Requesting feedback/opinion on Long Term Care Insurance...

[Guest TamraCS]

I work for a large retailer with about 30,000 eligible employees and a fairly 'young' demographic. We're looking at a single source billing voluntary package and have thought about including Long Term Care (in addition to Pre-paid legal and financial planning) to start off. My concern is whether or not the Long Term Care insurance would be beneficial or 'worth it' to our employees. Any opinions/feedback/experience would be appreciated.

[Michael Devault]

We've been involved in selling LTC for about a year now. From our experience, younger people are not too interested in Long Term Care benefits... they're more interested in saving (and spending) money. It's not until they reach their 50's where LTC seems to have any interest.

If you have a fairly young group, LTC may not be appealing to them, in my opinion. (If there's any way you could get the information to their parents, however, you might have an opportunity.)

Hope this is of some benefit to you.

[Guest Carolyn Kates]

I have been selling long term care insurance to individuals for over three years and I felt so strongly about long term care insurance being purchased by "younger" people that I started my own company with the sole purpose of introducing long term care insurance to the business community, as an employee benefit. I found that too many people "wait" until they're 65y/o or older and find that they can't afford the insurance or they can't qualify due to pre-existing health conditions.

After a year of working with businesses and their employee benefit specialists, I have found that more and more "younger"(45-50 year olds)employees are requesting long term care insurance as part of their benefit plan. Many of those employees have already experienced, first hand, either with an ill parent or relative, the emotional and financial devestation that a long term care illness can cause. It is my belief that the current low participation in voluntary long term care benefit plans is due to lack of education(an AoA study released last week supports my belief)on why long term care insurance is, more than ever, an essential benefit. LTC insurance actually protects employees retirement savings and is an important part of any financial plan.

Finally, what most people are unaware of is that 40% of those individuals receiving long term care today are under the age of 65y/o!! I commend you for investigating long term care insurance as a voluntary benefit for your company and am certain that within the next two to five years, long term care insurance will be become a part of most businesses' benefit packages.

If you would like a copy of the study I referred to or more studies related long term care insurance and the workplace, please e-mail me.

[Guest alccpc]

I am trying to figure out if long term care is an acceptable investment in a 401(k) plan (provided it meets the incidental requirements)-I am coming up with the answer that it is acceptable-any thoughts or feedback????/

[GBurns]

I would seriously question anyone who thinks that it is acceptable.

I think that your state Dept of Insurance would certainly have something to say about LTC or any insurance product being sold or promoted as an investment.

You treat the incidental requirement very casually as if it is a secondary thought or concern. It is the first and most important issue. If any product or item does not satisfy the incidental requirement it could not be used regardless of how good it is.

Have they given you any cites or authority to support their position?

[Ron Snyder]

Term insurance is not a particularly good "investment" but can be used inside a retirement plan (subject to the incidental benefit rule).

Disability income benefits can likewise be provided under a plan whether through insurance or not.

My concern is not whether long-term care insurance can be provided as an incidental benefit but whether such a benefit, being medical in nature, could only be provided through a 401(h) account. That might put a crimp on your ideas.

On the other hand, a plan that already has a 401(h) account should certainly be able to provide LTC coverage by using funds in that account to purchase to policy.