Below you will find information on the various options we use when designing Long-Term Care plans; each offers unique features and benefits to allow a Long-Term Care plan to become an integral part of a comprehensive financial plan.  As you will see, there are many factors to consider when determining how to design a Long-Term Care plan, including cost certainty, plan funding, residual value, underwriting, and taxation.

Contact us for a copy of the "Options for Long-Term Care Planning" below or send us your logo, and we can customize a version for your organization.

Long-Term Care Insurance

Plan Funding:  Premium payments are generally ongoing, usually for life, unless a shortened payment period is available for the plan.

Basic Plan Platform:  Provides Long-Term Care benefits "as claimed" like traditional health, auto, or homeowners insurance.

Cost Certainty:  NO - LTC Insurance is essentially a form of health insurance, so future premium increases should be expected.

Residual Value:  There is generally no residual value unless a very costly "return of premium" rider is purchased.

Underwriting:   LTC Insurance is underwritten for "morbidity" and preferred rates can be pretty challenging to obtain.

Features & Benefits:   Flexible Plan Design allows customization, with plan premiums based on the benefit level, duration, and other options selected.

Benefits Taxation:   Benefits are intended to be income TAX-FREE under current tax law, up to federal limits, and will be paid or reimbursed up to the maximum policy benefit for all levels of care of the contract.

Life/LTC Insurance Hybrid

Plan Funding:  This plan offers flexible funding from monthly to lump sum, even using cash values or the exchange of an existing life insurance or annuity contract.  Depending on the carrier, qualified (retirement account) funds can also be used.

Basic Plan Platform:   Life insurance provides a guaranteed death benefit, with LTC benefits based on that death benefit or applicable policy rider.

Cost Certainty:     Yes - All premiums can be fully guaranteed.

Residual Value:   The death benefit is tax-free to heirs like traditional life insurance.

Underwriting:   Simplified underwriting is usually available, including an application with medical questions and a phone interview for cognitive testing.  Medical records may be requested if needed.

Features & Benefits:   Flexible Plan Design allows customization, with plan premiums based on the benefit level, duration, and other options selected.

Benefits Taxation:   Benefits are intended to be income TAX-FREE under current tax law, up to federal limits, and will be paid or reimbursed up to the maximum policy benefit for all levels of care of the contract.

Life Insurance with a LTC or Chronic Illness Rider

Plan Funding:   This plan offers flexible funding from monthly to lump sum, even the potential to use cash values or the exchange of an existing life insurance or annuity contract.

Basic Plan Platform:   The purchase of life insurance provides a death benefit, and the “rider” provides access to that death benefit for LTC benefits.

Cost Certainty:   Yes - All premiums can be fully guaranteed.

Residual Value:   The death benefit is passed onto heirs TAX-FREE like traditional life insurance.

Underwriting:   Normal life insurance underwriting requirements would apply.  However, life insurance underwriting tends to be more liberal than underwriting for LTC insurance.

Features & Benefits:   Basic Plan Design allows for little customization as LTC benefits are generally based simply on the death benefit.

Benefits Taxation:   Benefits are intended to be income TAX-FREE under current tax law, up to federal limits, and will be paid or reimbursed up to the maximum policy benefit for all levels of care of the contract.

Annuity/LTC Hybrid

Plan Funding:   Plan may be funded with a lump sum of cash, qualified funds, or the exchange of an existing annuity or life insurance contract.  Qualified (IRA) funds can also be used under certain conditions.

Basic Plan Platform:   The purchase of an annuity provides an LTC benefit, which is essentially a “multiplier” of the accumulated cash value of the annuity.

Cost Certainty:     Yes - All premiums can be fully guaranteed.

Residual Value:   The death benefit is passed onto heirs like a traditional annuity.

Underwriting:   Simplified underwriting is usually available, including an application with medical questions and a phone interview for cognitive testing.  Medical records may be requested if needed.

Features & Benefits:   Flexible Plan Design allows customization with plan premiums based on the benefit level, duration, and other options selected.

Benefits Taxation:   Benefits are intended to be income TAX-FREE under current tax law, up to federal limits, and will be paid or reimbursed up to the maximum policy benefit for all levels of care of the contract.

Annuity With Income Benefits for

Confinement or ADL Impairment

Plan Funding:   Plan may be funded with a lump sum of cash, qualified funds, or the exchange of an existing annuity or life insurance contract.  Qualified (IRA) funds can also be used under certain conditions.

Basic Plan Platform:   The annuity provides LTC benefits based on the income guarantees of the contract.

Cost Certainty:   Yes - Once the plan is in place, all premiums can be fully guaranteed.

Residual Value:   The Annuity’s death benefit is passed onto heirs; however, Qualified (IRA) accounts may be subject to other rules regarding transfer or taxation.

Underwriting:   Generally, little if any underwriting is required; however, a specified period of time must pass before activation or access to specific income riders.

Features & Benefits: Little customization is available as LTC benefits are based simply on the initial deposit, annuity value, or the contract's income riders.

Benefits Taxation:   Generally, benefits will be taxable in the year taken.

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