As a benefits broker, staying ahead of trends in Life Insurance with Long-Term Care (LTC) is more important than ever. With rising demand, shifting market dynamics, and new legislative changes, brokers have a unique opportunity to educate clients on the best coverage options. Here’s what you need to know about the latest industry developments and how they impact you and your clients.
The Growing Need for Long-Term Care Coverage
A staggering 70% of individuals aged 65 and older will require some form of long-term care during their lifetime. Despite this need, only 3% to 4% of individuals over 50 have long-term care insurance. This gap presents a massive opportunity for benefits brokers to introduce hybrid Life Insurance with LTC policies as an innovative and flexible solution for employees of all ages.
Challenges in the LTC Insurance Market
Traditional long-term care insurance has faced significant premium hikes, making it less affordable for many policyholders. For instance, Genworth Life Insurance policyholders have seen up to 143% increases in their premiums. These steep price jumps highlight the importance of steering clients toward more stable and cost-effective options, such as hybrid life insurance policies with LTC riders.
The Rise of Hybrid Life with LTC Solutions
To address affordability concerns, hybrid policies—which combine life insurance with long-term care benefits—are becoming the go-to choice for many. These policies offer a guaranteed benefit: either as a payout to beneficiaries if long-term care isn’t needed or as coverage for care expenses if it is. This flexibility makes hybrid policies a win-win solution for employees planning for the future.
Legislative Changes Impacting LTC Insurance
Keeping up with legislative changes is crucial for brokers advising clients on their LTC options. Here are some key developments:
Federal Initiatives
In June 2024, the House of Representatives introduced the “Improving Access to Long-Term Care Insurance Act” (H.R. 8820). This bill proposes an above-the-line deduction for LTC insurance premiums, making coverage more accessible and affordable. If passed, this could encourage more employees to invest in LTC coverage.
State-Level Actions
Several states are actively exploring LTC legislation:
- New York: Bills A 1499 and S 1179 propose a state-run long-term care trust program similar to Washington’s WA Cares Fund. These bills include exemptions for individuals with private LTC coverage, making it crucial for brokers to help clients secure their policies.
- Connecticut: The proposed CT S 184 seeks to implement a tax credit for LTC insurance premiums and new consumer protections to increase transparency.
- Massachusetts: MA HD 574, introduced in early 2025, aims to create a tax credit for long-term care insurance, though further details are still pending.
- Oregon: OR S 34, introduced in January 2025, requires the Department of Human Services to study long-term care solutions and issue a report by September 2026.
These legislative developments reflect a growing awareness of the importance of long-term care planning. As a benefits broker, staying informed will allow you to help clients navigate potential tax incentives, exemptions, and employer-sponsored coverage options.
What This Means for Benefits Brokers
As a broker, you are more critical than ever in helping clients make informed decisions about their long-term care planning. Here’s how you can add value:
- Educate employers and employees about the advantages of hybrid Life with LTC policies over stand-alone LTC insurance.
- Highlight cost-saving strategies like purchasing policies at younger ages to lock in lower premiums.
- Stay updated on state mandates to help clients navigate potential tax implications and coverage alternatives.
The Bottom Line: Secure Your Clients’ Future Today
The landscape of Life Insurance with Long-Term Care is changing rapidly. Employees need reliable options that offer affordable, long-term financial security, and hybrid policies provide that peace of mind.
Ready to help your clients future-proof their financial well-being? Contact The VB Shop today to explore customized Life with LTC solutions for your clients.