Life Insurance with Long Term Care, We’ve Got the Best Rates

Life Insurance with Long Term Care typically provides accelerated death benefits for chronic illness that pay out 2% of the death benefit per month.

For example, a $100,000 policy will pay out $2K per month. A $25 K policy pays out up to $5K per month.

The key features are:

1. The policy pays out it REDUCES the death benefit by the amount received 
2. It pays out when you can’t do 2 of the 6 activities of daily living (ADL) like bathing, feeding yourself, going to the bathroom, moving around
3. The benefit gets paid as cash to the owner, which eliminated the need for receipts from a medical facility.

In other words, you can pay your child, grandchild or whomever to assist you with home care, even if they’re not licensed. It’s really cool. All you have to do is qualify for 2 of the 6 ADLs and you get the money.  

Once you receive the money you may spend it as you see fit. Typically the cash is used to cover medical expenses, but some opt to take a trip around the world!  It’s entirely up to you!  

A terminally ill policyholder may, on the other hand, decide to leave the death benefit in place for their beneficiary. Remember, any money taken through accelerated death benefit will be deducted from your final death benefits. 

Yes. Terminal Illness accelerated death benefit is typically incorporated in permanent and term policies. If your policy doesn’t feature this benefit, you can usually add it as a separate rider. 

Life Insurance with Long Term Care unquestionably adds a new level of protection to your life insurance policy. I would highly suggest contacting your independent agent today to find out what is available for your particular circumstances. 

Some states and life insurance companies have specific limitations on the percentage allowed. Discuss these details with an independent life insurance agent.

Also be aware that any money left on your accelerated death benefit option after your death, will be given to your beneficiary.

Although not all lists of critical illness and conditions issued by insurers are identical, common inclusions are cancers, kidney failure, permanent total disability and terminal illness. Depending upon medical history some individuals may not be covered for certain conditions, but the insurance company will alert those individuals to that fact before they take out their policy. Prepare for the Unthinkable: The Benefits of Critical Illness Insurance

Generally speaking, accelerated death benefit funds aren’t taxable and are treated the same as death benefits.  

However, the tax code is also quite specific about those who qualify. For an accelerated death benefit to be tax exempt, a person has to be either terminally ill with death expected to occur within 24 months, or certified annually as chronically ill by a physician. 

Here’s the scoop. Generally, for federal income tax purposes, life insurance proceeds due to the death of the insured are not taxable and don’t even have to be reported on a federal income tax return. Taxes from A – Z (2013): L is for Life Insurance

An accelerated death benefit should not be used in place of other long-term care coverage. It’s a last resort to financially supplement unanticipated expenses. 

You should also be aware that in some situations, the money may or may not be considered by Medicaid to be income.

So, what happens if you recover from your illness?

If you’ve been approved by the insurance company, you won’t have to repay the money. The drawback is your death benefits will be reduced by the amount paid out. 

If you would like to learn more about accelerated death benefits, please give us a call  – we will happily explain how it works! 

There are a lot of expenses he will incur connected to his disease. Perhaps his wife needs to employ a caregiver. 

In this case, the policy owner will file a claim to accelerate a percentage of the death benefit. This figure is typically between 5% – 24% of the value of the policy.  “The insured becomes eligible through written certification by a physician within the past 12 months. There is a 90-day elimination period“. 

If this gentleman files a claim for 10% of the value of his death benefit, he will receive a little less than $50,000.  The policy’s death benefit will then be reduced by $50,000 leaving a $450,000 death benefit for his beneficiaries. You will need to ask your independent life insurance for an illustration to give you an accurate real-life example.

What I like about North American’s rider is that you don’t have to be confined to a nursing home to exercise it (in most states that is). There is a lot more freedom in how you can disperse the funds as well. The cash can be used for in-home care, or to supplement your household even if you provide your own care. 

This rider is available for all permanent products up to age 75 at policy issue.  A couple of states, California and Kentucky, don’t allow the chronic illness rider and in Minnesota, you must be confined to a nursing home to file a claim.

The other component of the rider is that it pays out up to 75% of the death benefit, while the insured is living, if he or she is diagnosed with a terminal illness. Please be aware there is a cap on this. The maximum payout is $250K! 

You must be diagnosed by a physician as having 2 years or less to live to be considered terminally ill. 

Just about every company has a Terminal Illness Rider or Accelerated Death Benefit Rider, whatever you want to call it… but very few of these cover anything more than terminal illness.

Even if they do cover some sort of long-term care needs, it may only be used if you’re confined to a nursing home.

The good news is, North American Company allows you to use the funds for in-home care. My clients are always excited to hear that this feature is INCLUDED in the policy at no extra charge!!  

If you’ve ever priced long-term care policies, you will agree that this is a great perk! 

Another life insurance company that provides some good protection for living needs is Prudential. This post is getting a bit long, so I’ll just give you a couple quick bullet points about Prudential’s Living Needs Benefit rider.

Long-term care insurance is intended to reduce out-of-pocket costs if someone winds up needing long-term care from a paid provider. Long-term care insurance can pay for a nursing facility or home care, and many policies also cover assisted living, though no policy will pay the full cost of any of these. People usually pay premiums for 20 or 30 years before reaching an age when long-term care is likely. What is Long Term Care Insurance? Stephanie Miles

I am often asked about Long Term Care coverage, and if it can be added to a life insurance policy I am quoting. Most clients have already researched Long Term Care Insurance, and find it to be cost-prohibitive.

As my training aptly put it – “Who should get Long Term Care coverage?” and the shocking answer is – “those that can AFFORD IT!”. 

Even the insurance companies know that cost is the crux of the matter!

So it appears there is finally an affordable way to help pay for some Long Term Care expenses. 

It’a s not gimmick, Long Term Care is affordable and sometimes added for free to life insurance policies!  Let’s check it out! 

If you’re in your 30s, 40s or 50s, chances are you’re still looking at term coverage, as permanent plans are costly…

…that being said, that doesn’t keep you from accessing a wonderful life insurance plan with Living Benefits! One such product is Trendsetter LB (LB stands for Living Benefits) which is only about 30% more expensive than a regular term policy.

This additional premium adds wide-ranging living benefits. If you become chronically, critically, severely or terminally ill or severely cognitively impaired during your lifetime, your benefits become available for use in:

• nursing care facility
• adult day care facility, or
• your home

For example, a 57 year old woman, rated at Preferred Best looking to purchase $100,000 in coverage for a 20 year term pays $421 per year for a traditional term policy without living benefits.

However, the Transamerica Trendsetter LB policy will cost $542 per year and offers full access to death benefits in her lifetime in addition to $100,000 in traditional coverage! 

The following critical conditions are covered: 

She can access up to 2% of the death benefit each month until she uses up the allowable portion. 

• For Chronic illness, the maximum she can access is 90% of her total, and
• For Critical illness, she can access 100% of her death benefit amount

Even after she uses the entire benefit, she still has $10,000 remaining to cover final expenses upon her death. Of course, if the benefits aren’t needed during her lifetime, they will simply be available to her beneficiary after she dies. 

There is a one-time administrative fee assessed when the living benefits commence, as well as a 2-year exclusion period at the beginning of the policy.

A waiting period is also to be expected once the condition is diagnosed. The length of the period is determined by state.

This product offers the broadest range of living benefits available and is easily accessible whether care is needed in a facility or at home.

Benefits vary from insurance company to insurance company, but the following may be included: 

In some instances, an insurance policy owner may need access to their policy funds for a personal emergency.

A few carriers that offer Accelerated Death Benefits, Living Needs Benefits or Long Term Care benefits provide another option, which allows the owner to surrender the policy at a certain time for a refund of premiums paid.  

This is called a Premium Refund Option or Multiflex Surrender Rider. It is a variation on the Return of Premium (ROP) option available on most Term Policies.

In this scenario, the owner purchases a rider, that allows them the freedom upon certain anniversaries, to surrender the policy. They then receive 100% of the premiums paid up to that point.

The following carriers offer this option: 

• ANICO
• United of Omaha
• American General
• Symetra