Long Term Care is available via LTCAccess rider that is optional with the company’s Whole Life Legacy series of insurance products. A medical examination is at times necessary and the company advises that the life insurance and the LTC rider have to be underwritten. The base life insurance provides the contributor with tax advantages, protection, and cash value accumulation benefits. This sets it apart from other life insurance products. The LTC rider allows the client to use a part of their death benefit amount to cater for their long term care expenses. If this happens, the amount used up under the LTC rider is deducted from the death benefit. The life insurance policy with LTC rider is targeted at consumers who want the benefits of life insurance but are concerned that they may require long term care at some point in their lives. Those looking for products dedicated to long term care will probably be better off with other LTC-oriented products.
How does it work?
Once you have purchased an insurance policy with the LTCAccess rider elected, you can have as much as 90% of your death benefit accelerated to cover your long-term care expenses if you find yourself requiring such. Those who use the policy dividends to increase their life insurance amount can also use the face amount of this to accelerate their benefit.
Premium and charge guarantees
The rider premiums, dividends, and charges are not guaranteed. There may be increases after the first year but which will never exceed the guaranteed maximum. The LTC rider covers expenses of plans prescribed by a licensed practitioner. Generally, these will include intermediate and custodial care, assisted living, nursing, adult day care and hospice services. There is, however, a 90 day elimination period during which no benefits are payable.
Who is eligible for benefits?
An insured person will be eligible for LTC benefits if within the last twelve months of the policy, a licensed practitioner certifies that you need assistance with at least two of the six activities of daily living or you are diagnosed with a cognitive impairment that requires you to be under continued supervision. The company will cater for all LTC expenses each month up to a maximum amount for each month stipulated under the contract. The benefits will be received till the point where the entire amount available for acceleration has been exhausted. The remaining amount will be paid out as a death benefit.
Additional policy information
The rider benefits are usually not taxed as long as you or your spouse is the owners of the policy. The death benefit will reduce each month with the amount paid out as monthly LTC benefit. For each payment, there will be a corresponding reduction in the policy’s surrender value. The amount you are required to pay as premium will also reduce with each payout based on the exact amount paid out as LTC benefits. The policy dividends will however not be affected and will continue to be derived from the full amount of the policy. The dividends are however not guaranteed.