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Mass Mutual CareChoice One Fails to Deliver

by Jack Lenenberg

Mass Mutual Care Choice One Long Term Care InsuranceMass Mutual CareChoice One Review and Rating

Mass Mutual CareChoice One is a single premium hybrid long term care insurance policy.  Hybrid long term care policies combine cash value life insurance with a long term care (LTC) extension of benefits rider.  

With hybrid LTC policies you can access your life insurance cash value to reimburse you for your long term care needs.  Should you exhaust your life insurance cash value, your policy will provide you with a continuation of benefits for long term care.  

Hybrid long term care policies have proven to be very popular.   Unlike traditional long term care insurance, the hybrid policy premiums are fixed and guaranteed.  Additionally, the hybrid LTC policies address the "Use it or lose it" concern of traditional long term care insurance policies.  

With hybrid policies, you receive:

  • Tax-free LTC benefits should you need long term care, your beneficiaries receive your 
  • Tax-free life insurance benefit should care not be needed.  
  • Return of Premium should you change your mind

Let's take a look at the Mass Mutual CareChoice One hybrid policy to see how it compares to the long established hybrid life/long term care insurance policies such as Lincoln Moneyguard II and State Life Asset Care. (Spoiler alert: The Mass Mutual CareChoice One policy does not compare well, whatsoever.)

Mass Mutual Care Choice One - How does it work?

Mass Mutual CareChoice One is a single premium policy.  This means that you are only allowed to fund the policy with a one-time single premium payment.  You can not elect to spread premiums out over 10 years or for your Lifetime as other policies will allow you to do.

In exchange for your single premium, Mass Mutual will provide you with: a paid up life insurance benefit, or 48 months (4 year benefit period) of long term care insurance.

In essence this is a 2 + 2 design.  The first 2 years of your claim, you will receive an acceleration of your life insurance benefit. After 2 years once your death benefit has been exhausted, the Extension of Benefits rider is effective and you will receive another 2 years of long term care benefits. (Most hybrid Life/LTC policies will provide you with much longer long term care coverage than only a total of 4 years)

The CareChoice One policy is eligible to receive dividends.  These dividends are not guaranteed.  Should dividends be received your extension of benefits might last longer than 2 years.  Possibly your extension of long term care coverage might last 2 1/2 or 3 years past the 2 year life insurance acceleration period for a total of 5 years of LTC benefits rather than 4 years of coverage.  The non-guaranteed dividends will not increase your long term care monthly benefit.  The dividends will only serve to extend your coverage somewhat.

Mass Mutual Care Choice One - How do you qualify for your long term care benefits?

You will be eligible to receive long term care benefits if you are unable to perform 2 of 6 activities of daily living without substantial assistance from another individual or if you are determined to have a severe cognitive impairment (such as Alzheimer's or Senile Dementia).

Prior to receiving benefits Mass Mutual Care ChoiceOne will require you to satisfy a 90 day elimination period (deductible).  This is a service days deductible.  You will have to produce receipts for out-of-pocket expenses for 90 separate dates of service prior to being eligible to collecting benefits.

Mass Mutual CareChoice One - What do you get for your money?

Let's look at a real life case study, a 60 year old married couple.  For illustrative purposes let's assume each partner contributes a premium of $100,000.  What benefits will they each receive?

Age 60 Female: 

$5583 month, 4 year benefit period, no inflation protection; or

$1883 month, 4 year benefit period, 5% compound inflation (equals $5583 month at age 85)

CareChoice One illustration 60 year old female

Age 60 Male:

$6376 month, 4 year benefit period, no inflation protection; or

$1649 month, 4 year benefit period, 5% compound inflation protection (equals $6376 month at age 85)

CareChoice One illustration 60 year old male

So, you can quickly see that if you want to protect yourself from the rising costs of long term care Mass Mutual is not doing you any favors with the inflation protection option.  Mass Mutual will set back your initial long term care benefit if you do include inflation to a monthly benefit that will equal the non-inflation monthly benefit option at age 85.  I would expect that all CareChoice One applications will be for the non-inflation adjusted monthly benefit.

So, how does Mass Mutual CareChoice One Compare to the best hybrid long term care insurance policies?

Well, Mass Mutual CareChoice One compares very unfavorably to tell you the truth.  Mass Mutual CareChoice One is a terrible long term care insurance value.

Let's look at the numbers for the same married couple, aged 60.  $100,000 premium each.

First, let's compare the Mass Mutual policy to individual policies underwritten by Lincoln Financial Group, the best selling Lincoln Moneyguard II contract.

Lincoln Moneyguard II will provide you with 6 year benefit periods, 3% compound inflation and a 0 day elimination period in all settings (no deductible).  The Lincoln Moneyguard II benefits are fully guaranteed.  Mass Mutual by comparison will only provide you with a 4 year benefit period, no inflation protection, and a 90 day elimination period.

For the sake of this comparison, let's be generous to Mass Mutual and also assume Mass Mutual pays out to you all of its non-guaranteed dividends.

Female age 60

Age 60: Lincoln $4832 month, $375,077 Pool; Mass Mutual $5583 Month, $267,994 Pool (guaranteed pool)

Age 80: Lincoln $8727 month, $677,431 Pool; Mass Mutual $5593 Month, $344,596 Pool (non-guaranteed with Mass Mutual)

Age 85: Lincoln $10,117 month, $785,328 Pool; Mass Mutual $5583 Month, $370,020 Pool (non-guaranteed with Mass Mutual)

Male age 60

Age 60: Lincoln $5452 month, $423,154 Pool; Mass Mutual $6376 Month, $306,050 Pool (guaranteed pool)

Age 80: Lincoln $9846 month, $764,263 Pool; Mass Mutual $6376 Month, $398,535 Pool (non-guaranteed pool with Mass Mutual)

Age 85: Lincoln $11,414 month, $885,990 Pool; Mass Mutual $6376 Month, $432,668 Pool (non-guaranteed pool with Mass Mutual)

As you can see, even assuming the Mass Mutual non-guaranteed dividends are entirely paid out, the Mass Mutual CareChoice One long term care insurance monthly benefit payout to you and the CareChoice One available pool of money are significantly lower for you than your Lincoln Moneyguard benefits will be assuming the same premium deposit.  

This is a result of Lincoln Moneyguard offering automatic compound inflation on your relatively high initial monthly long term care insurance benefit.  Mass Mutual Care Choice One will not allow your monthly benefit to keep pace with inflation.  

Additionally, Mass Mutual saddles you with a 90 day deductible period before you can even collect your benefits.  Lincoln Moneyguard II has no deductible at all.

Lincoln Moneyguard II illustration male age 60

Lincoln Moneyguard II illustration female age 60

Now let's compare Mass Mutual Care ChoiceOne with the joint State Life Asset Care policy

In addition to Lincoln Moneyguard II, the State Life Asset Care policy is the other leading hybrid long term care insurance policy.  Asset Care is unique in that it will offer you lifetime benefit periods, rather than limited benefit periods such as 4 years with Mass Mutual (or even 6 years with Lincoln Moneyguard). 

State Life also has a patent on the joint life insurance hybrid long term care policy.  The joint life option with State Life will save couples significant premium.

To keep this comparison simple, I will compare the State Life Asset Care policy to the Mass Mutual CareChoice One policy with neither policy including inflation protection.

Age 60 Couple.  $100,000 premium each Mass Mutual; $200,000 joint premium with State Life

Female age 60

Age 60: State Life $10,083 Month, Unlimited Lifetime Pool; Mass Mutual $5583 month, $267,994 Pool

Age 80: State Life $10,083 month, Unlimited Lifetime Pool; Mass Mutual $5583 month, $344,596 Pool (non-guaranteed with Mass Mutual)

Age 85: State Life $10,083 month, Unlimited Lifetime Pool: Mass Mutual $5583 month, $370,020 Pool (non-guaranteed with Mass Mutual)

Male age 60

Age 60: State Life $10,083 Month, Unlimited Lifetime Pool; Mass Mutual $6376 month, $306,050 Pool

Age 80: State Life $10,083 Month, Unlimited Lifetime Pool; Mass Mutual $6376 month, $398,535 Pool (non-guaranteed with Mass Mutual) 

Age 85: State Life $10,083 Month, Unlimited Lifetime Pool; Mass Mutual $6376 month, $432,668 Pool (non-guaranteed with Mass Mutual)

OneAmerica Asset Care worksheet age 60 couple joint life

Asset Care complete illustration Couple age 60

Once again, for the same premium deposit by the 60 year old couple the benefit differential between the two policies is staggering.

The State Life Asset Care policy will provide each 60 year old insured with $10,083 month, lifetime coverage.  Mass Mutual will offer you $6376 month, 4 year benefit period if you are male, and only $5583 month, 4 year benefit period if you are female.

Obviously to have $10,000 month per person is better for you than to only have long term care benefits of $5500 - $6300 month.  And Lifetime unlimited benefit periods are surely better for you than to only have 4 year benefit periods.  Game over.

Conclusions

Hybrid life/long term care insurance policies are very popular today with consumers and you may be attracted to the guarantees that hybrid long term care policies will provide to you namely fixed guaranteed premiums, long term care benefits if care is needed, and life insurance benefits if care is not needed.  This being said, you still deserve to get your money's worth for your premium deposit.  Just because an insurance company is promising to give you your money back should you never need long term care, does not warrant a foolish decision to accept benefits of $5500 month when your same premium outlay can buy you $10,000 monthly benefit.  You still need to be smart and obtain the best value for your premium outlay.

Fidelity InvestmentsRecently Mass Mutual entered into a marketing agreement with Fidelity Investments.  If Fidelity Investments manages your money, you may be pitched this Mass Mutual CareChoice One policy from a Fidelity Investments employee.  Please be aware Fidelity Investments is contractually obligated to sell the Mass Mutual CareChoice one policy to you.  It is the only long term care insurance policy Fidelity is allowed to sell you.  The non-competitive nature of the Mass Mutual CareChoice One policy benefits underscores why it is critically important for you to work with an independent expert in long term care insurance, whether myself or someone else.

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Jack Lenenberg, J.D., President, LTC Partner

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