How do I input long-term care insurance into Income InSight?

From the client information screen, click on the insurance folder, then click on add insurance.


ltci demo - V2


In this demo, I'm going to add a long-term care (LTC) insurance policy to our base case. If we're adding it to the base case, that means when the client walked in, they already own it. I'll select long-term care. I'm going to name it. I often name them based on the carrier that the policy is with. In this case I'll say it's an Allianz LTC policy, and we'll just say that it has a $4,000 monthly benefit. It was issued in February of 2016. It has a 90-day elimination period. Is there a COLA on the benefit? We will say 3%, which is pretty common. The monthly premium is $250. Of course, we're entering facts here. So, these should all be easily discoverable. Is there a lifetime benefit? If not, you choose not life contingent. Otherwise, you choose death of insured. In most cases, we don't get lifetime benefits, so we're going to enter a benefit period. The benefit periods are in months to allow a broad range. In this case, let's just say it's a 72-month policy. How long does the premium last? In this case, we can say lifetime, or we can say a limited pay. And that would be a number of years of premium. I'll choose a lifetime payment, but with almost all long-term care policies as soon as you claim premiums end. A lifetime payment ends when the client claims. That's all it takes to enter a long-term care insurance policy in Income InSight.

You'll see that policy on the results screen. Under income by result you can see premiums paid. Now premiums represent such a small portion of their overall income that I'm going to make the other elements of it disappear. But in this case, I can see the annual premiums all the way out to his death. If I want to see the benefit applied, then I'm going to need to choose a stress test that has him needing long-term care, because that will trigger the benefit. Now our stress test for long-term care assumes four years prior to the end of whatever you entered life expectancy for your client. So, in this case, we entered 90 for life expectancy. We're going to assume he has a long-term care need at 86 with an additional monthly cost of care of $4,000 inflating that annually by 5% and that needs to last four years.

When I click "show me," the additional income need is applied and the LTC doesn't really impact the client's lifestyle in a positive way.  That's why it's shown above the need line. Remember, this is additional expenses that are needed for care. I can see it here in the income by source chart as well. I can see the policy paying out for the full four years. If it were a more limited policy, maybe a three-year policy, I would see three years of payments from the policy and then an additional year where we had to use assets to pay for care.