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🔍 What is Short-Term Care Insurance?
Short-Term Care Insurance (STCI) is a health insurance product designed to cover temporary care needs for up to 365 days, including in-home care, assisted living, or skilled nursing. It serves as an affordable, accessible alternative to Long-Term Care Insurance (LTCI), especially for clients who:
Are between ages 65–75, though eligibility extends up to age 89
Want to cover gaps before Medicare eligibility
Need coverage immediately due to a zero-day elimination period
đź§ Key Triggers for STCI Benefits:
Inability to perform 2 out of 6 activities of daily living (ADLs) or
Diagnosis of a cognitive impairment
Activities of Daily Living include: bathing, dressing, eating, toileting, transferring, and continence.
👉 Source for ADLs definition: Medicare.gov - Long-term care
đź’ˇ Advantages Over Long-Term Care Insurance
1. Immediate Coverage:
STCI can offer a zero-day elimination period, which contrasts sharply with LTCI’s standard 90- or 180-day wait.
This makes STCI ideal for events like hip or knee replacements, accidents, or sudden hospitalizations.
2. Lower Premiums:
Premiums are significantly lower due to shorter coverage periods and simplified underwriting.
Sample rates for a $100/day benefit for 365 days:
Age 60: ~$37/month
Age 75: ~$135/month
Compare LTCI average premiums here: AALTCI Cost Guide
3. Simplified Underwriting:
No lab tests or full exams—only knockout questions
Clients with semi-managed chronic conditions (like controlled high blood pressure or statin use) may still qualify
If previously declined for LTCI, STCI may still be an option
🔄 Restoration of Benefits
STCI often includes Restoration of Benefits. If a client goes off claim and remains healthy for 180 days, their benefits reset. This allows:
Multiple uses of the policy for separate events
Extended value over time
This feature is uncommon in traditional LTCI policies.
đź’Ľ When to Use STCI in Planning
1. Filling Gaps Before Medicare:
For clients aged 62–65 who are on COBRA or uninsured, STCI helps cover health needs during this vulnerable period.
2. Supplementing Medicare Advantage:
STCI can cover:
Skilled nursing co-pays
Hospital co-pays
Additional needs like home modifications, caregiving, or meals
đź“– Medicare's coverage limits for skilled nursing:
Medicare.gov - Skilled nursing facility care
3. Bridging LTCI Elimination Periods:
Clients with LTCI that has long elimination periods (e.g., 180 days) can pair STCI to cover that gap cost-effectively.
4. Alternative for Declined LTCI Applicants:
Due to lighter underwriting, STCI offers coverage when LTCI is not an option.
âť“ Key Conversation Starters for Clients
Advisors can open discussions using:
“What is your plan if your health changes in 5, 10, or 15 years?”
“Do you want your children to be caregivers or care managers?”
“Do you know how much a year of home care or memory care costs?”
📊 Average annual care costs in the U.S.:
Home Health Aide: ~$75,000
Assisted Living: ~$64,000
Skilled Nursing: ~$100,000+
Memory Care: ~$140,000
Genworth Cost of Care Survey
🛑 Limitations and Considerations
Not available in every state (e.g., CA, NY, FL, MN, NJ, MA, WA, VT)
Premiums not guaranteed—though there have been no rate increases to date
Individual policies only—no shared spousal pool like in some hybrid LTCI policies
If clients reside in restricted states but have a second home elsewhere, they may still qualify under the second home’s jurisdiction.
đź”— Additional Resources
🎯 Advisor Takeaways
STCI is a practical tool to bridge gaps in care coverage, especially for clients who are unprepared or priced out of LTCI.
Use STCI creatively—pair it with Medicare, long-term care, or as standalone protection.
Bring in STCI early—have these conversations before a health crisis forces a reactive decision.
Educate clients on the real cost of care and offer choices that align with their independence and family dynamics.
Had not heard of this product before - already have a couple of clients in mind!
- Randi B.
Old topic, excellent review especially in light of cuts to the Marketplace.
- Warren W.
I was not familiar with this product. Speaker was excellent, very thorough and clear.
- Heidi D.
Attendees Comments:
Had not heard of this product before - already have a couple of clients in mind!
- Randi B.
Old topic, excellent review especially in light of cuts to the Marketplace.
- Warren W.
I was not familiar with this product. Speaker was excellent, very thorough and clear.
- Heidi D.