it is typically a son or daughter who assists with the claim. LTCi claims are not onerous, but policyholders are typically not able to manage them alone. Letting kids and other trusted individuals know you own LTCi is sometimes difficult, but worth it. Knowing a parent owns LTCi proves to be a balm and a source of extra piece of mind and security for all involved.
Here is Tobe’s excellent blog:
According the the American Association for Long-Term Care Insurance, long-term care insurance (LTCi) companies paid $8.15 billion in claim benefits to 260,000 policyholders in 2015. That number is 4% more than what was paid out in 2014. We are all living longer, and though your clients hope to never have to use their policies, the good news is that policyholders and their families are benefiting from owning this important insurance protection. When the rubber hits the road, LTCi policies are paying out!
With that in mind, many advisors encourage their clients to have “the long-term care conversation” with their adult children. It’s not an easy conversation, but it is an important one. Having this conversation early allows adult children to know that their parents have thought things through and have a plan in place. Among other things, breaking the ice by having this conversation early allows adult children to know their parents own LTCi policies. The reality is that in most instances it will be the adult children who will be involved with filing the initial LTCi claim and, in many cases, supervising the care that will be required over time. Adult children want to learn what their parents have in mind. Owning a LTCi care policy should never be kept a secret!”