Long-Term Care
Why LTC Is the Next Generation of Employee Benefits
by Maria Marcovecchio

Long Term Care (LTC) insurance producers are finding a growing market in small and medium sized businesses. Employers are now asking their benefit brokers for LTC coverage. These firms are responding well to the message that providing LTC as an executive benefit protects the assets of key employees, provides permanent and portable coverage, and offers significant tax benefits to the company and the executive.
   Benefit brokers are finding that retirement planning is one of the most important issues on employees’ minds. Interest in LTC coverage is growing as the costs of long-term care services are increasing at nearly double the inflation rate. These skyrocketing expenses include the cost of nursing homes, assisted-living-centers, and home health care.
According to the American Health Care Association, nearly half of all Americans will need long-term care at some point; although how long they will need it varies from person to person. The average nursing home stay ranges from less than a year to about two years. However, long-term-care needs can extend well beyond a nursing home and into assisted living facilities or one's own home, often lasting for many years. The average person can wipe out their entire life savings in a few short years, often leaving the surviving spouse impoverished.
   Although it’s not for everyone, the cost of long-term-care insurance can be appropriate for many. A long-term care policy can protect the assets of people with a few hundred thousand in savings to those with a couple of million dollars. It can give their families peace of mind and provide dignity and choice during one of the most difficult times in life.
Many Baby Boomers are watching their own parents deal with the complexity, expense, and heartaches of long-term-care. According to insurers, the average age of a policyholder has fallen from the high 60s and 70s a decade ago to the late 50s today. As a result, LTC insurers are increasing their marketing efforts to this group believing that these Baby Boomers will gravitate increasingly toward LTC policies for
their own peace of mind.

The Employee/Employer Concern

More than 72% of employees identified retirement issues, education, and finances as their top priorities, according to a recent survey by Prudential Financial. Nearly half of the benefit managers surveyed expect their companies to take significant steps to improve retirement education by 2010.
   So, how do you take advantage of this exploding opportunity? Start by creating a list of target businesses with key contacts. Remember to start small; the most successful worksite cases range from three to 150 lives. Organizations with the highest participation tend to come from law, government, chemical companies, colleges and universities, energy companies, and financial services firms. Those with mid-range participation include advertising and marketing, retail, manufacturing, aerospace and defense, publishing, biotech, and technology. Low participation groups include small associations and educational centers.
   The next step is creating a marketing plan to target these companies. When building your plan, remember that employers want to know what’s in it for them. Employers need to make sure that offering LTC makes good business sense, whether it is through having favorable tax savings or maintaining high productivity.
No matter how hard you work the group, it is doomed to fail without the employer’s full support. Gaining access to employees during working hours is vital to success. Being able to e-mail dates for seminars and meetings to the employees is important for strong participation.

Enrollment Options

A payroll deduction option increases participation. Limit the choices to two or three options. Participation tends to decrease with each additional choice that employees must make.
Every good employee benefit package should consist of the following:
• Healthcare protection – employer–paid medical and dental.
• Income protection – employer-paid short-term and long-term disability.
• Asset protection – employer-paid or voluntary long term care insurance
Remember to keep it simple for the employer and employee and don’t quit your day job. Group LTC business can be very profitable in volume, but it can also take as long as six months to generate business.
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Maria Marcovecchio is executive vice president of Long Term Care at M&O Marketing. From product positioning to sales tools that work, Maria is dedicated to providing long-term-care producers with the tools they need for success. For more information, call 800-228-596.