NEWEST FRONTIER IN INSURANCE SALES: LONG-TERM HEALTH CARE FOR BOOMERS; IAFP EDUCATION PUSH ADDS TO BIG GE DRIVE

Like it or not, get ready to hear a lot more about long-term-care insurance.

GE Financial Assurance of Richmond, Va., is one of several companies and industry groups pushing long-term care planning. Improved insurance policies, revised tax laws and longer life expectancies are behind the trend.

In addition to a GE marketing campaign, the Atlanta-based International Association for Financial Planning last month launched an educational effort on long-term care planning.

Both kicked off their campaigns the old fashioned way: by releasing studies. GE polled 1,500 Americans between the ages of 35 and 84. The IAFP, on the other hand, sought input from 250 financial advisers versed in counseling clients about nursing homes, home-health care and financial planning issues related to the elderly.

The General Electric Co. unit found 21% of respondents had gathered information about long-term-care insurance, even though 64% described themselves as “anxious” about their long-term planning.

Meanwhile, association’s survey concluded that most clients wait until they are in their 60s before seriously considering plans for long-term health care — a 10 years longer than they should.

“Long-term care has just become more and more important to discuss,” says Melanie S. Dicenso, a financial planner in Royal Oak, Mich. “It didn’t used to be that people would live to 90.”

Even so, the subject is taboo for many. “Nobody wants to assume that the last days of their life will be spent strapped to a chair as a vegetable in a nursing home,” says William Dobbs, a financial planner in Foster City, Calif. “Nursing homes are not pleasant. But, in the larger arena, you may need to have someone at home taking care of you.”

Thanks to changes in the way some policies are written, that’s entirely possible. Until five years ago, most policies required the holder to be hospitalized and then placed in a nursing home. Today, many cover at-home medical care and such tasks as cooking and bathing.

“Ten years ago, long-term care meant nursing care,” says Kathleen Ligare, senior vice-president of marketing, for GE’s long-term-care division. “The products have become more sophisticated, structured for individual preference, such as care in your home.”

tax change helps, too

Tax laws have also changed. Thanks to an Internal Revenue Service rule change in 1998, the cost of premiums may be partially tax-deductible. Consequently, some families may buy policies for elderly parents and split the cost between siblings — a strategy that enables the children, whose incomes are higher than their parents’, to take the tax break..

In such cases, the policies protect working families who may be faced with paying to send kids to college at the same time they are shelling out cash for nursing care for their parents.

And long-term care can cost a pretty penny. The annual tab on GE’s policies, which are available for people over 50, ranges from $897 a year for a 50-year-old in New York, to $2,673 for a 65-year-old in California.

In its bid to drum up business, GE has launched a website (www.ge. com/longtermcare). The site, which is part of a larger radio, print and TV campaign, offers a premium calculator. Other tools geared to financial advisers are in the works.

IAFP also has its own website on long-term care, (www.planningpaysoff.org/care).

Despite the push, long-term-care insurance isn’t for everyone. As a general rule, couples that earn $100,000 or more a year in interest income and don’t have to dip into their principal don’t need to buy long-term-care policies, say advisers.

“The purpose of insurance is to protect you from those things that would ruin you financially if they were to happen,” says Mr. Dobbs. “If you can afford to pay for care without impoverishing your spouse, then there’s no reason to buy the insurance.”