As people live longer, the likelihood they will need some assistance with activities and daily living is higher. In fact, it has been reported that 70% of people who survive to age 65 will be in need of some type of long-term care services as they age.
Long-term care (LTC) insurance can help fund support and services for long-term care—making it an extremely important benefits option for employers to consider.
What is Long-Term Care Insurance?
Long-term care insurance (LTCI) refers to a variety of services that aren’t typically offered through regular private health insurance policies or Medicare.
Long-term care insurance typically covers services that assist people with chronic medical conditions or disabilities in managing daily activities and tasks such as dressing, eating and bathing. It also includes care provided in a variety of places, such as:
- At-home care
- Nursing homes
- Assisting living facilities
- Adult day care centers
Types of Long-Term Care Insurance (LTCI):
- Traditional long-term care insurance: A straightforward, standalone policy covering expenses only related to long-term care services and support. Like other types of traditional insurance, policy holders choose how much coverage they would like, pay premiums based on their coverage and make claims if a covered expense arises.
- Hybrid long-term care insurance: Another option is a life insurance policy paired with a long-term care rider. In this case, adding a long-term care rider could allow an individual to use a portion of their death benefit to pay for long-term care. The death benefit is reduced by the payout on LTC claims.
- Linked benefit policy: This policy, which is also known as asset-based long-term care insurance, combines long-term care coverage with another type of insurance such as life or annuity. The asset-based LTCI is a fixed premium policy that provides LTC coverage along with a small death benefit. Premiums are guaranteed never to increase, and the insured will know the exact amount of monthly LTC benefit available.
Why Should Employers Be Offering Long-Term Care Insurance?
- Support recruitment, retention, and employee well-being: Long-term care insurance can be a powerful tool for attracting and retaining top talent—especially among executives and senior staff. By offering LTC coverage as part of a benefits package, employers demonstrate a commitment to their employees’ long-term financial security and health, helping to build loyalty and reduce turnover.
- Enhance your benefits offering without increasing costs: Many LTC solutions are voluntary, meaning employees can opt in and pay premiums themselves. This allows employers to expand their benefits portfolio without adding to their bottom line, while still offering meaningful protection that employees value.
- Protect employees and their families: LTC insurance helps employees prepare for future care needs, reducing the financial and emotional burden on their families. Offering this benefit shows that the employer cares about the whole person—not just their productivity at work.
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