The Credit Union Connection to Long-Term Care Insurance

By Jane Chesbro, Vice President of Specialty Distribution and Operations, CUNA Mutual Group

Long-term medical conditions that require daily assistance are major destroyers of wealth, so it seems natural for credit unions to help inform members about options for long-term care (LTC) insurance.

But it’s not just about money.

LTC insurance can also give members more freedom to choose how and where they’ll receive care, and relieve some of the day-in, day-out burden on family members.

Think of LTC insurance as a product that protects savings, investments, and other assets from catastrophic loss in the same way that auto and home insurance protect against losses to property and losses from liability claims. A key difference is that most members deal with auto and home insurance regularly, but they’ll probably need more guidance to compare LTC insurance coverage options.

By associating your trusted credit union brand with a reliable LTC insurance provider, you help members navigate the many protection options. You also create another potential bond that strengthens a member’s ties to your credit union.

Doesn’t Medicare Pay for That?

LTC insurance generally covers assistance people need when they lose the ability to perform three or more “activities of daily living” (ADLs) for an expected period of at least 90 days. ADLs are essential daily functions such as dressing, eating, and bathing.

Medicare, contrary to popular belief, generally doesn’t pay for these services other than for limited periods following a hospital stay. Medicare Supplement policies also don’t pay for LTC services. Medicaid does, but only after you’ve exhausted most personal assets—which usually doesn’t take long, given the steadily increasing LTC costs.

According to the MetLife Mature Market Institute’s 2012 survey1of LTC costs:

  • The national average rate for a private room in a nursing home increased by 3.8 percent, from $239 daily and $87,235 annually in 2011, to $248 daily and $90,520 annually in 2012. This is a 14.5 percent increase over the average rates in the 2008 survey.
  • For assisted living facilities, the national average base rate increased by 2.1 percent, from $3,477 monthly and $41,724 annually in 2011, to $3,550 monthly and $42,600 annually in 2012, which is 9.5 percent higher than the 2008 survey’s average rate.
  • Average costs in 2012 adult day services stayed the same as 2011 at $70 per day, but this is 8.6 percent above the average from the 2008 survey.

Help Educate Members About LTC Options

According to the National Clearinghouse for Long-Term Care Information website from the Department of Health and Human Services, it is estimated that almost 70 percent of those who reach age 65 will need LTC at some point in their lives. LTC insurance policies include options that provide for in-home care, and offer some respite for family members who become care-givers.

Consider allying with an LTC provider that will conduct in-branch seminars and offer collateral print materials and online education for members.

As the huge baby boomer generation reaches retirement age, more and more member families probably will be affected by long-term medical conditions. Help raise awareness about LTC insurance that can provide better care options while protecting a family’s long-term financial well-being.

 

Jane Chesbro is vice president of specialty distribution and operations for CUNA Mutual Group. Contact her at 800.356.2644, ext. 6658475, or at jane.chesbro@cunamutual.com.

Strategic Link is the NWCUA’s wholly-owned service corporation, providing the Association’s member credit unions with exclusive high-quality, competitively-priced products and discounted services. To learn more about how Strategic Link’s partnership with CUNA Mutual Group can benefit your credit union, contact NWCUA Director of Strategic Partnerships Craig Reed: 206.340.4789, creed@nwcua.org.

Posted in Around the NW, Community Impact, CUNA, Financial Education.