Seasonal Uptick in Long-Term Care Planning Highlights Advisory Opportunities

Long-term care (LTC) planning sees increased attention during the holiday season and early months of the year, with OneAmerica Financial reporting a 20% increase in LTC claims in November and December. Financial advisors note that family gatherings often prompt discussions about the need for LTC coverage, reflecting consumer concerns about future care needs. A significant portion of Americans recognize the likelihood of needing LTC; a OneAmerica study found 74% acknowledge this possibility, and 64% consider it a planning priority, though only 33% feel confident in their current arrangements. The U.S. Department of Health and Human Services reports that 56% of Americans turning 65 will require LTC services. Despite this, industry data from Limra indicates a low adoption rate of LTC insurance, with only 3% of Americans over 50 having coverage. The financial burden of LTC is substantial, with average out-of-pocket expenses around $140,000, and a notable fraction spending over $100,000 or even $250,000. Medicare does not cover LTC costs, underscoring the importance of private insurance or alternative financial planning. Consumers increasingly seek professional advice to navigate LTC options, with 44% expressing the desire for support when selecting coverage. Advisors emphasize the value of initiating LTC discussions early, especially as hybrid products combining life insurance and LTC benefits gain popularity for their flexibility and affordability. Experience with caregiving impacts consumer attitudes toward LTC planning. Data from Limra shows that over 70% of caregivers reassess their own future care needs after caregiving experiences, driving proactive planning efforts aimed at reducing the family burden and emotional stress. LTC products vary widely, including stand-alone LTC insurance, life insurance with LTC riders, critical illness policies, and annuity-based options. Market share favors hybrid life insurance/critical illness products, comprising 67%, while traditional LTC insurance accounts for 8%. Advisors recommend choosing products based on individual anticipated needs and stress the benefit of starting coverage at a younger, healthier stage to reduce premiums. Recent industry trends show renewed product innovation and integration of caregiver and wellness support services, with carriers identifying innovation as a key growth driver. Improved pricing models and more extended premium payment options have made LTC insurance more accessible. Younger Americans (ages 40-49) demonstrate higher prioritization of LTC planning compared to older cohorts, though confidence in plans decreases with age. Advisors caution against delays in purchasing LTC insurance, highlighting the increasing costs and insurability challenges with advancing age. Perceived cost and competing financial priorities remain barriers for many consumers. However, experts note that modern LTC insurance products are more affordable and flexible than in the past, potentially offering financial protection and emotional peace of mind. Financial professionals view LTC insurance as a critical legacy protection tool, especially given rising care costs and longer claim durations driven by increased cognitive decline incidences. They advocate education and early engagement to help clients assess options and incorporate LTC planning into broader retirement strategies. This analysis underscores the evolving landscape of LTC insurance, emphasizing consumer demand for tailored solutions and advisor guidance amid demographic shifts and market innovations. The seasonal surge in LTC inquiries presents opportunities for insurance professionals to foster meaningful client conversations and advance LTC readiness.