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Long Term Care Blog

Mass Mutual CareChoice One Fails to Deliver

by Jack Lenenberg

Mass Mutual CareChoice One Review and Rating

Updated July 30, 2020

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 Nationwide Care Matters II and OneAmerica 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.  These non-guaranteed dividends will not increase your long term care monthly benefit.  These dividends will only serve to extend your benefit period 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 Nationwide CareMatters II policies, one of the best selling and most flexible policy contracts.

Nationwide CareMatters II will provide you with up to 7 year benefit periods, affordable built-in 3% or 5% compound inflation protection; and a cash indemnity contract.  Mass Mutual will guarantee you 4 year benefit periods only, and is a reimbursement model.  Additionally, the cost of inflation protection through Mass Mutual is a non-starter.

With the Nationwide cash indemnity policy you will always receive your maximum monthly LTC benefits.  Unlike the reimbursement policy through Mass Mutual which requires receipts and proof of loss forms at claim time, the Nationwide cash indemnity contract will not require you to submit any receipts or proof of loss.

The Nationwide CareMatters II policy also will retroactively cover the cost of your care for the 90 day elimination period.  The Mass Mutual CareChoiceOne policy will not pay you any benefits for your initial 90 days of claims (deductible).   

For the sake of this comparison, we will use 6 year benefit periods with Nationwide.

We will also be overly generous to Mass Mutual and also assume Mass Mutual pays out to you all of its current scale non-guaranteed dividends. Which in my opinion, will NEVER happen. (dividends are actually being reduced in this interest rate environment).

Female age 60

Age 60: Nationwide $4405 month, $341,899 Pool; Mass Mutual $5583 Month, $267,994 Pool (guaranteed benefits)

Age 80: Nationwide $7955 month, $617,508 Pool; Mass Mutual $5593 Month, $329,885 Pool (Nationwide Guaranteed; Mass Mutual non-guaranteed)

Age 85: Nationwide $9223 month, $715,861 Pool; Mass Mutual $5583 Month, $349,210 Pool (Nationwide Guaranteed; Mass Mutual non-Guaranteed)

Male age 60

Age 60: Nationwide $4987 month, $387,106 Pool; Mass Mutual $6376 Month, $306,050 Pool (guaranteed benefits)

Age 80: Nationwide $9007 month, $699,157 Pool; Mass Mutual $6376 Month, $388,462 Pool (Nationwide guaranteed; Mass Mutual non-guaranteed)

Age 85: Nationwide $10,442 month, $810,515 Pool; Mass Mutual $6376 Month, $413,917 Pool (Nationwide guaranteed ;Mass Mutual non-guaranteed)

The differences with the long term care insurance benefits with these two policies are staggering.

As you can see, even assuming the Mass Mutual non-guaranteed dividends are entirely paid out to you, the Mass Mutual CareChoice monthly LTC benefits and available pool of money are significantly lower for you than your Nationwide CareMatters II benefits will be assuming the same single pay premium deposit.  The benefits are not even close.

This is a result of Nationwide offering you automatic compound inflation on your relatively high initial monthly long term care insurance benefit.  The Mass Mutual CareChoice 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. Nationwide CareMatters II will retroactively pay your long term care benefits to you for your first 90 days.

So, you will easily be able to receive significantly more LTC benefits, and you also be able to have a cash indemnity policy, too through alternative underwriters:    You will have a multitude of policy options too,  The Securian SecureCare policy is priced similarly to the Nationwide policy, and it also provides cash indemnity benefits.

Nationwide CareMatters II illustration male age 60

Nationwide CareMatters II illustration female age 60

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

In addition to Nationwide CareMatters II, the OneAmerica  Asset Care policy is an additional market leading hybrid long term care insurance policy.  OneAmerica Asset Care is unique in that it will offer you Lifetime LTC benefit periods, rather than limited benefit periods such as 4 years with Mass Mutual (or 7 years with Nationwide). 

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

To keep this comparison simple, I will compare the OneAmerica 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 OneAmerica.

Female age 60

Age 60: OneAmerica $7562 Month, Unlimited Lifetime Pool; Mass Mutual $5583 month, $267,994 Pool

Age 80: OneAmerica $7562 month, Unlimited Lifetime Pool; Mass Mutual $5583 month, $344,596 Pool (non-guaranteed with Mass Mutual)

Age 85: OneAmerica $7562 month, Unlimited Lifetime Pool: Mass Mutual $5583 month, $370,020 Pool (non-guaranteed with Mass Mutual)

Male age 60

Age 60: OneAmerica $7562 Month, Unlimited Lifetime Pool; Mass Mutual $6376 month, $306,050 Pool

Age 80: OneAmerica $7562 Month, Unlimited Lifetime Pool; Mass Mutual $6376 month, $398,535 Pool (non-guaranteed with Mass Mutual) 

Age 85: OneAmerica $7562 Month, Unlimited Lifetime Pool; Mass Mutual $6376 month, $432,668 Pool (non-guaranteed with Mass Mutual)

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 OneAmerica Asset Care policy will provide each 60 year old insured with $7562 month, and Lifetime Unlimited LTC 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 $7562 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 $8,000 - $10,000 monthly benefits.  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 policy from a Fidelity Investments employee.  You may also be pitched the New York Life Asset Flex policy, which is also a very poor value in this marketplace.  Please be aware Fidelity Investments is contractually obligated to sell you either the Mass Mutual CareChoice policy or the New York Life Asset Flex policy to you.  These two policies are the only long term care insurance policies Fidelity is allowed to sell you.  The non-competitive nature of the Mass Mutual CareChoice One policy (and New York Life Asset Flex) 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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