Life insurance agents who reside in North Carolina are required to get 24 hours of continuing education credits every two years. Nationally, my licenses for other states have cross reciprocation with my NC requirements. To help get my credits for this cycle, I’m taking a couple of courses that are required for the long term care (LTC) partnership program. I have been licensed to sell LTC/Medicare Supplement since 2003, but now to sell a traditional LTC plans in NC requires educational credits for the Partnership Program which NC has adopted.
Partnership Programs have standardized LTC coverage features that protect the consumer. Regardless, the fundamental flaw is that traditional LTC insurance plans are subject to rate increases. Those increases must be approved by state insurance commissions, if sufficiently justifiable, but over the years they have occurred and likely will occur in the future. Also if you don’t use traditional LTC insurnace coverage, it’s money out the window.
The hybrid solution: Life insurance with LTC
A solution to can be a life insurance policy with a decent LTC accelerated benefit rider. With it you can lock in a guaranteed level premium for life, and the benefit is not wasted. If you never need LTC, your beneficiaries get the LTC benefit. According to the course I’m taking, the amount paid for an accelerated LTC benefit is usually in the range of 50 to 90 percent of the policy’s death benefit.
The question becomes: can you afford a policy with a death benefit big enough for potential LTC cost of care?
Annuities
Annuities are another good option. It is an investment that can grow and then used if needed to fund LTC.
Hybrid Annuities
Two products: Lincoln LTC fixed Annuity and United of Omaha Living Care Annuity come with LTC riders that augment the total amount of LTC coverage.
The question becomes: can you establish an annuity big enough for potential LTC costs?