Long term care is becoming a more real issue as 1 out of every 2 Americans over the age of 65 will need some form of care. Our reality today is long term care is the #1 reason someone over the age of 65 is financially devastated (according to a national pole of financial planners). But the story doesn’t end there for employers and employees.

The true cost of care extends well beyond what someone pays out of pocket for home and facility care if they don’t have long term care insurance. There is an additional financial burden placed on today’s workforce and businesses. When parents need care, often time it’s the grown children who step into the role of care giving or managing the care needs of their parents. Of the 44.4 million caregivers, 59% of them are working aged adults.¹

Employees lose ground financially in lost wages from salary and bonus due to arriving late, leaving early, unpaid leave and missing out on training and promotions. The average working caregiver will lose $659,000 over a lifetime in wages, social security and retirement pension.²

Employers also pay a price when employees become working caregivers. This is due to increased absenteeism and decreased productivity. When caring for a family member employees are not only physically absent but mentally absent and disconnected from their work. Costs associated with lost productivity include work interruptions, family crises, absenteeism and replacing employees to name a few. On a national basis, employer costs for working caregivers range from $11.5 to 29 Billion per year.³

When you consider the net financial impact, it is not surprising that long term care insurance is the fastest growing employee benefit in America today.⁴ An increasing number of companies both large and small are offering employees the opportunity to purchase individual long term care policies. As an employee benefit, long term care insurance can be implemented on a voluntary, sponsored and/or an executive carve-out basis. Coverage is not only available to employees, but family members (spouses, parents, in-laws, etc.) can participate as well. With as many as 3 insured lives, employees & family members can receive reduced underwriting and discounted premiums, yet still have the value that individual policies offer over true group plans.

Does long term care insurance make a difference? Absolutely! Long term care provides a firewall of protection around employees’ 401(k) and retirement plans; and working adults whose parents who own long term care insurance are twice as likely to stay in the work force and have fewer social stresses.⁵ Long term care insurance helps families, working adults and business protect their bottom line against the devastation of uninsured long term care expenses.

1. Caregiving in the U.S., National Alliance for Caregiving and & AARP, April, 2004.
2. Mature Market Institute: The Juggling Act Study 1999.
3. MetLife Study of Employer Costs for Working Caregivers, 1997.
4. MetLife Study, 2005
5. The MetLife Study of Employed Caregivers: Does Long Term Care Insurance Make a Difference, 2001.

Brad Tisdale
Director of Risk Management
Mission Wealth Management, LLC
1123 Chapala Street, 2nd Floor
Santa Barbara, CA 93101
(805) 882-2360
btisdale@missionwealth.com