As states across the U.S. consider implementing long-term care (LTC) mandates funded by payroll taxes, businesses and employees face new challenges in planning long-term care. The Voluntary Benefit Shop’s recent webinar, featuring experts from Allstate Benefits, sheds light on this evolving landscape. The focus was leveraging Whole or Universal Life insurance policies with LTC riders to strategically respond to these impending legislative changes and prepare for end-of-life expenses post-retirement.
Understanding the Legislative Landscape
The push for state-mandated long-term care programs, exemplified by Washington’s Cares Fund, has created a sense of urgency. This program, funded by a 0.58% mandatory payroll tax, offers limited benefits and lacks portability, highlighting the need for more comprehensive and flexible solutions. Other states, such as New York, Pennsylvania, and California, are considering similar legislation, making it imperative for companies to seek alternative coverage options proactively.
Advantages of Allstate Benefits’ Life with LTC Rider
Allstate Benefits’ life insurance policies with an LTC rider provide a robust alternative to state-mandated programs. Unlike the rigid structure of state plans, these policies offer flexibility and control over benefits. Including an LTC rider enables employees to opt out of state programs while securing better long-term care coverage.
In 2021 alone, Allstate wrote 70,000 lives with LTC policies in Washington, demonstrating the demand for such products. These policies are attractive to a wide range of employees, especially those who might pay more in taxes than they would receive in benefits or those planning to retire outside the state.
Product Features and Benefits
Allstate’s Whole and Universal Life insurance policies with LTC riders offer distinct advantages. Whole Life insurance is stable, with guaranteed coverage up to age 121 and benefits paid up to age 95. Universal Life insurance is more flexible and cost-effective, though it requires more active management.
The LTC rider in these policies is particularly advantageous. It provides an indemnity-based benefit, paying out a percentage of the long-term care coverage for a set period, which can be extended. Recently, Allstate introduced a 6% payout option for 17 months, on top of the standard 4% for 25 months, to meet the rising costs of long-term care. This flexibility allows policyholders to access more funds earlier in their care, a critical factor given the escalating costs of long-term care facilities.
Case Studies – Practical Application
The webinar highlighted several case studies demonstrating the successful implementation of Allstate’s products. For example, a trucking company in Washington State provided its employees with $100,000 in guaranteed issue coverage, resulting in significant enrollment and premium generation. Another case involved a technology company that offered similar coverage, leading to substantial participation and future business prospects.
Conclusion
The impending state LTC payroll taxes present a significant challenge, but they also create opportunities for businesses to offer their employees more comprehensive and flexible long-term care solutions. Allstate Benefits’ Life insurance with LTC riders provides a viable alternative, combining life insurance security with the necessary coverage for long-term care.
For businesses and brokers looking to stay ahead of these legislative changes and provide valuable employee benefits, partnering with The Voluntary Benefit Shop to implement Allstate Benefits’ life insurance with LTC riders is a proactive and strategic step. Contact us for more information and to begin planning for your organization’s future needs.