Looking for LTC Insurance with 5% compound inflation and lifetime benefits ?

Written by Tom Riekse Jr | Nov 25, 2014 3:29:09 PM
For many years, the go-to product design for standalone LTC Insurance included 5% compound benefits with unlimited coverage.  Why not?  It was easy to sell, as the average premium in the late 90's was  a mere $1,500.
The good times didn't last, however.  The actuaries missed the mark on pricing and it ends up that recent claim experience shows that people with lifetime benefits, like a teenager with an Amex card, end up claiming earlier and more often.  Some companies like Genworth are trying to recover from this, and it is a big reason for inforce premium increases.

For those looking for unlimited coverage, however, all is not lost! 

One product that offers such protection is through OneAmerica  and is called Asset Care . Asset care combines a guaranteed premium whole life plan with an accelerated death benefit for tax qualified LTC needs. Policyholders can add an extension of benefit rider that can increase coverage, including lifetime benefits and 5% compound rider.

Why can their actuaries offer this type of coverage when standalone coverage can't?  it's because in order to get to the unlimited benefit rider policyholders first have to acclerate their death benefit.  That means they are giving up future death benefits and in many cases the single premium they have deposited in the plan.  With standalone lifetime coverage there is no incentive not to claim earlier and often.

The downside to life/ltc plans has to do with the interest rate risk.  If rates rise dramatically the money is tied up in the policy and can't be redeployed without losing the LTC benefit.  

Want to learn more?  Join a conference call at 2:00 PM Central on December 3rd to learn more.  You can reserve a spot by emailing news@ltcipartners.com .

 

 
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