Lincoln Moneyguard III Hybrid Long Term Care Policy Review
Lincoln Moneyguard III, the new hybrid long term care insurance policy underwritten by Lincoln Financial Group, is now released.
Lincoln Moneyguard III will replace Lincoln Moneyguard II which will only be available until November 1, 2019.
Lincoln Financial is replacing Moneyguard II with Moneyguard III due to mandatory compliance with state insurance regulators’ new principles-based reserving strategy and the shift to the 2017 Commissioners’ Standard Ordinary mortality tables.
Due to the declining interest rate environment, Lincoln Moneygaurd III in June 2020 is now priced 43% higher than Lincoln Moneyguard II.
Lincoln Moneyguard III - A Hybrid Long Term Care Insurance Planning Solution
Lincoln Moneyguard III is one of the increasingly popular hybrid long term care policies available in the marketplace today.
Hybrid LTC policies, also known as "asset-based" or "linked-benefit" long term care insurance policies, provide you with:
1) income tax-free long term care benefits should you need care;
2) life insurance benefits to your heirs should care not be needed; and
3) a return of premium benefit to get your money back should your needs change.
Your premiums may be paid as a single premium or as flexible premiums over a number of years.
The additional advantage of hybrid LTC policies such as Lincoln Moneyguard III is that your premiums are fixed and guaranteed to never change, unlike premiums for traditional stand-alone long term care policies that are non-guaranteed and may be subject to premium rate increases.
Access LTC Benefits If You Need Care
Provide A Legacy To Your Heirs If You Don't
Get Your Money Back If You Change Your Mind
Lincoln Moneyguard III - How Does This Hybrid Life and Long Term Care Insurance Policy Work?
Lincoln Moneyguard III is a universal life insurance policy with a long term care benefits rider (LTCBR) that will reimburse you for your qualified long term care expenses.
To be eligible for your coverage, Lincoln Moneyguard III has the exact same benefit triggers as all tax-qualified long term care insurance policies.
A licensed healthcare practitioner must certify to Lincoln that you are "Chronically Ill" and that your chronic illness is expected to last 90 days.
Chronically ill means that you are either unable to perform 2 of 6 Activities of Daily Living; or that you require substantial supervision as a result of a severe cognitive impairment such as Alzheimer's or senile dementia.
Once you are certified as being Chronically ill, your Lincoln Moneyguard III policy will reimburse you for your covered long term care expenses.
Covered long term care services include home health care, assisted living facilities, adult day care, nursing facility care, respite care, hospice care, durable medical equipment, home modifications, caregiver training, care planning services, bed reservation benefits, transitional care assistance and alternative care services.
Your long term care benefits rider will initially accelerate your specified amount of life insurance to you and will continue long term care benefit payments to you after the entire specified amount of death benefit has been paid. Long term care coverage will continue for you as long as you remain eligible or until your entire long term care benefits is exhausted.
Lincoln Moneyguard III - How Do You Design Your Hybrid Long Term Care Plan?
Lincoln Moneyguard III can be designed similarly to all long term care insurance policies.
With long term care insurance policies, you have 3 primary core benefit choices to make:
- Monthly long term care benefit - In today's dollars, how much monthly benefit do you want?
- Benefit period - How many years would you like to receive coverage for, at a minimum, should you need care?
- Inflation protection - Do you want to grow your long term care benefits to keep up with rising future health care costs?
Your insurance premium will be derived from the amount of long term care coverage you select.
My experience, however, is that many of you will elect to reverse engineer this equation.
Rather than initially choosing your long term care insurance benefits, you can alternatively select your desired premium amount and the number of years you want to pay your premium.
Your long term care benefits will be derived from the amount of premium you choose to deposit.
So, your plan can be designed either way:
- You choose the LTC benefits > resulting premium
- You choose the premium > resulting LTC benefits
However, should you want to design your Lincoln Moneyguard III policy from the long term care benefits perspective, these will be your choices to think about:
- Monthly Benefit: Choose an initial monthly long term care benefit between $1923 and $19,231 per month
- Benefit Period: Choose a minimum long term care benefit period between 3 years - 7 years
- Inflation Protection: Choose optional inflation protection of either 3% compound or 5% compound to automatically increase your long term care benefits on an annual basis
The Elimination Period with Lincoln Moneyguard III is 0 days. There is no deductible period associated with Lincoln Moneyguard III.
Lincoln Moneyguard III - Return of Premium Options
You will have to select between two Return of Premium options:
- Option 1 - Basic - You will receive a return of 70% of paid premiums
- Option 2 - Vested - A return of 100% of your premiums paid is available to you after year 10 per the vesting schedule
The Basic Return of Premium option will maximize your long term care benefits. The Vested Return of Premium option will require you to deposit 20% more premium for the same long term care benefits. Historically, you should know that cancellation of these policies is extremely rare. With Lincoln Moneyguard III you will probably want to strongly consider the Basic 70% Return of Premium option to maximize your long term care benefits.
Lincoln Moneyguard III - Is There Anything New?
Okay, so we know the Lincoln Moneyguard pricing has increased significantly.
The return of premium benefit decreased from 80% to 70%.
Is there anything within the Moneyguard III policy that is an improvement from Lincoln Moneyguard II?
Well, there are a handful of minor improvements with Lincoln Moneyguard III.
Lincoln is introducing the Transitional Care Assistance Benefit and a Terminal Illness Rider to provide Lincoln Moneyguard III with more a little more flexibility.
Lincoln has increased the available International Benefits.
Issue ages have broadened.
The Transitional Care Assistance Benefit is a new Covered Service that will help you to transition from informal care to formal care. The Transitional Care Assistance benefit will allow you to receive a small limited cash indemnity benefit that does not require receipts of up to $100.00 day for up to 180 days. This indemnity benefit of $100.00 day for 6 months is only available during the first year on claim.
The Terminal Illness Benefit will allow for a one-time claim of between 25% to 75% of the current specified amount of your death benefit if you are declared terminally ill with less than 6 months to live.
The International Benefits is now available to you for 36 months of claims, nursing home or assisted living facility only. Home care is not available if you are on claim outside of the United States.
Lincoln Moneyguard III is now available to ages 30-80.
The biggest change to me however is the new single Long Term Care Benefit Rider design which will allow consistent pricing across all benefit period selections.
The prior Lincoln Moneyguard II policy generally was issued as 6 year benefit period multipliers.
Lincoln Moneyguard III will now afford you the option of moving up to 7 year benefit periods or down to 5 year benefit periods such as what competitor policies offered through Nationwide and Pacific Life will currently allow.
Lincoln Moneyguard III - Should You Buy This Hybrid Long Term Care Insurance Policy?
Lincoln Moneyguard III is one of a handful of hybrid long term care insurance policies. Excellent hybrid LTC policies today are available through Securian, OneAmerica, Nationwide, and Pacific Life.
Over the past 12 months the hybrid long term care marketplace has become ultra-competitive. Underwriters are now issuing policies with benefits that are significant difference makers.
Securian SecureCare and Nationwide CareMatters II each offer you exceptional 100% cash indemnity policies that do not require you to submit any receipts, whatsoever. You receive your maximum LTC benefits every month with a cash policy.
OneAmerica Asset Care offers you Unlimited Lifetime LTC benefits rather than limiting your benefits to up to 7 years.
So, you now have extremely competitive hybrid LTC insurance options to consider.
To best answer your question as to whether you should buy this Moneyguard III policy, let's examine the new Lincoln Moneyguard III pricing with the other hybrid long term care insurance policies you can consider.
To compare long term care benefits on an apples-to-apples basis, let's start with a few demographics: a 50 year old married couple; a 60 year old married couple, and a 70 year old married couple, premium deposits of $100,000 each, 6 year benefit periods.
50 Year Old Married Male, $100,000 premium deposit
| Lincoln | Securian | Nationwide | |||
| Initial LTC age 50 | $4981 month | $5746 month | $6013 month | ||
| Initial Total age 50 | $386,639 | $445,980 | $466,749 | ||
| Inflation | 3% compound | 3% compound | 3% compound | ||
| Benefit age 80 | $12,091 month | $13,946 month | $14,596 month | ||
| Total age 80 | $938,492 | $1,082,510 | $1,132,921 | ||
| Type | Reimbursement | 100% Cash | 100% Cash |
Well, the long term care benefits are reasonably close with Securian and Nationwide for 50 year old men electing to re-position a $100,000 premium deposit. The benefits with Securian SecureCare and Nationwide Care Matters II are presently 20% better than Lincoln Moneyguard III.
Aside from the 20% cost savings, the primary difference for you however is the 100% cash indemnity benefits that both Nationwide and Securian will offer you.
Lincoln is a reimbursement policy and Lincoln will require you to submit monthly receipts for reimbursement, outside of the very small limited Transitional Care Assistance Benefit available for 180 days.
Nationwide and Securian will each mail you a check for your maximum monthly benefit without requiring receipts for your entire policy claim. All of your informal care needs will be covered with both Nationwide and Securian. You may spend your benefits as you wish. No questions asked.
Nationwide Care Matters II will match Lincoln's 0 day elimination period and concierge care coordination services for you, as well.
Securian SecureCare offers you a 100% Return of Premium benefit vs. a limited 70% return of premium with Lincoln Moneyguard III.
Now, let's see if the numbers are as close for a 50 year old female.
50 year old married female, $100,000 premium deposit
| Lincoln | Securian | Nationwide | |||
| Initial LTC age 50 | $4153 month | $5226 Month | $5393 month | ||
| Initial Total age 50 | $322,336 | $405,661 | $418,580 | ||
| Inflation | 3% compound | 3% compound | 3% compound | ||
| Benefit age 80 | $10,080 month | $12,685 month | $13,089 month | ||
| Total Age 80 | $782,413 | $984,645 | $1,016,004 | ||
| Type | Reimbursement | 100% Cash | 100% Cash |
Hmmm, the Lincoln Moneyguard III's benefits certainly do not look compelling here for younger married females age 50.
The Lincoln's Moneyguard III policy is presently 30%% more expensive for 50 year old married females. And Lincoln Moneyguard III is a reimbursement model. When you can get a 100% cash indemnity hybrid LTC policy offered through either Nationwide or Securian for 30-40% less premium than you can buy a comparable Lincoln Moneyguard III reimbursement policy that requires you you to submit receipts to receive your benefits, you definitely have a no-brainer easy decision. Hello Nationwide. Hello Securian.
Let;'s see how the numbers play out for older ages.
60 Year Old Married Male, $100,000 premium deposit
| Lincoln | Securian | Nationwide | |||
| Initial LTC age 60 | $4149 month | $4813 month | $4987 month | ||
| Initial Total age 60 | $322,070 | $373,568 | $387,106 | ||
| Inflation | 3% compound | 3% compound | 3% compound | ||
| Benefit age 80 | $7494 month | $8692 month | $9007 month | ||
| Total age 80 | $581,704 | $674,705 | $699,157 | ||
| Type | Reimbursement | 100% Cash | 100% Cash |
Well, the numbers for 60 year old married men are similar to the numbers for the 50 year old men. Lincoln is 20% more expensive than Nationwide and Securian.
So, once again if you are a male age 60, the primary difference for you will be the 100% cash indemnity benefits that both Nationwide and Securian will offer you. The flexibility that cash policies will provide you to cover all of your informal care needs is helpful, before even factoring in your 20% cost savings.
60 Year Old Married Female, $100,000 premium deposit
| Lincoln | Securian | Nationwide | |||
| Initial LTC age 60 | $3529 month | $4266 month | $4405 month | ||
| Initial Total age 60 | $273,906 | $321,125 | $341,899 | ||
| Inflation | 3% compound | 3% compound | 3% compound | ||
| Benefit age 80 | $6373 month | $7705 month | $8955 month | ||
| Total age 80 | $494,715 | $598,049 | $617,508 | ||
| Type | Reimbursement | 100% Cash | 100% Cash |
For females age 60 we have a 25% cost differential between Lincoln pricing and policies offered through Nationwide and Securian.
Just as with the numbers above for the 60 year old married men, for married females age 60 the cash indemnity policies through either Securian and Nationwide may certainly now be more compelling solutions than Lincoln Moneyguard III is for you.
70 Year Old Married Male, $100,000 premium deposit
| Lincoln | Securian | Nationwide | |||
| Initial LTC age 70 | $3010 | $3418 month | $3471 month | ||
| Initial Total age 70 | $233,637 | $278,969 | $269,459 | ||
| Inflation | 3% compound | 5% compound | 3% compound | ||
| Benefit age 80 | $4045 | $5567 month | $4665 month | ||
| Total age 80 | $313,992 | $454,411 | $362,130 | ||
| Type | Reimbursement | 100% Cash | 100% Cash |
Well, these numbers for 70 year old men are interesting. Securian is giving away 5% compound inflation protection for older males. Securian is a steal for 70 year old married men. (If you are a single male age 70, Securian will give away 5% simple inflation protection to you).
If you are age 70, and in good health, you will want to go directly to Securian and apply now for the SecureCare policy. Run, don't walk.
70 Year Old Married Female, $100,000 premium deposit
| Lincoln | Securian | Nationwide | |||
| Initial LTC age 70 | $2336 month | $3091 month | $2570 month | ||
| Initial Total age 70 | $217,613 | $250,333 | $199,513 | ||
| Inflation | 3% compound | 5% simple | 3% compound | ||
| Benefit age 80 | $3140 month | $4636 month | $3454 month | ||
| Total age 80 | $243,719 | $361,592 | $268,129 | ||
| Type | Reimbursement | 100% Cash | 100% Cash |
Well, if you are female, age 70 and in good health, your answer looks remarkably similar to the answer for 70 year old men above.
Securian is significantly better for 70 year old females than all alternative policies.
Run, don't walk to Securian and apply for its SecureCare 100% cash indemnity policy.
Lincoln Moneyguard III Underwriting
Lincoln Moneyguard III underwriting is very similar to the streamlined underwriting of most hybrid long term care underwriters. Underwriting consists of a 45 minute telephone health interview, an electronic records search (MIB check) and a prescription drug report.
Medical records are generally not requested. Exams are not required. Generally, application interviews are received and reviewed, and policies are issued within 20 days. It is a fairly straightforward quick process as it is with alternative hybrid policy underwriters such as Nationwide, OneAmerica, and Securian.
Lincoln Moneyguard III Hybrid LTC Policy Conclusions
Lincoln Moneyguard has always been a good hybrid long term care policy. I am pleased with its new single LTC Benefits Rider design which competitor policies such as Nationwide Care Matters and Pacific Life also offer which will allow you to efficiently move up to 7 year benefit periods or down to 5 year benefit periods for reasonable premium changes. Moneyguard II did not have this flexibility.
In a vacuum, Lincoln Moneyguard III is a decent policy.
The question for you, however, is whether Lincoln Moneyguard III is your best option.
The recent price increases for Lincoln Moneyguard is unfortunately rendering the Moneyguard policy as a non-starter until the other competitor policies follow suit with similar price increases.
Aside from the obvious price differential today, the hybrid LTC marketplace has become much more competitive from a benefits standpoint in the past 12 months.
Nationwide introduced its 100% cash indemnity CareMatters II policy (not available in CA or NY).
Securian also entered the marketplace with ultra-competitive pricing for its 100% cash indemnity SecureCare policy (not available in CA or NY)
Your premium for a 100% cash indemnity policy through either Nationwide or Securian will presently be significantly less expensive for you than your premium for a reimbursement policy through Lincoln.
Cash indemnity policies will pay out your maximum monthly benefit to you each and every month. Reimbursement policies will only pay you up to your monthly cap if you have the required receipts for formal care.
The fact that the cash indemnity policy will pay your benefits to you when your family, (or friends and neighbors) is providing your care giving may be a very important and critical benefit for you, because often your family will have a loss of time and income in providing your care.
Why are indemnity benefits for informal care so important? Well, if you are like most people you probably will prefer to receive your care at home - and that's exactly where informal care takes place.
The Lincoln Moneyguard III policy tries to address your need for informal care through its Transitional Care Assistance Benefit.
Lincoln Moneyguard III will provide you with a small cash indemnity benefit of $100.00 day for 180 days. So, Lincoln is going to provide you with a small $18,000 cash indemnity pool which must be used within the first 12 months of your claim.
Well, something is better than nothing.
Still, for 20%-30% less premium cost you can buy a more flexible 100% cash indemnity policy through Securian or Nationwide.
Your entire policy will be able to be used for informal care needs with Securian and Nationwide.
For example, if you have a $10,000 monthly benefit for a 7 year benefit period, you would have $840,000 of cash benefits with Securian and Nationwide.
In comparison, you will be limited to $18,000 of cash indemnity with Lincoln Moneyguard III. Just a massive difference in flexibility with these policies for you.
The Lincoln Moneyguard III policy has been re-priced much higher due to the current bond yield environment. Certainly, competitor policies through Nationwide and Securian are benefiting from not being repriced as high as Lincoln Moneyguard III has been repriced. The pricing with Nationwide and Securian might not last forever. Certainly by 2021 the Nationwide and Securian price advantage might disappear (Action Item: Run to Nationwide and Securina now as fast as you can if the Lincoln price adjustments are a leading indicator). Regardless of price however, the flexibility of the cash indemnity policy will remain.
The above analysis is for limited benefit period LTC policies. (6 year benefit periods, for example)
One policy that we haven't even discussed for you in this review is the OneAmerica Asset Care policy with Lifetime long term care benefit periods. See my Best LTC Policies List.
OneAmerica Asset Care provides couples with joint benefits, and will provide you with Unlimited LTC benefits.
So, comparing this joint life OneAmerica policy with Lifetime benefits to individual limited benefit period policies like Lincoln Moneyguard III, Nationwide or Securian, is like comparing is apples and oranges.
This being said, if you are a couple and you are comfortable with reimbursement policies, for comparable premium to Lincoln Moneyguard III you will also be able to obtain lifetime LTC coverage through this joint life OneAmerica Asset Care policy.
So, you have many good choices today.
Lincoln Moneyguard III is a decent hybrid long term care policy, however in viewing the Lincoln Moneyguard III policy against the present LTC policy landscape you definitely will now have more flexible 100% cash indemnity policy options (Nationwide, Securian) or Lifetime benefit period reimbursement policy options (OneAmerica) to consider at this price-point today.
Compare Your Best Long Term Care Insurance Policy Options - Hybrid and Traditional LTC
Find your best long term care insurance policy based upon your needs and objectives. I am an independent LTC specialist with 22 years of experience working with all of the leading LTC underwriters. Receive your customized illustrations from the best LTC companies including OneAmerica, Lincoln, Nationwide CareMatters, Securian SecureCare, Mutual of Omaha, Pacific Life, National Guardian Life, Brighthouse, Thrivent and more. It will be my pleasure to provide you with objective unbiased advice as to your best policy options. Call me direct toll free at (800) 891-5824. Or submit your online quote request form.
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