This LTCi carve-out design will cost the employer less, provide increased benefits to the employee, and make you, the producer, more!
Our practice is primarily focused on employer-funded long-term care insurance and these types of cases account for approximately 75% of all new cases in our firm.
Three years ago, we introduced a program design that provides employees additional funded benefits, saves the employer money, and increases the producer’s overall placed premium.
Quite simply, we have the employer fund the cost of Shared Care for the employee [only] if the spouse/partner decides to enroll on a voluntary basis. Shared Care allow couples to share in each other’s benefits should one spouse/partner deplete his or her benefits; also, the surviving spouse / partner will inherit any unused benefits from the deceased spouse/partner.
The cost of adding Shared Care is outweighed by the increased discount resulting from now insuring both spouses/partners. On the platform we use from Transamerica, the cost of Shared Care is 7.5 – 22% depending of the length of the benefit period; the longer the benefit period, the lower the cost for Shared Care. The discount for one spouse/partner buying is 15% but it goes to 30% – a relative discount of 17.6% – if both spouses/partners buy.
Provided the employer-funded benefit pool is at least the equivalent of two-and-a-half years, the resulting premium is lower if the spouse/partner is also enrolled therefore saving the employer money.
The inclusion of Shared Care drives the communication & conversation toward spouse/partner coverage and as a result we have increased our spouse/partner participation by 94%. Consequently, the increase in voluntary participation from spouses has led to an increase in premium per case of about 20% while saving the employer on average 7% in premium.
This works. Steal shamelessly.