Short-Term Care Insurance: A Top LTCi Alternative for Clients

Say your client wants long-term care insurance, but their application is declined due to their age or health or they simply can’t afford the premiums. Fear not! Short-term care insurance is another solution!

If you sell long-term care insurance plans, you should offer short-term care insurance plans as well. Not familiar with that form of coverage or when to recommend that a client go with STCi instead of LTCi? We’ll fill you in.

Listen to this article:

What Is Short-Term Care Insurance?

Short-term care insurance (STCi), also recognized as short-term recovery care insurance, is one of the best long-term care insurance (LTCi) alternatives. It too offers coverage for nursing home stays, assisted living, and home health care. The biggest difference between LTCi and STCi is that STCi plans generally cover one year of qualifying care or less, as opposed to LTCi plans which can cover care for one year to an unlimited amount of time.

STCi also offers coverage for nursing home stays, assisted living, and home health care!

Many STCi policies have a 0-day elimination period, which allows beneficiaries to start receiving benefits the first day they qualify for them. They can also have more lenient underwriting, higher issue ages, and lower monthly premiums than LTCi policies. Some STCi carriers will only ask a couple of health-related questions, issue up to ages 84 or 89, and/or offer plans under $50 per month, as well as other incentives, like help with prescription drugs.

Who Are the Ideal Clients for STCi?

The Department of Health and Human Services reports that 70 percent of individuals will need some form of LTC after turning 65 years old. However, did you know the American Association for Long-Term Care Insurance (AALTCI) found that approximately 41 percent of LTCi claims don’t last longer than one year?

Did you know many LTCi claims don’t last longer than one year?

We’ve already identified who makes an ideal LTCi client on the Ritter blog. Here are the characteristics of ideal STCi clients:

  • Desires a cheaper alternative to LTCi
  • Is too old to qualify for LTCi
  • Has health issues
  • Has been declined for LTCi
  • Is a single woman (STCi rates are not gender-based like LTCi rates)

The AALTCI reports 90 percent of STCi buyers were age 60 or older in 2015. Keep that, in addition to the characteristics above, in mind as you’re determining if someone fits into the STCi client profile.

How to Decide If Your Client Should Buy LTCi or STCi

With all the LTCi and STCi products on the market today, you can now offer your clients multiple solutions to the ever-increasing cost of care for nursing home or home health care services. While a variety of options allows you to better accommodate the unique needs of clients, it can make it difficult to determine which product is the right fit for certain situations. If you’re stuck deciding between LTCi and STCi, always look at your client’s age, health, and budget to help you decide which is the best option.

Looking at your client’s age, health, and budget helps you determine if LTCi or STCi is the best option.

An STCi policy can provide clients who cannot qualify for or afford LTCi with at least some coverage. If your client can qualify for LTCi, whether or not they should buy it comes down to what types of benefits they want and how much they’d be willing to pay for them. And remember, if your client does purchase LTCi, they can also buy an STCi policy to cover its elimination period.

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STCi policy sales have been on the rise, and we expect them to continue to grow. These types of plans can open doors for individuals who might have otherwise assumed they were closed. Add these plans to your portfolio, and you’ll be the one with the sought-after key!

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