Your employees probably don’t think about needing long-term care (LTC), especially if they feel young and healthy. But now’s exactly the right time for you to help them plan for the future.
Baby boomers and successive generations will enjoy unprecedented longevity compared to previous generations. The upside is obvious. But there’s a downside: the number of chronic health conditions that can require costly long-term care. While most people conceptualize this need, they don’t have any LTC coverage. Meanwhile, employers may already offer group term life insurance to give employees extended benefits at the lower group premiums. There’s a way that banks can make this voluntary benefit more available and more portable — and even more attractive.
Many life insurance policies now offer riders or options that allow policyholders to access a portion of the death benefit to cover long-term care expenses. This flexibility allows policyholders to utilize the benefits of a life insurance policy to address potential LTC needs, so they can maintain financial stability and access quality care without depleting their assets.
This means banks can protect the financial future of employees with an affordable employer-sponsored LTC insurance program that:
- Protects employees’ retirement plan. An ounce of prevention now can avert the disaster that an LTC episode can bring to individual financial portfolios.
- Gives employees a choice about their care. Although Medicare and Medicaid may pay for some LTC costs, coverage may be limited.
- Eases the burden on employees’ family. LTC insurance allows family members to be involved in the caregiving process without being the primary provider.
Life with LTC can be a complex financial planning product. Banks interested in offering the product should find someone to help guide them through the various options and lead the implementation process. A 2019 study found that 74% percent of employees feel that LTC is important, yet 25% of their employers offer it. Offering it is a way to fill a gap in your benefits portfolio, which could help attracting and retaining top talent.
One of the advantages of incorporating life insurance with LTC into a retention strategy is the ability to offer employees customized plans tailored to their needs. This flexibility allows employees to select coverage levels, beneficiaries and additional features based on their individual circumstances. Providing employees with choices fosters a sense of ownership and engagement, which can enhance job satisfaction and loyalty.
How It Works
Employer-sponsored life insurance with LTC benefits offer fully portable term or permanent life insurance that helps protect employees’ families during their working years, and includes meaningful long-term care benefits if extended care is needed. These benefits can be structured in ways that provide additional incentives and tax advantages for employees. Additionally, certain life insurance policies offer cash value accumulation that employees can access during their working years for various financial needs.
Long-term care can be costly to your employees and places a huge burden on most families who need it. In fact, health and disability insurance doesn’t even cover LTC costs. Medicare isn’t always the answer, either. For most, it’s an out-of-pocket expense that drains retirement savings. Look at the stats:
- 70%: Americans 65 and older who will need LTC assistance.
- $108,405: Average national cost for one year in a skilled LTC facility.
- $20,028: Average annual Social Security benefit for retired workers.
- $97,200: Average 401(k) balance.
It’s important for banks to help their employees understand that LTC insurance is more affordable to them during their working years rather than later. Employer sponsored “hybrid” life insurance products with LTC riders can offer powerful coverage, underwriting concessions and additional benefits.
In today’s competitive employment landscape, organizations must go beyond traditional compensation packages to attract and retain top talent. Incorporating life insurance with LTC benefits into an employee retention strategy offers a range of advantages, from attracting and retaining talent to providing financial protection and flexibility. Recognizing the value of these benefits and investing in the long-term financial well-being of employees allows banks to position themselves as an employer of choice and build a loyal and engaged workforce.
Insurance services provided through NFP Executive Benefits, LLC. (NFP EB), a subsidiary of NFP Corp. (NFP). Doing business in California as NFP Executive Benefits & Insurance Agency, LLC. (License #OH86767). Securities offered through Kestra Investment Services, LLC, member FINRA/SIPC. Kestra Investment Services, LLC is not affiliated with NFP or NFP EB. Investor Disclosures: https://bit.ly/KF-Disclosures