Sales of linked-benefit long-term care insurance continue to outpace traditional long-term care policies. A new video library will provide meaningful information to prospective buyers.
“There is enormous interest in linked benefit long-term care,” states Jesse Slome, director of the American Association for Long-Term Care Insurance director. “Judging by the consumer inquiries we receive, there are also many misconceptions and some flawed information that we wanted to address.”
The Association has just launched an online video library that will consist of short informative videos focused specifically on hybrid or linked-benefit long-term care.
“Initial videos will address several of the commonly asked questions such as costs and benefits,” Slome explains. “But we will also address some of the information that seems to be lacking, such as the importance of requesting a specimen policy prior to buying coverage.”
The long-term care insurance expert says some of the initial programming will educate consumers about the difference between riders that qualify as long-term care insurance and those that are chronic illness riders. “Both have valid attributes but consumers are not aware of the important differences that can impact their ability to receive benefits down the road,” Slome notes. The different types of plans can be identified by asking which Internal Revenue Code applies to the plan provisions.
According to Slome, some 60 percent of all linked-benefit policies purchased in 2021 met the criteria for chronic illness.
“When consumers pay a lot of money to get coverage for anticipated long-term care needs, it is incumbent upon the industry to make sure they are not disappointed,” Slome advises. “The last thing an industry needs 20 years from now is a legion of class action lawsuits from consumers frustrated because situations they believe qualify for benefits do not meet the contractual definitions.”
“One of the prevalent misconceptions is the belief that linked-benefit long-term care costs about the same as traditional LTC,” Slome shares. “In fact, there can be a sizable difference.” According to the Association’s 2022 Long-Term Care Insurance Price Index, a 55-year-old male could pay around $2,200 annually. That premium would purchase a maximum long-term care benefit of $464,300 when he reaches age 90.
“By comparison, a linked benefit policy would cost that same 55-year-old male $6.710-a-year,” Slome reports. In this instance the individual would be eligible for $455,300 at age 90. “It’s true that linked-benefit coverage costs more but it also does double duty and some people value that.” In this case, the policy would provide a minimum death benefit of $167,000.
On launch-day, the Association posted three videos each addressing a different topic. “The goal is 25 by mid-year,” Slome acknowledges. Each of the videos will be between five and six minutes, the length preferred by consumers surveyed by the organization.
To access the linked-benefit long-term care insurance video library visit the Association’s website.
Jesse Slome is director of the American Association for Long-Term Care Insurance. AALTCI advocates for the importance of long-term care planning and supports insurance professionals who market both traditional and linked-benefit LTC solutions.