Long-term care insurance is a tricky one. On the one hand, your standard medical benefits might cover any of many debilitating illnesses or conditions that affect your everyday quality of life. On the other, they might not, and if they don’t then you’ll be left footing the bill on expensive but essential treatment just to enjoy a normal quality of life.
The conundrum is further complicated for employers. Do your employees need access to this type of care, or are you squandering budget funds on needless plans that are left untouched, untapped, and unneeded quarter after quarter?
Discussing it with one of Employee Retention Benefits’ qualified professionals is a great first step in determining if long-term is a good move for your company.
Here are the most common types of long-term care insurance to help acquaint you in the meantime.
Traditional Long-Term Care Policies
An insurance policy may be as cookie cutter or specialized as your needs and employees’ needs dictate. The traditional long-term care policy is generally the standard option when discussing logistics on this special subsect of insurance.
The cost of this plan depends entirely on the employee’s age when they enroll, the length of time before the policy pays out once long-term care is determined as a requirement, and whether or not the plan includes inflation protection.
They’re generally good policies because they require little upfront investment but, as with most insurances, the premiums are lost forever if there is never a need for long-term care. In addition, the premiums regularly increase over time at a rate that is difficult to predict.
Traditional policies offer peace of mind, but they come with risk.
Hybrid Long-Term Care Policies
Hybrid long-term care policies differ from traditional policies because they require substantial upfront investment. The initial cash outlay sometimes may be paid in installments or through financing, but can at times be as much as $100,000.
Once the investment is made, employees receive long-term care benefits for a specified duration. Optional inflation protection can be added to the plan as well, providing some cost management.
While it’s costly upfront, the employee’s heirs may recoup a vast portion of the money if the employee never needs to use the policy. This mitigates some risk and makes it a great overall option.
Is long-term care right for your business?
Often, employers offer medical and some form of financial planning like a 401(k). Dental, vision, life, and other forms of insurance and benefits were once considered niche, but more employers are coming on board with a full array of benefits administration, packages, and plans for their employees in our modern marketplace.
A great benefits package is all you need sometimes to eke out a top-tier distinction in your industry and attract the best talent and keep it.
Relatively speaking, long-term care insurance is affordable for employers and could be the tipping point between a good job and a great job for the employee.
Contact the pros at ERB today to find out if long-term insurance benefits are right for your business’ benefits package.