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Businesses Can Play a Vital Role in Educating their Employees

Written By: Murray Gordon

Do you or your employees plan to “die in the saddle,” blazing away until the very end?

You just might. Certainly, most of us prefer the John Wayne finale to the alternative of making our last stand over a game of nursing home bingo. But even America’s toughest cowboy couldn’t script his own last scene, succumbing to cancer in 1979.

The reality is that after age 50, at least half of us will require long-term care - such as a nursing facility, assisted living or home care. The tab at a nursing facility averages $60,000+ a year in a metropolitan area or $5,000+ a month. Can you foot the bill?  Not many of us can.

Too many people work a lifetime building assets, only to see them decimated in a matter of years when a prolonged illness or disability strikes.   Most every business owner has first-hand knowledge of an employee who has gone through a spend-down of assets to cover long-term-care expenses.

The good news is that more people are doing something about it. In homes and work places across the country, long-term-care insurance (LTCI) is rapidly gaining favor. LTCI covers the devastatingly high costs associated with assisted living/nursing facility care, whether in a licensed facility or at home.

More than ever, the climate is ripe for employers to educate their employees about long-term-care insurance. LTCI is a hot topic that will only heat up as Americans age in huge numbers. And in today’s uncertain investment environment, Baby Boomers and their aging parents show signs of increased mistrust in Medicare, Social Security and even in private pension plans. Most of this population agrees that the one financial risk for which they haven’t planned is the upward spiraling cost of long-term care.

Consider this:

  • The number of people holding long-term-care insurance policies has tripled in the last decade, to over 8 million.
  • The federal government started offering it to 20 million eligible civil servants. As the nation’s largest employer, the government sets the tone for the rest of the industry.
  • A survey of more than 500 human-resources professionals by the Society for Human Resources Management found that 48 percent of their companies were offering long-term-care insurance as a benefit, up from 33 percent.

By bringing LTCI to your employees attention, you’re giving your staff one more reason to trust you and maintain a strong relationship with you.

Workers often are more comfortable receiving insurance information from their employer rather than from an agent mailer or phone solicitation. They appreciate the no-pressure, educational value of the information.

Baby Boomers, particularly those in their late 40s and 50s, are a good target market for a couple of reasons. They have assets they want to protect for their spouse or children and are savvy enough to be looking for ways to do that. LTCI is affordable for this group. People are usually healthier than they will be 10 years later, making them more insurable and at lower premiums. More affluent Baby Boomers who are concerned about how their aging parents are going to finance long-term-care may want to purchase a policy on their behalf.

Another valid reason to educate your staff is that many of your employees may falsely assume that Medicare or Medicaid will pay for long-term care. Coverage for long-term care is rare and extremely restrictive.

Some employees may be assuming LTCI is too costly for them, and that prevents them from looking into it. Recent tax law changes have made owning long-term-care insurance more affordable for most people. Benefits are not taxable.  Built-in inflation protection is available. Further, once a policy is in effect, the premium is level. Premiums are level and rates will not increase due to age or health changes. Also, policies can be designed to fit the needs of individual budgets. One policyholder, for instance, may opt for benefits to be paid at $500 per day while another opts for benefits to be paid at $50 per day. The coverage period can be anywhere from two years to lifetime. Many variables affect the policy price. Benefits are flexible to fit the costs in your area, whether rural or metropolitan.

Perhaps the most devastating assumption people make in not planning for long-term-care is, “It will never happen to me.” It’s always “the other guy” who will end up in a nursing facility. The super rich can afford it. The very poor have options, too. But what about the solidly middle-class? They need to protect their assets.

We may not be able to ride off into the sunset the way we want, but planning for long-term-care expenses keeps the reins in our hands for as long as possible. Even The Duke would tip his hat to that.

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