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Long Term Care Blog

LifeSecure Long Term Care Insurance Review

by Jack Lenenberg

Life Secure Long Term Care InsuranceFounded in 2006 as a wholly owned for-profit subsidiary of Blue Cross and Blue Shield of Michigan, LifeSecure Insurance Company focuses on long term care insurance, marketing today only within the group worksite arena. 

Initially, LifeSecure marketed to individual applicants as well, however LifeSecure announced its exiting of the individual marketplace effective November 1, 2016.

LifeSecure is not a household name as an insurance company, and as such I do receive consumer inquiries from consumers that are being offered the LifeSecure LTC insurance policy through their employer.  Most of the inquiries I receive are twofold: Is the policy a good value and is LifeSecure is a stable insurance company.

Review of the LifeSecure long term care insurance options

The LifeSecure policy options are relatively simple.

1. Choose your Lifetime Benefit Amount. 

Select an amount between $100,000 and $1,000,000.  LifeSecure refers to this as your "Benefit Bank."

The industry refers to this as your "Pool of Money."

2. Choose your Monthly Benefit.

Select a percentage of your Benefit amount.  1%, 2%, or 3%.

Example:  Benefit Amount is $200,000.  

3% of $200,000 is $6000 monthly benefit.  Benefit period is 2.8 years.

2% of $200,000 is $4000 monthly benefit. Benefit period is 4.2 years.

1% of $200,000 is $2000 monthly benefit. Benefit period is 8.3 years.

3.  Select your Inflation Protection option.

Guaranteed Future Purchase Offers (never recommended)

3% Automatic Compound Benefit Increase option 

5% Automatic Compound Benefit Increase option

Today, most people are buying 3% compound inflation protection

Selecting Guaranteed Purchase Options (GPO) on long term care policies is one of the biggest mistakes you can make as a buyer of long term care insurance, especially if you are under age 65.   The guaranteed purchase options will be priced not only at your attained age in the future but also at the rates LifeSecure has in effect at that time.  Many wholesalers in the group marketplace will push the GPO because it is the lowest initial premium and the only goal of the wholesaler is to sign up as many employees as possible for the plan.  You need to make sure you properly address inflation protection within your policy.  Selecting a form of automatic inflation protection whether 3% or 5% compound will always be your best option.

LifeSecure long term care insurance policy's additional standard benefits

Benefit Wait Period (90 Calendar Days)

Once you are certified as being chronically ill, you must satisfy the Benefit Wait Period which is similar to your deductible to start receiving your benefits.  Your Benefit Wait Period must be satisfied only once in your lifetime.

International Coverage Benefit

100% of your monthly benefit is available on an indemnity basis for 365 days for facility care if outside the United States; 50% of your monthly benefit is available for 365 days for Home Care if outside of the United States

Waiver of Premium upon eligible claim

Your premium is waived beginning on the first day you start receiving your benefits.

Flexible Benefit 

You may use up to 50% of your monthly benefit if no licensed care is provided; or up to 50% of unused benefit if licensed care is provided.

The Flexible Benefit will allow you to be reimbursed for care provided by informal caregivers, family or friends; or the cost of home modifications, care related products or supplies, or durable medical equipment.  

Life Secure long term care insurance optional benefits

Money-Back Promise (Not worth the cost)

Return of Premium benefit.  If you die while your policy is in force a percentage of your premiums less claims paid will be returned to your beneficiaries.

Non-Forfeiture Benefit (Not worth the cost)

If you cancel your policy after it is in force for at least 3 years this rider allows you to receive a reduced paid up policy equal to the sum of your premiums paid-in by you.

Shared Care 

Shareability Life SecureThis rider gives couples the ability to share each other's Benefit Bank in the event one partner has exhausted his/her entire Benefit Bank.  The Shared Care rider is very popular on all long term care insurance policies and is usually cost efficient for couples.

So, how does the LifeSecure long term care insurance cost compare with other policies?

Long term care insurance policies can vary greatly for the exact same benefits.  There are some companies today that can be 2x or 3x as expensive as other companies (for example New York Life, Northwestern Mutual, John Hancock have very high rates, especially for women).

Today, we see that LifeSecure is in the competitive range of the price spectrum with companies that also include Mutual of Omaha, Genworth, Mass Mutual and National Guardian Life.

For example, here are combined monthly rates for a married 55 year old couple in Illinois.

$4500 monthly benefit, $200,000 Benefit Bank, 3% compound inflation protection

Genworth $209.20

National Guardian Life $218.00

Mutual of Omaha $252.49

LifeSecure $253.06

Mass Mutual $258.83

Thrivent $334.04

State Farm $357.00

Northwestern Mutual $549.98

New York Life $562.21

Price Comparison Spreadsheet

If we add the popular Shared Coverage rider to the above scenario for the 55 year old Illinois couple:

$4500 month, $200,000 Benefit Bank with Shared Care ($400,000 to share), 3% compound inflation

Genworth $255.42

National Guardian Life $263.00

Mutual of Omaha $292.89

LifeSecure $303.66

Mass Mutual $333.89 (3 Pools to Share)

Thrivent $417.55

New York Life $946.99 (3 Pools to Share, ...but YIKES!)

Price Comparison with Shared Care added 

So, you can clearly see that the LifeSecure long term care insurance policy is reasonably priced.  It is not the least expensive policy, however it is in the range, which is good.

So, the premium rates are fair, what else do you need to know?  Well, how about company strength and stability?

Financial Ratings of Life Secure Insurance Company

With long term care insurance, you may own your policy for 20 or 30 years or longer before you make a claim.  If the financial meltdown in 2009 taught us anything it is that financial ratings and stability of the underlying company is important.  It is important for you to know that your company will be there for you in 20 or 30 years.  

How is LifeSecure rated by independent rating agencies?

LifeSecure is a subsidiary of Blue Cross and Blue Shield of Michigan. LifeSecure was formed in 2006.

Life Secure is not yet rated by AM Best because it was formed 10 years ago and is not seasoned enough as a company.

The parent company Blue Cross and Blue Shield of Michigan is rated A- by AM Best.  However, parent companies and subsidiaries are separate and distinct entities so the A- rating that BCBS of Michigan carries does not apply whatsoever to LifeSecure Insurance Company.

Life Secure is rated by one of the independent major rating agencies, Weiss.  

The Weiss Safety Rating for LifeSecure Insurance Company is "D" (Weak).

Weiss:  "D" (Weak). The company currently demonstrates what we consider to be significant weaknesses which could negatively impact policyholders. In an unfavorable economic environment, these weaknesses could be magnified.

As of September 30, 2016 the admitted assets of LifeSecure are $262 million.

See the below link for the financial ratings and assets of the leading long term care insurance underwriters.

Financial assets and ratings of long term care insurance underwriters

LifeSecure Long Term Care Insurance policy conclusions

In reviewing the LifeSecure policy contract, LifeSecure offers you a flexible policy for a good price initially.    LifeSecure is one of 5 companies today in the traditional long term care insurance marketplace that offers well-priced premiums.  

These 5 companies are Mutual of Omaha, Mass Mutual, Genworth, Life Secure and National Guardian Life.  

Of these 5 companies, simply based upon financial ratings however, you would alternately want to consider Mass Mutual (A++) or Mutual of Omaha (A+) for your coverage.  

Mutual of Omaha, in particular, has a very flexible contract too, and has many of the same features as the Life Secure policy (Calendar Days waiting period, Cash Benefit, monthly reimbursement model).

My additional concern with LifeSecure lies in the fact it is underwriting multi-life group policies with simplified underwriting.  The Federal Employees just experienced rate increases of an average of 83% on its group long term care plan that also was issued with simplified underwriting.

Simplified underwriting will benefit you if you are unhealthy and can not medically qualify for a policy.  Should you be in good health, it will benefit you to apply for long term care insurance with a company that only issues policies after full medical underwriting.  

For premium stability purposes you might want to be with a company that is not issuing policies to generally everyone which is the case with worksite marketing.

Call us to receive free customized quotes and comparisons

Have questions? Want to find your best options?  I work with all of the leading LTC insurance companies including Lincoln Moneyguard, Mutual of Omaha, State Life/OneAmerica, Pacific Life, National Guardian, LifeSecure, Global Atlantic, ForeCare, John Hancock, Transamerica, Nationwide and more.  For your customized illustrations and personal advice, call me today at (800) 891-5824.

Thank you for reading my blog. 

Signature Ltc

Jack Lenenberg

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