Insuring a Spouse For Free with LTCi, (well almost)

Presented by Tim Dreher

Nearly every day while working with insurance producers, I get a request to run an LTCi illustration for an individual quote for a person whom is either married or has a domestic partner. In these situations, I always ask why we are not quoting the other spouse/partner. The answers that I normally hear are either the spouse/partner is uninsurable or that the other spouse/partner is just not interested in purchasing LTCi.

I have noticed that the majority of these situations is a wife wanting LTC protection and a husband that either does not see the need or doesn’t want it because “I’ll never need it, I’ll drop dead first”.

Let’s face it, most caregivers in a long term care situation are women whom have seen it happen to a friend or maybe have even been a caregiver themselves and understand the value and need for LTC insurance.

Many of the LTC carriers we work with at Financial Brokerage offer a substantial discount for couples or domestic partners when both apply for coverage.

In those cases where the spouse/partner is insurable, I will suggest adding the spouse/partner to the quote at the minimum benefits available in order to take advantage of the spousal/partner discount.

It has been my experience that adding the spouse/partner at the minimum benefits results in a premium that is less for both spouses/partners than the cost for a policy where only one is applying.

For example, let’s look at a couple, female and male, both age 55, looking at a plan with a $5,000 per month benefit for her, 5 year benefit duration, and a 90 day elimination period with 3% compound inflation protection where the female wants coverage but the husband does not. I ran the illustrations with 3 of our most competitive carriers.

By adding the husband at minimum benefits ($1,500 per month for 2 years, with a 90 day elimination period and no inflation) the resulting savings were between 13% up to a whopping 37% savings over the price of quoting the female only. That is giving the benefit quoted above for the female spouse and the male (at minimum protection) for under the premium of what it would have been for her plan only.

The savings for a 3 year benefit (everything else the same) resulted in premium savings of between 21% on the low end to 30% savings on the high end.

LTC insurance carriers like couples and their premiums reflect it.

So the next time you’re in a situation similar to the one above, show your clients a great idea on how you can save them money on their LTCi premium while at the same time giving a reluctant spouse some coverage too.

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