How to use Long-Term Care Insurance Analysis

The Long-Term Care (LTC) Insurance screen illustrates the potential impact associated with LTC costs as well as how that impact can be addressed through the purchase of an LTC insurance policy.

For a brief overview of the Long Term Care analysis tool watch this short video.


To access LTC analysis in RightCapital, select the desired client and click Open client (or the ↗️ icon next to their name) and navigate to Insurance > Long-Term Care.

There are two tabs on the Long-Term Care tab: Impact and Coverage. Both are covered here; let's jump in:

Impact Tab

The purple bar graph indicates a client's assets when they include the expense of long-term care but do not include coverage from proposed LTC insurance detailed in the action items. Existing LTC coverage from the Profile > Net Worth area will be factored into purple invested assets bar.

The value displayed to the right of the graph summarizes potential retained assets when an insurance policy is purchased to protect against the impact of expensive long-term care at the end of a client's plan.

The impact tab illustrates two things:

1
The effect LTC costs can have on the client's plan.

The chart on the Impact tab will initially illustrate the impact of the LTC costs reflected from the Profile > Goals screen under "Annual Retirement LTC Cost".

Annual Retirement Long Term Care Cost

You can choose different options for estimated LTC costs. National average values for In-home care, Assisted living, and Nursing home are from Genworth's 2019 Cost of Care study. You can also select 'Customized amount' to enter an amount of your choosing.

We plan to update the national average costs periodically as available. When those costs are updated the updated value will automatically be incorporated in your client's plan.

The blue bars in the chart reflect the client's projected assets without any LTC costs incorporated.

The purple bars show their projected assets with the LTC costs included. The chart is a powerful visual of how LTC costs can significantly erode your clients' assets in the later years of the plan.

Why does it look like assets shrink with LTC?

The graph compares two scenarios:

  1. The typical advising scenario which does not factor in increases expenses toward the end of the client's plan
  2. RightCapital's insights into how expensive long-term care can be for a client.

The graph showing a drawdown (in purple) indicates what may likely happen to a client's assets is they do not purchase LTC insurance. This has a significant impact!

Use this graph to indicate the value of purchasing LTC insurance to protect against such a significant drawdown of assets at the end of a client's plan and retain more business, for longer, with RightCapital!

2
The impact of proposed LTC insurance policies.

Under the Action Items section, enter the parameters of proposed LTC insurance policies for either client.

When information about the LTC policy is entered, RightCapital will calculate the impact of the policy on the client's projection.

The results display in the chart, as well as the net impact at the end of the plan displayed to the right of the chart.

Tip

Click on the items in the legend to add or remove them from the chart.

It can be easier to see the insurance impact if the blue bars are removed from the chart as this is a best practice for presenting the before-and-after effects to clients.

The change includes the impact of premiums on the client's plan, as well as how insurance the projected LTC costs.

Coverage Tab

The Coverage tab gives a simple view of how much of the client's projected LTC costs are covered by insurance.

Current coverage reflects coverage from any existing LTC insurance policies entered under the client's Profile.

Proposed additional coverage reflects coverage from the policy proposed in the Action Items section.

The percentage shown in the center of the circle includes both current and proposed coverage.

Webinar

Click here to view one of our weekly webinars illustrating the entry of LTC policies and the use of the Long-Term Care module.