LTC Riders

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Mar 18, 2009 1:26 pm

Aside from Hartford, does anyone know of any annuities with LTC riders?

Mar 18, 2009 1:42 pm

PRU and Transamerica

Mar 18, 2009 3:57 pm

Protective has one that the income guarantee jumps to 10% of the income base if the owner goes into a nursing home. 

Mar 18, 2009 4:11 pm

Transamerica doubles the guaranteed withdrawal benefit for LTC

If they're taking 6% @ age 70, and go into LTC, then they get 12% for time they remain in LTC treatment.  I've used it on a couple of people who couldn't qualify for the insurance.  1 year waiting period, and then elimination period of 180 days.  

Mar 18, 2009 6:44 pm
gvf:

Transamerica doubles the guaranteed withdrawal benefit for LTC

If they're taking 6% @ age 70, and go into LTC, then they get 12% for time they remain in LTC treatment.  I've used it on a couple of people who couldn't qualify for the insurance.  1 year waiting period, and then elimination period of 180 days.  



Is the withdrawal base the same as the accumulation value with TransAmerica?  Or is it a separate calculation?

Mar 18, 2009 8:13 pm

the living benefits/ltc benefits are calculated on the Withdrawal Base.  Guaranteed % or the market returns.  During LTC they use the same calculation off the Withdrawal Base.  Only, instead of 5/6/7%, it looks like 10/12/14% (based on the age bands).  Obviously, you will run the Cash value to 0 pretty quickly in a bad/normal market. 

does that answer your question?

Mar 18, 2009 8:28 pm

Does the Withdrawal base have a guaranteed growth % (separate from the contract value)?

Mar 19, 2009 12:23 am

If you need an annuity to sell LTC, then you shouldn't sell LTC.

 
If you need a LI policy to sell LTC, then you shouldn't sell LTC.
 
The best LTC policies are... (wait for it)... LTC POLICIES!!!
Mar 19, 2009 8:44 am

What if the client is uninsurable?

 
Just sayin'.
Mar 19, 2009 9:37 am

My situation is this:  Client has loads of money, doesn't know if he will need LTC and wants a way to self-insure.  So, the LTC rider may be of use to him.

Mar 19, 2009 10:45 am

You may want to consider (if he's insurable) a LTCi policy with a permanent LI policy (WL or GUL).  The permanent DB will replace any premiums paid into the LTCi policy if he never uses it.  If you use a WL policy, the CSV will be accessible if he changes his mind. 

 
Until we have a full set of facts though, it's hard to come up with a more specific recommendation.  By the way, what do you mean by "self-insure"?
Mar 19, 2009 11:51 am

He's 54, has millions liquid and will inherit at least double what he has when his parents die.  No wife, no kids, no one.  Doesn't have life insurance because there is no one to leave it to. 

 
Feels that he doesn't want to pay for LTCi when he might not need it.  And if he does, he can probably pay for it out of pocket.
Mar 19, 2009 12:09 pm

He probably could, but why would he want to?  It is all about whether he'd want to pay wholesale or retail prices for LTC.  Fact is, I can't predict where he'll be financially if/when he needs to have LTC.  For all we know, he'll have spent his money, taxes are higher than today, the market has hit him hard, or all three at the same time.  Why not buy the LTCi just in case the worst-case senario hits him? 

 
If he doesn't have a family to leave his money to, who will his money go to?  Does he have a charity or cause he feels deeply about?  There still may be a use for life insurance in this case. 
Mar 19, 2009 8:54 pm

The client can't self insure.  He can choose not to insure.  It's not the same thing.   Does he care about leaving money behind at death?  If he doesn't, there is no reason to buy coverage.  If he does, it will make sense, but with his assets, I'd go with life insurance over LTCi.

Mar 20, 2009 10:29 am

LTC is about leveraging the dollars.  Why pay $1 of your money for $1 worth of service if you can pay $.25 of your money to buy and additional $.75 of an insurance company's money and use that for the $1 worth of service.  Smart people understand the risk/reward there. 

 
 
Mar 21, 2009 1:18 am

Just wanted to chime in again with the Life Insurance idea. Just had a client who should get some form of LTC. She's got a lot of cash in CDs she doesn't need (pension income is great). She can't qualify for LTCI with her conditions, but she'll likely pass a life insurance test with one of those LTC riders (looking at the John Hanc*** product, can't remember the name right now). If she doesn't use it, the kids have some more inheritance, which is fine by her.

Mar 21, 2009 6:59 am

"LTC is about leveraging the dollars.  Why pay $1 of your money for $1 worth of service if you can pay $.25 of your money to buy and additional $.75 of an insurance company's money and use that for the $1 worth of service.  Smart people understand the risk/reward there."
 
The answer to your question is that you may be paying $.25 of your money and not need any service.   That's why plenty of people who can afford LTCi don't buy LTCi.  However, many of these people will buy life insurance instead.
 
Life insurance is competition for LTCi.  The difference is that LTCi will reimburse for the cost of the claim on a monthly basis.  Life Insurance won't reimburse for the cost of the claim until after death occurs.  It just happens to be a guaranteed amount and it will pay even if there isn't a claim.  For this reason, if someone can afford the cost of care, but still wants to leverage their dollars (rather pay an insurance premium than the cost of care), life insurance is the better route than LTCi.