Category: life insurance and long term care

Long term care and life insurance

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May 18, 2011

11:51 AM

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Accelerated Benefit, Accelerated Benefits, Accelerated Death Benefits, life insurance and long term care, long term care insurance, long term care plans

Bloomberg published an article today on long term care and life insurance.   It was a fairly good overview, but a bit limited on the products available.   They keyed in more on the life products where you have to pony up a lump sum premium like for Genworth’s Total Living coverage or Lincoln Financial’s Money Guard Reserve.

You should also note that North American’s universal life products that allow the policy holder to accelerate out the death benefit for long term care.  You pay regular life insurance premiums, so no lump sum is required to start it.   Coverage amounts start at a $25,000 benefit, so these can be very affordable.  For example, for a female age 60, preferred non tobacco, a $25,000 guaranteed to age 120 universal life is $36.26 a month.   Not a bad starting point.  Face amounts go up to $50,000,000 , so that can fit a wide range of situations and goals. Maximum issue age is 75.

If  the lump sum life insurance products appeal to you, make sure you compare them to annuities with long term care riders.   You can leverage 2  to 3  times your annuity for long term care benefits, and they come are inflation protection.  For example a $100,000 annuity with an initial $200,000 long term care benefit.  Genworth has a Total Living Coverage Annuity, and United of Omaha has Living Care Annuity plans.

Contact me for a quote.

 

Insurance Contingency Plans for Onset of Alzheimer’s

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March 30, 2011

11:05 AM

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Accelerated Death Benefits, Chronic Illness Rider, life insurance and long term care, Living Benefits, long term care insurance

The Boston Globe has an article today on the problems of care for people with in the early stages of Alzheimer’s.   A few of the people profiled in the article with Alzheimer’s are in their 50’s, though early-onset Alzheimer’s is fairly rare affecting 5% to 10% of the cases prior to age 65.

If you’re in your 50’s or 60’s and you’re still healthy, it’s a good time to prepare for this contingency.

Looking across the spectrum of long term care insurance products, you could get a traditional long term care (LTC) insurance policy.   The downside of this approach is that the carrier reserves the right to raise your premiums down the road.  Also it’s likely a reimbursement plan for qualified expenses.   That places certain limits on how your benefits are spent.  Let’s say in the example of someone in the early stages of Alzheimer’s and still fairly active, this would pigeon hole you into finding someone licensed and certified to perform LTC services.   You couldn’t have a friend, relative or suitable person perform those care duties and have your LTC insurance pay for it.

That’s why a hybrid LTC insurance approach may make more sense.    I recommend North American for permanent life insurance.  If you ever require chronic illness care, you can accelerate out your policy’s benefit in cash, and spent it however you deem fit.   If you don’t need LTC, your heirs get the life insurance benefit.

Also setting up an annuity with a LTC rider is a good approach.  You can get annuities with 2 to 3 times a LTC benefit.  So for example a $100k annuity would give you an additional $200k to $300k insurance to provide for LTC.   Look for annuity with an indemnity option, pay out in cash, rather than reimbursement for maximum flexibility.

Let me know if you’re interested in any of these products.