Long-Term Care (LTC) Planning is often seen as something to address later in life, commonly associated with discussions about Medicare, retirement healthcare, nursing home costs, or concerns about aging parents. However, the reality is quite different. Nearly 40% of those receiving LTC services are under the age of 65, suggesting that advisors should reconsider how they position LTC Planning with their clients.

It may be dated, but an article in ThinkAdvisor discussed how The American Association for Long-Term Care Insurance (AALTCI) found that among the four LTC plan providers surveyed, "young female claimants ranged in age from 28 to 42 when they implemented their plans, and from 28 to 46 when they filed their claims. The benefits paid in connection with these claims ranged from $107,500 to $730,200. Young male claimants ranged in age from 21 to 38 when they implemented their plans, and from 24 to 38 when they filed their claims. The amounts paid in connection with these claims ranged from $92,500 to $703,000."

Not surprisingly, the insurance industry is witnessing a growing number of younger individuals purchasing LTC insurance, both individually and through their employers.  Contrary to the belief that younger consumers are not keen on implementing LTC plans, evidence suggests otherwise. The average age of consumers implementing LTC plans in 2020 was about 57, compared to age 67 just a decade ago.   Furthermore, a recent 2022 Milliman LTC Survey indicated that 52% of those who purchased Long-Term Care Insurance in 2021 were between the ages of 40 and 59, a 2.5% increase from 2020 numbers for the same age groups. Just over 24% of those obtaining Long-Term Care Insurance were aged 60 to 69, down from 41% in 2020.

AALTCI Executive Director Jesse Slome states, “People often mistakenly associate Long-Term Care solely with nursing home care required by the elderly. Younger individuals may have accidents or be diagnosed with health conditions that necessitate care for months or even years.” He also notes that younger claimants may use their LTC coverage to pay for home health care or community-based care, such as adult daycare, rather than nursing home care.

For instance, actor Christopher Reeve's life changed dramatically after a horse-riding accident left him paralyzed. His need for extensive and long-term care highlights the unpredictability of life and the importance of early LTC planning. Similarly, Seth Rogen has become a vocal advocate for caregiving, inspired by his mother-in-law's battle with Alzheimer's. His work emphasizes the emotional and financial strain caregiving can place on families without adequate planning. Additionally, Bruce Willis's recent diagnosis of dementia brings to light the critical need for planning for potential cognitive decline, which can affect individuals and their families at any age.

As financial planning evolves, many younger consumers are implementing LTC plans using alternatives to traditional, stand-alone LTC insurance. Recent sales data points to the growing use of hybrid life insurance or annuity solutions to provide LTC benefits. These versatile solutions allow for planning for a variety of life's unexpected events using a single plan.

The advisory community should encourage its younger clients to start the LTC planning process early, and quantifying future LTC needs using a HALO Assessment is an excellent first step! By making this necessary transition in their practice, advisors can help clients prepare for the future and ensure they have the care they need, no matter what life brings.

Maximize your clients' options and discuss Long-Term Care Planning as early as possible.....

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