Why Offer Short-Term Care Insurance?

Sales of short-term care insurance (STC) are continuing to increase, and more carriers are introducing new product offerings. Currently, the Krause Agency offers STC with Aetna, Cigna, GTL, and Manhattan Life, though industry chatter suggests one of our top traditional carriers will be offering a short-term care product in 2025! Unfortunately, there still seems to be a bit of hesitation when it comes to selling short-term care insurance. Here’s why you should add this valuable pre-planning tool to your business.

What Is Short-Term Care?

Short-term care is not long-term care, so most STC policies are designed with up to one year of coverage, maximum. Some policies separate their facility and home health care (HHC) coverage periods. For instance, your client can purchase 360 days of care in a facility and add a home health care rider for an additional 360 days of HHC.

The benefit trigger for STC is similar to that of a long-term care insurance policy—requiring assistance with at least two activities of daily living or a severe cognitive impairment—but with an important exception: your client’s condition does not need to be certified to last 90 days or more. This means, with STC, your client has access to benefit dollars sooner than with a LTCI policy, making STC ideal for conditions with recovery times of less than 90 days, such as joint replacements, cancer treatments, traumas, and falls.

Read More: Alternatives to Traditional LTCI When Health or Age Cause Trouble

Which Clients Are the Best Fit for Short-Term Care?

Short-term care insurance is best suited for clients who may not be insurable for long-term care insurance due to health or age. STC has a simplified application process, typically with 5-10 knock-out questions, and coverage is issued up to age 89. With a lower benefit period, STC coverage is also more affordable than LTCI. Clients who would like to pre-plan for their care needs but are on a smaller budget would benefit from considering STC.

Short-Term Care Insurance Case Study

In January 2024, Mike, age 67, applied for traditional LTCI coverage. On his application, he listed three medications for diabetes that was originally diagnosed eight years ago. During the LTCI underwriting process, the carrier completed a phone interview with Mike and ordered medical records from his primary care physician. These medical records revealed that Mike was being treated for polyneuropathy due to his diabetes along with an elevated creatinine level, which could be an indicator of kidney dysfunction. For these health reasons, his application for traditional LTCI was declined in February 2024.

On March 7, Mike’s insurance agent helped him apply for a short-term care insurance policy from Manhattan Life. Because STC has a simplified underwriting process, his policy was approved and issued about 2 weeks later, on March 15. Mike is thrilled to have an option in place to help him and his family pay for care if he needs it, and his insurance agent was happy to receive the commission check. Short-term care insurance for the win!

If you have a case that you would like to prequalify or get a quote for short-term care, please contact our team.