Annuities with Long Term Care Benefits
We have found that there are other solutions to the need for long term care protection besides long term care insurance. We pride ourselves in our ability to offer these alternative solutions.
Insurance companies are growing increasingly adept at designing products which can satisfy two needs at the same time. These products are called linked products, and normally provide a long term care benefit inside either an annuity or a life insurance policy. Thus far, the following designs are available from a few leading insurance companies:
- Annuities with long term care riders… These are basic annuities which offer all of the advantages annuities possess. But in addition, a rider at nominal cost can create a pool of money that can cover some long term care costs, usually for a limited period. They are usually funded by repositioning a current asset, either an existing annuity or a bank CD. One can often improve on ones current return and at the same time cover long term care costs. These products are ideal for a person who cannot qualify medically for long term care insurance and yet has a great need to be protected.
- Life insurance with long term care riders… These are whole life or universal life products that include long term care riders. They can be funded with single premiums or premiums over time. There is a death benefit at an appreciated amount that serves to transfer assets like traditional life insurance policies. But in addition, there is a substantial long term care benefit that can be utilized when long term care is needed. The underwriting for these policies may or may not be more liberal than underwriting for traditional long term care insurance policies. These products are ideal for a person who primarily wants to be protected against long term care costs but yet has a desire to transfer any remaining assets to heirs. This person may object to paying annual long term care insurance premiums and possibly not ever getting their money back.
- Life insurance with accelerated death benefits… These are traditional whole life or universal life products that include a benefit paid before ones death if long term care is needed. There are varied requirements as to when one can qualify for this benefit, and in some policies, these requirements are substantial. Any long term care benefit is deducted from the eventual death benefit. The underwriting for these policies is normally underwriting for mortality only, and some medical conditions which can create morbidity but not mortality may still be accepted. These products are ideal for a person who mainly has a life insurance need but also wants protection if nursing care, usually skilled care or hospice, is needed.
We are constantly searching for new products which can cover long term care costs, and are working hand in hand with major insurance companies to create such products.