Company and Product Guide to hybrid Life insurance with Long Term Care rider or Chronic Illness Benefits, Linked Benefit, Hybrid Long Term Care Products. Assume the riders are available in all 50 states although for California and New York some specifics are noted since rider availability depends on a longer time frame and restrictions for state approval.
The two primary benefit models are cash indemnity and reimbursement. Cash indemnity is better.
Life Insurance with “Long Term Care” or “Chronic Illness” benefit
American General recommended
“Accelerated Access Solution®” Chronic Illness Accelerated Death Benefit Rider available on:
“Secure Lifetime GUL 3”, “Value+ Protector III IUL”, “Max Accumulator+ III”
Tax Qualified Status: IRC 101(g)
Pros: indemnity payment (cash indemnity), no permanency required for condition, waiver of charges on claim, increasing chronic illness benefit with increasing death benefit; option IRS daily maximum payment: $410/day $12,470/month in 2024 (IRS max not available in CA, available in NY); no increases in rider cost
Cons: recertification required every 12 months
Nationwide “Long-Term Care Rider II” (also available in CA) (NY see following)
“YourLife ® No-Lapse Guaranteed UL II” “Nationwide Indexed UL Accumulator II 2020” “Nationwide Indexed UL Protector II 2020”
Pros: cash pay out (indemnity-style benefit a direct payment, not reimbursement); Federally tax qualified status: Section 7702B of the IRC; Accelerated Death Benefit; residual death benefit 10% of base policy; international benefits possible; recertification annual review, only as often as reasonably necessary; paid by Nationwide; two times HIPAA per diem is a generous benefit making larger face amount coverage attractive. For example for $1,000,000 in coverage, if 4% is elected percentage, the maximum monthly benefit at issue is $24,660, which is the lesser of the elected percentage 4% times $1,000,000 = $40,000 and the 2024 HIPAA Per Diem is $410 times 2 times 30 = $24,600
Cons: maximum LTC monthly benefit is limited to lesser of 2%, 3% or 4% of LTC specified amount or two times HIPAA per diem. Since the maximum LTC monthly benefit is 4% of the initial face amount, lower face amounts may not offer an adequate monthly benefit protection; LTC rider charges are not guaranteed level
Nationwide “Long-Term Care Rider” available in NY with “Nationwide YourLife Indexed UL Protector”, “Nationwide YourLife® Indexed UL Accumulator”
2% per month of the base specified amount (not including any Additional Term Rider specified amount), or the per diem amount allowed by HIPAA for the given year time days in the month.
Residual Death Benefit not available in NY
John Hancock (also available in NY, CA)
“Long-Term Care Rider”
“Protection UL 22” “Accumulation IUL 23”
Pros: 4% of policy amount; IRC 7702B; competitive on premiums, total death benefit/total LTC benefit, guaranteed assumptions; maximum accelerated pool at issue is substantial $50,000.
Cons: reimbursement method, pays for qualified long-term care cost to LTC providers for required bills and receipts, not a direct indemnity cash pay out; 1%, 2%, or 4% policy amount formula limits adequate benefit unless the face amount is sufficiently high
Note the distinction: Long-term care riders: IRC101(g), IRC 7702B, pay temporary and permanent claims. LTC riders allow for a recoverable conditions whereas chronic illness riders only cover conditions deemed to be permanent for the remainder of the insured’s life. American General, Lincoln National, Protective, Prudential and Symetra chronic illness riders are the exception. They do pay for temporary, recoverable conditions.
Carrier List
A. LTC riders
Equitable (also available in NY, CA)
BrightLife® Grow, Series 159
“Accelerated Benefit for Long-Term Care Benefits Rider”
Pros: Cash pay out (indemnity benefit, not reimbursement); Tax qualified status: Section IRC 7702B; international benefits possible; increasing face amount option, Death Benefit Option B, total benefit pool may increase with increasing death benefit
Cons: 1%, 2%, 3% of policy amount (100% IRS max in NY); permanency required (except NY)
Transamerica:
“”Chronic Illness Accelerated Death Benefit Rider” (not available in NY)
“Financial Foundation IUL”
Pros: Cash pay out (indemnity benefit rather than reimbursement method); tax qualified status: Section 7702B of the IRC; return of premium at the 15th or 20th policy anniversary or anytime after the 25th policy anniversary; residual death benefit
Cons: annual recertification
(see below Transamerica “Trendsetter LB” for term coverage)
John Hancock (also available in CA, NY)
“Long-Term Care Rider”
“Accumulation IUL 23” “Protection UL 22”
Pros: 4% of policy amount higher than competing Equitable and Nationwide plans; IRC 7702B; recertification not required; pays reimbursement up to $50,000 per month (not restricted by IRS per diem limit);
Cons: reimbursement method, pays LTC providers for bills and receipts, not a direct cash pay out; 1%, 2%, or 4% policy amount formula, maximum accelerated benefit pool percentage, limits the maximum monthly benefit amount for face amounts under $5M.
“Critical Illness Protection Rider”
“Protection IUL”, Accumulation IUL, “Protection UL”
Pros: Up to $250,000 one-time, lump-sum benefit (checked 3/2024)
“Accelerated Death Benefit for Chronic Illness”
“Protection IUL 22”
Pros: indemnity; benefit can increase with death benefit option 2 (increasing), no monthly charge (charge at claim)
Cons: benefit up to 75% of death benefit or maximum $1M, payment is restricted to the IRS per diem limit; recertification required every 12 months
United of Omaha
“Long-Term Care Rider”
can be added to “Income Advantage” and “Life Protection Advantage”
Pros: 4% maximum monthly benefit option; also 1%, 2% maximum monthly benefits options; Maximum total benefits up to 100% of the initial specified
death benefit (capped at $2 million for the 1% and 2% option and $1.25 million for the 4% option); Once the policy is issued, LTC Rider cost of insurance rates
are guaranteed not to increase over the life of the policy
B. Chronic Illness Benefit: IRC 101(g); review carefully benefit descriptions and disclosures: benefits vary by carrier, especially check for a stipulation of a permanent or unrecoverable condition as part of the benefit trigger.
Note: Chronic Illness benefit stipulate the condition must be expected to be permanent in order to qualify. American General, Lincoln National, Prudential and Symetra are the exceptions.
American General recommended
“Accelerated Access Solution®” (AAS) Chronic Illness Accelerated Death Benefit Rider
note: “Secure Lifetime GUL 3, “Max Accumulator+ III” IUL (rider available in CA); “Value+ Protector III” IUL (rider available in CA, NY); “Max Accumulator+ II” (in NY: US Life Ins. Co. of New York)
Pros: indemnity benefit (cash); condition need not be permanent to access the benefit; waiver of monthly deduction, policy premium payments stop as long as policyholder meets chronic illness requirements; lifetime maximum benefit $3,000,000.
Pros: “Value+ Protector III” IUL age 100 no lapse guarantee option; using the increasing benefit option, the maximum chronic illness benefit under the rider will also increase (most LTC or chronic illness riders are a defined benefit set by the original policy face amount) “Max Accumulator+ III” IUL also has this increasing chronic illness benefit feature; benefit at IRS maximum per diem (the 2024 rate is $410 per day, $15,470 per month)
Cons: charged additional premium as an optional rider; 90 day elimination period; the IRS maximum monthly benefit is currently $15,775.
American National
available with: Signature Guaranteed Universal Life, Signature Performance Indexed Universal Life, Signature Protection Indexed Universal Life, Signature Whole Life,
Signature Guaranteed Universal Life (NY), Signature Indexed Universal Life (NY), Signature Whole Life (NY)
Pros: indemnity, option for full acceleration, lump-sum settlement of the policy event of a qualifying critical illness, chronic illness or terminal illness; maximum acceleration $2 million; ages 66 and over $1 million.
Note: Death benefit reduced by actuarial discount and administrative fee assessed when accelerated benefits are elected
John Hancock
Chronic Illness Rider: pays a monthly or annual indemnity benefit up to IRS per diem limit at the time of claim, Increasing benefit pool in the event of corridor or option 2, increasing death benefit growth
Accelerated Death Benefit for Chronic Illness Rider: pays an indemnity benefit once every twelve
months up to 75% of death benefit or $1M — up to the IRS per diem limit at claim
Lincoln National
“WealthAccumulate 2 IUL” “Wealth Preserve 2 IUL”
IRC 2202B, IRC 101(g), reimbursement, annual IRS per diem
Prudential
“BenefitAccess Rider” (also available in NY, CA)
“Prulife Universal Protector” optional “BenefitAccess Rider” chronic illness benefits
Pros: condition need not be permanent to access the benefit (verified 7/20); cash pay out (indemnity style benefit a direct payment, not reimbursement); annual lump sum, or one-time lump sum; international benefits possible; $5 million maximum total benefit; 4% monthly benefit option
Cons: This is an optional rider for an extra premium at issue;
Pacific Life
“Pacific PremierCare Advantage” (CA)
Penn Mutual
“Chronic Illness Accelerated Benefit Rider” (available in all states)
Pros: maximum 24% of total death benefit annually (or IRS per diem amount, whichever is less); indemnity method, in cash, maximum $240,000 per year; residual death benefit; $5,000,000 maximum available for acceleration
Cons: condition must be expected to be permanent; maximum payment limited to IRS approved per diem amount; yearly certification by a doctor; only can roughly estimate reduction in cash value and death benefit for accelerated benefit at time of election, based on accelerated benefit interest rate, mortality expectation for a chronically ill individual; expect that reduction to be fairly significant, decreasing in proportion to advancing age, illustrations are able to show hypothetical examples of charges at three given ages; the total of death benefit cannot be reduced below $50,000;
Securian (not in CA)
“Accelerated Death Benefit for Chronic Illness Agreement” available on “Eclipse Accumulator Indexed Universal Life, “Eclipse Indexed Universal Life (NY only)
Pros: Cash pay out: indemnity method, not reimbursement method; $5,000,000 maximum total benefit
Cons: 2% or 4% of policy amount per month or the IRS per diem limit based on a 30 day calendar month: $12,300, whichever is less
Symetra
“Symetra Accumulator Ascent IUL 2.0″, Symetra Protector IUL”
“Chronic Care Advantage Rider”
Indemnity, 2% and 4% capped at the IRS per diem x 30 = $12,300 monthly in 2024
Protective Life
“ExtendCare Rider – A Chronic Illness Accelerated Death Benefit” (not in CA, NY as of 12/22)
Available on “Protective Indexed Choice UL” “Protective Advantage Choice UL” “Protective Lifetime Assurance UL” “Protective Proclassic II UL”
Pros: cash pay out: indemnity plan, full and direct payment, not reimbursement; condition does not have to be permanent to be eligible for benefits, there is an expectation that the condition will last 90 days; premium charges and policy expenses waived while on claim.
Cons: maximum monthly benefit $11,600, not to exceed 5% of the initial death benefit
Joint Survivorship (Second-To-Die) Life Insurance with “Chronic Illness” Benefit
Nationwide “Nationwide YourLife® NLG SUL II” recommended
(rider not in CA as of 2/24) (product not in NY as of 2/24)
Long-Term Care Rider
Pros: allows both insured access to LTC benefit, not just the survivor; provides up to half of the total death benefit for each person for covering LTC expenses; cash pay out (indemnity-style benefit a direct payment, not reimbursement); monthly benefit two times HIPAA per diem amount times 30, $24,600 in 2024. This monthly $24,600 is an ample benefit assuming the face amount of coverage is large enough.
Cons: lesser of monthly two times HIPAA or 2% specified policy face amount
Penn Mutual “Survivorship Indexed Universal Life” Chronic Illness Accelerated Benefit Rider
Pros: 24% of total death benefit annually, in cash, maximum $240,000 per 12 month period or per diem limitation ($410 per day in 2024).
Pros: cash direct to policy owner is the indemnity method of payment much preferable to reimbursement method; no charge for rider, for a qualifying event the accelerated benefit interest rate charge will reduce policy cash values and death benefit
Cons: last surviving person insured benefit; IRS approved per diem limit amount; yearly certification by doctor; requires a licensed health care practitioner to certify that continuous care in an eligible facility or at home is expected to be required for the remainder of the insured’s life
Single Premium – Limited Pay
“YourLife CareMatters® II” Nationwide recommended
(“YourLife CareMatters®” available in NY with some different provisions)
categorized as a Qualified Long-Term Care Insurance policy under Internal Revenue Code Section 7702B(b) for “Qualified Long-Term Care Insurance” (LTC benefit); view details
Pros: cash indemnity benefit method; premium guaranteed never to increase; 20% residual death benefit, even if all LTC benefits are used; inflation benefit options none, 3% simple, 3% compound, 5% compound, US Medical Care Inflation; single premium, 5 pay, 10 pay premium options, also pay annually or monthly to age 65 (available for issue ages 30-54), pay annually or monthly to age 100 (available for issue ages 30 – 65); Refund of Premium on Surrender option subject to a vesting schedule
Cons: less of a death benefit than a Universal Life with a LTC rider or Chronic Illness rider
“Nationwide CareMatters Together (SM)” (not in NY, CA)
Life insurance for two with cash Indemnity long-term care benefits
single premium, 5 pay, 10 pay, pay to age 100 of older insured, premium options; inflation benefit options: none, 3% compound for 20 years, 3% compound for life, 5% compound for life;
“Asset-Care I” , “Asset-Care IV” State Life
Pros: base policy LTC benefit; Whole Life: guaranteed cash value accumulation; optional rider has a choice of 5% compound inflation protection, lifetime, guaranteed fixed premiums. This inflation protection with lifetime benefit, non cancelable, is the holy grail of LTC insurance to fund worst case scenario like dementia. Return of Premium; 4% guaranteed interest; fixed premium, cannot go up, noncancelable, unlike conventional LTC coverage; most policy holders to this as an annual bill but you could do single pay; also has 3% simple, 3% compound, 5% simple inflation protection options.
Cons: reimbursement method; if Asset-Care Plus Rider selected, additional premiums are required
“SecureCare III” Securian Financial issued by Minnesota Life (not in NY, CA)
Life – LTC hybrid
Long-Term Care and Nonparticipating Whole Life, endow age 120;
Features and Options: LTC benefit; single premium, 5, 7, 10, 15 year premium options; return of premium subject to a vesting schedule; inflation benefit options: 3% and 5% simple, 3% and 5% compound; couples discount; Long-Term Care Benefit Duration options: 4, 5, 6, 7, 8 years; Reduced Paid-Up Benefit; Guaranteed minimum death benefit: 10% of the base face amount or $10,000, whichever is less; Acceleration for Long-Term Care Agreement 2 or 3 years- Automatically included; 15 years premium longest premium years solve
Pros: cash indemnity benefit method; maximum monthly LTC benefit not subject to IRS per diem limitations; premiums can leverage significant LTC benefits; 5% compound inflation option
Cons: level death benefit as a non-par whole life
“MassMutual CareChoice One” MassMutual (also available in NY)
Pros: single premium Whole life with LTCi rider; dividends earned as a participating whole life increase LTC benefit pool; Qualified LTC insurance policy benefit IRS code 7702B(b); whole life guarantees; dividends earned, non guaranteed, increase death benefit and policy surrender values; guaranteed policy surrender values that increase over time; inflation protection option
Cons: reimbursement method; 48 month benefit period; (not available in CA)
Lincoln MoneyGuard® II Lincoln (all states)
(pricing improvements effective 1/22/2024)
Pros: Inflation protection options 3% compound and 5% compound; vested Return of Premium option, the vested option graded from 70% to 100% over 6 years; international benefits; residual death benefit; couples discount, both partners need not apply
Cons: reimbursement method
Term Life Insurance with Living Benefits
Transamerica
“Trendsetter® LB” with three benefits: chronic illness accelerated death benefit (ADB), critical illness ADB and terminal illness ADB.
Available in CA; not available in NY as of 3/2024
Pros: Conditions do not have to be permanent; Cash benefit, an indemnity style benefit rather than the more limiting reimbursement method. The amount available for acceleration is very good for the Chronic Illness; accelerate 24% of the face amount per 12 month period, which is the gold standard of the best available acceleration amount out there for permanent life insurance plan including Penn Mutual; Aggregate maximum chronic illness is 90% of the face amount or $1,500,000, whichever is less
Prudential Living Needs Benefit (SM) Rider Nursing home option after confined to an eligible nursing home for at least 6 months and expected to remain for rest of life; maximum age 60 to include rider. (also available in NY and CA)
Assurity Life Critical Illness Rider. for additional cost “Assurity’s LifeScape® NonMed Term 350”, Chronic Illness benefit, permanent care in a nursing facility, no additional cost
Annuities with Long Term Care Rider (Multiplier)
Lincoln “Lincoln Long-Term Care Fixed Annuity”
State Life “Annuity Care II”
Forethought “ForeCare Fixed Annuity”
Note: Carriers with “Long Term Care” as part of their benefit name are both IRC 7702B and IRC 101(g) tax qualified and offer more comprehensive coverage. All carriers listed are IRC 101(g) tax qualified. Those named as a “Chronic Care” benefit, they are only IRC 101(g) tax qualified.
101(g) “Accelerated DB for Chronic Illness”; does not fall under health regulations
7702B Intended to be Qualified Long Term Care Insurance
Note: cost of insurance charges are subject to change up to the maximum cost for many products
Note: Recertification details for eligibility for benefits are incomplete. For the most part recertification is required every 12 months, some limit that annual review to only as often as reasonably necessary, some paid by company
The IRS per diem limit for 2024 is $410 per day ($12,470 per month)
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Licensed Agent: Sean Drummey
phone: (910) 328-0447
email: spdrummey@gmail.com
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Last partial update: 3/18/2024 – Benefits subject to change. Information is accurate and current to the best of my knowledge but cannot be guaranteed. All information are summaries. For full details please contact me or the carrier.
3/18/2024 Transamerica Trendsetter LB checked
2/13/2024 Nationwide checked, rider available in CA
1/26/2024 Lincoln MoneyGuard II
1/10/2024 Lincoln
1/10/2024 Symetra
1/5/2024 Nationwide CareMatters II, CareMatters Together
1/5/2024 Penn Mutual revised
1/3/2024 American National
1/5/2024 Securian revised
12/20/2023 John Hancock
6/6/2023 Accordia removed
4/3/2023 American General revised
12/28/22 Protective revised
7/8/2022 Prudential checked
11/9/18 Voya information removed. Voya ceased individual life sales 12/31/2018
10/17/18 AXA update for CT
6/29/18 United of Omaha Long-Term Care Rider available July 1, 2018
4/26/2017 revised “Asset-Care I” State Life