Category: long term care plans

Hybrid life insurance plans covering home health care

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August 27, 2012

1:32 PM

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Accelerated Benefits, Accelerated Death Benefits, Chronic Illness Accelerated Benefit Rider, Chronic Illness Rider, Critical Illness Accelerated Death Benefit, hybrid life insurance policies, hybrid long term care insurance and life insurance, Indemnity Benefit, long term care insurance, long term care plans, Ohio

The Dayton Daily News has posted an article on the growth of home health care companies in Ohio.

“I think there’s been a real renewed interest in home care,” Thompson said. “I think people are looking for alternatives for care and again to remain in their homes I think [because of] the cost of moving into a facility, and they have to give up a lot to do that. I think independence is important to that population.”

Many life insurance plans at no extra upfront cost come with an accelerated benefit rider for chronic care.  Being unable to perform 2 out of 6 activities of daily living, like dressing or bathing, or cognitive impairment allows the policyholder to accelerate portions of their life insurance benefit for long term care.  The better plans allow an accelerated cash benefit.

These hybrid life and chronic care plans offer fixed premium, guaranteed for life.   They can be structured to build cash value and have an increasing benefit.  Once certified by a doctor as needing chronic care and a plan was devised that home health care was a suitable option, the accelerated benefit could pay for home health care services.  Any benefits not needed would pass on as a life insurance death benefit.

This kind of coverage is affordable and a very good solution for the associated costs of home health care.

Long term care insurance options: Partnership or hybrid

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August 21, 2012

4:17 PM

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Annuities, annuity long term care rider, hybrid long term care insurance and life insurance, Lincoln Life, Lincoln National Life Insurance Company, long term care insurance, long term care life insurance hybrid with return of premium, long term care plans, United of Omaha

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?

Life insurance as a piggy bank for long term care expenses

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January 18, 2012

5:14 PM

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

Life insurance has a lump sum death benefit, but if serious illness strikes, a portion of it can be raided to provide living benefits.

Breaking Open The Piggy Bank
It’s called an accelerated death benefit.  Literally it’s accelerating out part of the death benefit from the policy before dying. Carriers charge a fairly high fee for this benefit.  Rules, caps and charges vary.

Most carriers include a terminal illness accelerated death benefit with no up front charge.  A handful of carriers offer a chronic illness accelerated benefit for long term care expenses.

Long term care benefit:  Cash Versus Reimbursement
Most LTC insurance are reimbursement plans with a daily or monthly maximum benefit.  Reimbursement is only for qualified LTC expenses. That’s a problem especially with home health care, the majority done by the spouse or one of the children.  Expenses associated with LTC vary depending on the the need, and may or may not be covered under a traditional LTC reimbursement plan.

Those types of limitations is why North American’s chronic illness benefit is so valuable and versitile.  It’s a cash benefit. You can accelerate up to 24% per year, and you can spend that money any way you please.  Granted the “discount fee” for cash acceleration is fairly large; the rule of thumb is a percentage the correlates with age.  At age 75, the discount fee is about 25%, at age 80 it’s about 20%.  But still that adds up to a significant amount of  money depending on the size of the policy.

Return of Premium
For those who want an money back opt-out option, Lincoln, Genworth and State Life offer life insurance/LTC coverage with return of premium.  Change your mind or an unexpected need comes up, you can terminate your coverage and get every dime of premium back.

What’s great about about this life insurance piggy bank, if no need for LTC arises, the beneficiaries get the full death benefit intact.

Images source: Wikipedia Commons

Life insurance bundled with long term care and critical illness

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June 16, 2011

11:32 AM

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Accelerated Benefit, Accelerated Benefits, Accelerated Death Benefits, Alzheimer's, Chronic Illness Rider, Critical Illness, In your 50's, In your 60's, In your 70's, life insurance and long term care, Living Benefits, long term care insurance, long term care plans, Universal Life

Life insurance can now fund long term care or critical care expenses. Turn your death benefit into a living benefit. American National now offers an impressive group of accelerated benefit riders at no extra charge.

There are three living benefits:

  • Chronic   –  Payment of an accelerated benefit if the insured cannot perform 2 of 6 activities of daily living or cognitively impaired. This is the criteria for long term care insurance benefits with traditional LTC plans.   Use your life insurance to augment your LTC insurance, cash comes in handier than expense reimbursement, or have your life policy serve as your contingent LTC insurance.
  • Critical   –  Payment of an accelerated benefit if the insured experiences a critical illness. American National says 16 different illness, but details and definitions must be referred to on the specific rider
  • Terminal  –  Payment of an accelerated benefit  if insured has less than 24 months to live. Most life insurance coverage has this terminal illness rider.   It’s 12 months in certain states.

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Woman buying most life insurance plus long-term care insurance

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June 1, 2011

1:41 PM

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Accelerated Benefit, Accelerated Benefits, Accelerated Death Benefits, Chronic Illness Rider, guaranteed universal life, In your 50's, In your 60's, In your 70's, life insurance and long term care, Living Benefits, long term care insurance, long term care plans, Universal Life

Woman buy 60% of the life insurance plus long-term care insurance policies, according  to research by the American Association for Long-Term Care Insurance.  34% of the woman were between 55 to 64, and 40% were between ages 65 to 74.

North American has the best deal for life plus chronic illness benefit.   It’s a universal life policy that can accelerate out 24% a year in cash for chronic illness.   End up not needing long term care?   Your beneficiaries get the full policy face amount or whatever you haven’t accelerated out for long term care.    Also North American policy face amounts start at $25,000 of coverage, so premiums can fit any budget.

For larger face amounts there are single premium policies with Genworth and Lincoln National that offer many advantages such as return of premium.  There are also annuities that offer long term care riders which extend long term care coverage 2 or 3 times higher than the  face amount.

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.