When the Long Term Care Partnership program was initially introduced in the 1990s, the intent was to encourage middle-income individuals to purchase affordable levels of protection. Clearly, a three-year benefit program would be significantly less costly than a lifetime (or unlimited) benefit.
As the Partnership program expanded to include more states -- a move that resulted in me having served as the marketing consultant for California's Partnership program -- some were concerned that the initial intent of the program might be lost. A combination of good agent education along with the current economic conditions are clearly helping to ensure that the goals of the Partnership program are being achieved.
Partnership policies are now available for sale in roughly 38 states. The Partnership concept was well ahead of its time when first introduced. The program was supported in four states by grants from the Robert Wood Johnson Foundation with the goal of finding ways to get more individuals of lesser financial means to undertake long term care planning. Since that time, Congress has approved expansion of the program and the Department of Human Health and Services has actively promoted the effort in additional states.
Nearly two-thirds (63.9 percent) of recently purchased individual Partnership long term care policies provide a nursing home maximum benefit of $182,600, while only 7.4 percent provide an unlimited lifetime dollar maximum. That generally equates to three years of benefits in current dollars. Partnership policies typically include an inflation growth factor.
The vast majority of Partnership policies (93.5 percent) have one pool of benefit dollars that provide the policyholder with options for qualifying home care. Most also provide benefits for qualifying assisted living expenses.
We advocate the right level of long term care insurance based on what a consumer can afford, as well as how much financial protection makes sense for their individual circumstances. The newest Partnership data shows the growing success of educating consumers that some protection is far better than no protection at all. It's also less expensive.
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