Long-term care: Your next voluntary or group benefit option?

Published on Thu, 06/18/2015 - 00:18

Unless you’re lucky enough to be independently wealthy, you have financial stresses in your life – and your employees are no different. In fact, according to “Financial Wellness: Addressing the 9 to 5 Impact of 24/7 Financial Stress,” an August 2013 white paper by Purchasing Power, 44 percent of full-time employees in the U.S. are stressed about personal finances during work hours. Those stresses can run the gamut from paying next month’s rent to having enough for retirement. But one of the most common money worries might surprise you.

Did you know that one out of three Americans are either currently providing long term care for a loved one or expect to in the future?

That’s one of the findings of a new study by Northwestern Mutual that examines how prepared Americans are when it comes to long term care (LTC) planning. Unfortunately, Americans in general are woefully unprepared for their own LTC needs or those of elderly parents or other family members. According to the study:

  • Fewer than one third (29 percent) have addressed the need for LTC in their own retirement plans, while slightly more than a third (37 percent) have discussed their own preferences for LTC with friends and family.
  • Among those who are supporting both an elderly relative and a child younger than 18, only 22 percent aged 45-54 have addressed LTC in their retirement plans.
  • 56 percent of future caregivers cite the impact on their budgets and retirement plans as a major concern of providing LTC for a loved one.
  • Of the 61 percent of respondents who have some idea of how they would pay for LTC, more than half (35 percent) would rely on their savings.

Why are these statistics so alarming? Because 70 percent of us will need some type of LTC after age 65, and LTC is more expensive than many people realize.

Those are two great reasons to offer Long Term Care Insurance as a voluntary or group benefit option. Actually, it’s a huge win-win for employers and employees:

For employees, having LTCi as part of their benefits can:

  • Soften the blow of LTC costs for them and their families
  • Provide LTC coverage at a discount if it’s a group plan
  • Help protect their retirement savings
  • Give them the freedom to make their own decisions about care instead of relying on family or the government
  • Boost their confidence about their financial future
  • Demonstrate that their employer is genuinely concerned for their financial well-being

For employers, offering group LTCi can:

  • Enhance your benefits package with a voluntary benefit that provides coverage not found in medical or disability insurance
  • Help you recruit and retain the best talent
  • Lead to increased worker productivity, lower absenteeism, and lower healthcare costs
  • Give your workers access to resources that will help them manage LTC situations
  • Allow you to deduct any contributions to LTCi premiums as a business expense
  • Offer tax incentives and simplified health underwriting standards
  • Provide potentially life-changing benefits for your employees at no cost to the company

LTCi: a much needed and desired benefit

Long term care insurance is your employees’ best hedge against the financial struggles of long term care. Without it, they’re putting all of their other assets at risk. Also, employees want this benefit! They’ve not only shown greater interest in LTCi in recent years, but many now consider the benefit as important as group life or disability insurance. So why not add it to your benefits offering? It’s the perfect way to help them fill that gap, and a great way to position your company as one that genuinely cares for its employees’ financial health.

Want to learn more? Talk to the experts at Heffernan Insurance Brokers’ Benefit Advisory Services