As benefits brokers, you’re always searching for products that provide comprehensive value to your clients and their employees. Hybrid life insurance with long-term care (LTC) riders is one such product gaining traction. These policies combine the death benefit of life insurance with long-term care coverage, providing significant financial security for policyholders. But what exactly makes these products so appealing?
1. Guaranteed Benefits for Policyholders
One of the standout advantages of life insurance with LTC is that 100% of policyholders will receive a benefit. Whether through life insurance payouts or long-term care benefits, these policies guarantee that policyholders—or their beneficiaries—will see value, regardless of whether they need long-term care. This differs from stand-alone long-term care insurance, which only provides benefits if care is required, often leaving policyholders with no return if they remain healthy.
2. Affordability and Stable Premiums
Hybrid life with LTC products are generally more affordable compared to stand-alone long-term care insurance. They also tend to offer level premiums, meaning clients won’t face unexpected cost increases over time. For businesses, this makes budgeting for benefits more predictable, while employees can count on long-term affordability. This is particularly important as premium hikes are a common challenge with stand-alone LTC policies.
3. Accumulation of Cash Value
Many life insurance with LTC policies allow cash value accumulation over time. This feature makes the policy more versatile, as it can serve as both a source of financial protection and a savings vehicle. This appeals to employees looking for more than just long-term care coverage—it’s a multi-purpose solution that grows in value over the years.
4. Flexibility and Portability
Life insurance policies with LTC riders offer portable coverage. This flexibility is especially important in today’s workforce, where employees often change jobs and may need to maintain their coverage independently. With portable benefits, employees won’t lose their coverage when transitioning to new employers, giving them peace of mind and ensuring they are protected regardless of their employment status.
5. Simplified Underwriting and Guaranteed Acceptance
Unlike traditional LTC insurance, which often requires detailed medical underwriting, hybrid policies typically offer simplified underwriting and guaranteed acceptance. This means more employees can access the coverage without worrying about disqualifications due to their health or family medical history. This makes these policies more accessible to a broader pool of employees, enhancing the value of the benefits package.
6. Indemnity-Based Coverage
Hybrid life insurance policies with LTC benefits often operate as indemnity products. This means that benefits are paid out regardless of the actual cost of care, offering greater financial flexibility. Additionally, these policies may cover informal care, such as assistance from family members, which traditional long-term care insurance policies often exclude.
The Benefits for Employers
For employers, offering hybrid life insurance with LTC is a way to enhance their benefits package while controlling costs. These policies provide employees with much-needed security without the heavy financial burden of stand-alone long-term care insurance. As the need for long-term care continues to rise—70% of individuals over the age of 65 will require some form of long-term care during their lifetime, according to the U.S. Department of Health and Human Services—employers who offer this coverage position themselves as forward-thinking and supportive of their employees’ futures.
A Must-Have in Benefits Packages
Including life insurance with long-term care in your client’s benefits package offers a dual-purpose solution that addresses two major concerns: providing for loved ones and managing future care costs. This comprehensive approach to financial planning protects employees’ assets and positions your clients as employers who genuinely care about their workforce’s long-term well-being.
Conclusion
For benefits brokers, hybrid life insurance with long-term care products represents a growing trend that addresses a critical need in the market. By offering this solution, you’re helping your clients build robust, attractive benefits packages that provide financial security and peace of mind for their employees. Contact us today to learn how we can assist you in incorporating these valuable products into your clients’ offerings during Life Insurance Awareness Month.