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Long Term Care Blog

New York Life Asset Flex Hybrid Life and LTC Policy Review

by Jack Lenenberg

New York Life Long Term Care Insurance

July 1, 2024. About 4 years ago New York Life revised Asset Flex, its version of a hybrid life and long term care insurance policy to look and feel exactly like Lincoln Moneyguard which for 2 decades has been the standard bearer in the hybrid life/long term care industry. 

Unlike traditional long term care insurance policies which are "use-it-or-lose-it" products, hybrid LTC policies allow you to cover all of your bases.

With New York Life Asset Flex, you can reposition assets into a plan that provides you with tax-free long term care benefits should you need care, a tax-free life insurance benefit should care not be needed, along with options to get your money back should you change your mind.

The additional benefit of hybrid plans such as NY Life Asset Flex is that your premiums are fixed and guaranteed to never increase. Thus, you avoid the risk of premium rate increases that have been inherent in the traditional stand-alone LTC insurance policies such as the New York Life Secure Care policy.

For the past 10 years, 90% of my clients have elected to buy hybrid long term care policies. Many A+ rated companies are issuing these policies today, including New York Life, Lincoln, Nationwide, OneAmerica, Securian, Northwestern Mutual, Brighthouse and Mass Mutual.

It is a very competitive arena today.

I have been meaning to review Asset Flex for awhile now.  Not only is it pitched by New York Life agents, but New York Life also has marketing agreements in place with AARP and with Fidelity Investments, so it is marketed heavily.

This week I was approached by a Boston Massachusetts couple to review and compare their NY Life Asset Flex illustrations they just received with alternative policies, so now is a good time to write my blog review :)

So, how does the New York Life offering compare with the other options?

Let's take a closer look at the Asset Flex policy to see whether or not it is worth considering.

Overview of New York Life Asset Flex

Product Type: Universal life insurance that offers the ability to use the life insurance face amount for long term care needs or for terminal illness. Optional extension of benefits rider for long term care that creates an additional pool of money if long term care is needed.

Payout Type: Reimbursement Model. Receipts for paid qualified care expenses must be submitted for reimbursement.

Issue ages: age 30 to age 75

Issued LTC Monthly Benefits: Minimum $1000 month, Maximum $20,833 month

Acceleration of Death Benefit For LTC Expenses: 2 years or 3 years (almost everyone will elect 2 years acceleration to maximize LTC monthly payout amount)

Total LTC Benefit Periods: 2 years, 3 years, 4 years, 5 years, 6 years, 7 years (almost everyone will elect a total LTC benefit period of 6 years for maximum LTC monthly benefits)

Automatic Compounding Inflation option: 3% compound

Future Inflation Purchase Option: 5% compound. Available if automatic 3% compound is not elected at purchase.

Elimination Period: 90 day waiting period for facility care, and/or zero day waiting period for home care. 0 day elimination period for home care requires use of the Plan of Care benefit offered by New York Life.

Limited Cash Indemnity Benefit: Equal to only 1/60th of the monthly benefit amount for a limited period of 365 days if caregiver is a friend or family member, partners and spouses are excluded however.

Residual Death Benefit: 10% of the Specified Amount of Life Insurance

Return of Premium Options: Partial : 80% all years, Vested Receive 100% after 5 years, Full: Receive 100% after all recurring premiums are paid.

International Coverage: 12 months lifetime maximum, nursing home only

Spouse's Paid Up Insurance Purchase Option: If named as a beneficiary on your policy, your spouse may purchase a paid-up whole life policy upon your death with no evidence of insurability. This whole life policy will not accelerate benefits for long term care however.

Payment schedules: Single Pay, 5 Pay, 10 Pay, 15 Pay, Paid-Up at Age 65.

Couples Discount: Included

Underwriting Classifications: Preferred and Standard

Care Plan Benefit: Provides access to NY Life's team of registered nurses, social workers, and care planners to help you to develop a plan of care. Required to use to receive 0 day home care elimination period benefit enhancement.

Key Takeaways of NY Life Asset Flex

In quickly reviewing the features and benefits of the Asset Flex, here are the main key elements and takeaways that you will need to know.

As I mentioned above, the New York Life Asset Flex policy is designed almost identically to Lincoln Moneyguard Fixed Advantage. It is essentially a cookie-cutter replica of Moneyguard.

Reimbursement Policy

Like Lincoln Moneyguard, NY Life Asset Flex is a reimbursement policy. As with Lincoln, New York Life will require to submit receipts for your paid out-of-pocket care expenses to receive monthly long term care benefits.

Long term care insurance policies are either reimbursement policies or cash indemnity policies.

The cash indemnity policy will provide you with greater flexibility for your caregiving received at home. With cash indemnity benefits, you always receive your maximum monthly benefits and can spend it however you wish on your care. Anyone may be your caregiver, including your spouse.

Unfortunately, New York Life will not provide you with this cash indemnity flexibility. For informal home care needs, you will be limited to only 50% of your monthly long term care benefit, and only for a maximum period of 1 year. Additionally, your spouse will be ineligible to be your primary caregiver even if you want to access this limited informal care benefit.  Contrast this with policies available through companies such as Nationwide, Securian and Brighthouse, where your entire long term care insurance policy is available to be used for informal home care, and your spouse is never excluded as your primary caregiver, if desired.

Limited Benefit Period

Only one hybrid long term care insurance policy provides you with Unlimited long term care benefits, the OneAmerica Asset Care policy.

Like all other LTC insurance underwriters, New York Life will only provide you with a limited benefit period. The New York Life Asset Flex policy like Lincoln Moneyguard will almost always be best designed with a 6 year LTC benefit period and with 3% compound inflation protection.

Some inexperienced LTC insurance agents may mistakenly show you a design with a 4 year LTC benefit period and attempt to justify the design with a comment such as "an average LTC claim is 3 years," however you will always be best protected with the longer benefit period. With New York Life, there is only a 10% premium difference between the 4 year and the 6 year options, so 6 years will be the better planning value overall for you.

I generally have no issues with 6 year benefit period options with asset-based policies, so I am comfortable with the 6 year benefit period option that New York Life will provide you.

While on paper NY Life offers a 7 year benefit period, its structure for 7 years hurts you rather than helps you. With the 7 year benefit period, New York Life will decrease your monthly LTC benefit by 33%. So, you will most likely elect 6 years to efficiently maximize your long term care coverage.

Like NY Life, Lincoln Moneyguard is also best designed with the 6 year benefit period.

Yes, New York Life copied Lincoln's model.

Aside from the practices of Lincoln and New York Life, can you efficiently obtain longer benefit period durations?  Sure. You absolutely can.

Nationwide CareMatters II and Securian SecureCare III will provide you with 7 years or 8 years of coverage without reducing your monthly LTC benefits significantly, and OneAmerica will provide Unlimited lifetime LTC benefits. You will certainly pay more to get lifetime Unlimited LTC benefits with OneAmerica, though.

You will not pay that much more premium however, to move to 7 or 8 years with Nationwide or Securian, however.

Extremely Limited International Coverage

New York Life only provides 12 months of nursing home only coverage overseas.  If you are contemplating retiring outside the United States, this policy will not be for you.  You will want a cash indemnity option through Brighthouse, Securian or Nationwide for stronger international coverage.

0 Day Elimination Period For Home Care Requires NY Life Plan of Care

A plan of care will always be required to be submitted to have your claim approved for any long term care insurance policy. With almost all policies, any independent person (your doctor) may submit your plan of care. New York Life, however, requires you to use its provided care coordinator for you to receive its 0 day home care elimination period benefit.  Other companies (Lincoln, OneAmerica, Nationwide) provide you with complimentary care coordination services, and do not tie your 0 Day Home Care Elimination Period benefit to the use of these free services. So, I am not in love with this language. It is not a dealbreaker, but it is just so unnecessary to require you to use its care coordinator to access policy benefits.

Preferred and Standard Health Classifications

New York Life will illustrate its policies at the Preferred health classification. I believe almost all relatively healthy applicants will receive Preferred. The New York Life Asset Flex policy is priced fine at Preferred. If you do not receive a Preferred offer from the underwriter, you will most definitely need to shop around. I would not readily accept the New York Life Asset Flex policy priced at Standard.

Uninsurable Medical Conditions For New York Life Asset Flex

New York Life employs LTCG as a 3rd Party Underwriter and Administrator of its long term care insurance policies. LTCG is a fairly tight underwriter at times. You will be unable to be approved for NY Life Asset Flex if you have a history of heart attack or heart valve surgery, heart blockage under the age of 55, stroke or TIA, diabetes under the age of 50, or diabetes and use insulin, or have had back or spine surgery in the past 12 months.  If any of these conditions apply for you, New York Life will not be a fit. I do have other underwriters that could consider your application though.

So, these are a few general thoughts I have about the policy.

Now, how about the pricing?  Is the cost of New York Life Asset Flex worth considering?

Well, I think the New York Life Asset Flex policy is priced more than fine overall and is a decent value.

Let's take a closer look at a price comparison.

Comparing the Cost of New York Life Asset Flex With Other Hybrid LTC Policies

This past week I was contacted by a married couple in Boston that are just beginning to look into their long term care options. They have been going through caregiving needs with their parents and are steadfast in their desire to not burden their children with these issues when they are older.

Currently, the husband is age 58 and the wife is age 50.

New York Life (through Fidelity Investments) presented them with an Asset Flex plan to provide them each with a monthly long term care benefit of $6000 month, a 6 year benefit period and automatic inflation protection of 3% compound.

To me, this amount of LTC coverage is a reasonable place to start a conversation. Certainly the cost of care in New England can be more than $6000 month today. They were comfortable with this level of coverage taking into account their other liquid assets can co-insure the difference.

The design provided the following benefits, and will provide 10x leverage on their premium at age 80.

Inflation Adjusted LTC Benefits Male Age 58
Age 58 $6,000 mo. LTC $465,725 total $144,000 death benefit
Age 75 $9,917 mo. LTC $769,773 total $144,000 death benefit
Age 80 $11,497 mo. LTC  $892,378 total $144,000 death benefit
Age 85 $13,328 mo. LTC $1,034,511 total $144,000 death benefit
Age 90 $15,450 mo. LTC $1,199,281 total $144,000 death benefit

New York Life provided the couple with an option to fund the plan upfront with a one-time single premium payment or to spread out the premiums over 10 years.

They asked me to determine if NYL Asset Flex was their best option.  So, I compared their numbers for them to assist.  Here is what we found:

Male age 58, $6000 month, 3% compound, single pay

Lincoln: $81,025 reimbursement (6 years)

Securian: $89,070 cash indemnity (6 years)

New York Life: $89,318 reimbursement (6 years)

Nationwide: $90,710 cash indemnity, (6 years)

Nationwide $91,717 cash indemnity (7 years)

Male age 58, $6000 month, 3% compound, 10 pay

Lincoln: $9,994 reimbursement (6 years)

Securian: $10,734 cash indemnity (6 years)

Nationwide: $11,103 cash indemnity (6 years)

Nationwide $11,199 cash indemnity (7 years)

New York Life: $11,256 reimbursement (6 years)

Securian $11,705 cash indemnity (8 years)

So, in looking at the numbers you can see that the pricing for the husband is very close with all of the policies. Lincoln Moneyguard is the least expensive policy by 10%, so it's probably impossible to recommend New York Life Asset Flex over Lincoln Moneyguard, all things considered. Each are reimbursement policies, however Lincoln will also provide you with a 0 day elimination period in all settings - home care and facility care, without any strings attached. So, saving 10% would be optimal if you are comfortable with reimbursement policies and with a 6 year benefit period.

Otherwise, for the same premium outlay as New York Life, you could obtain much more flexibility for your home care needs with 100% cash indemnity benefits through either Nationwide or through Securian, and even consider longer coverage such as 7 year benefit periods or 8 year benefit periods.

So, there is certainly nothing necessarily wrong with electing to buy the New York Life policy. There aren't any god-awful decisions here, but from these numbers it is apparent the absolute best policy purchase for you if you are a 58 year old married male might lie with a different underwriter than NY Life.

Now let's look at the wife's options.

Female age 50, $6000 month, 3% compound, single pay

Lincoln: $89,082 reimbursement (6 years)

New York Life $89,735 reimbursement (6 years)

Nationwide: $91,876 cash indemnity (6 years)

Nationwide: $97,148 cash indemnity (7 years)

Female age 50, $6000 month, 3% compound, 10 pay

Lincoln:$10,988 reimbursement (6 years)

Nationwide $11,014 cash indemnity (6 years)

Nationwide $11,608 cash indemnity (7 years)

New York Life: $12,213 reimbursement (6 years)

Well, with the 50 year old married female, the pricing is just very close throughout. Lincoln does not have the 10% pricing edge here as it does with her husband. Clearly, New York Life is faring better as a single pay than it is as a 10 pay for women. The 10 pay option with NY Life is a lousy choice here, however its single pay female pricing is absolutely fine. 

I would really love to know the rationale with NY Life's 10 Pay pricing here for women. It is charging 36% more premium over the single pay for the 50 year old female to elect a 10 pay. That's insane. The general spread between single pay and 10 pay is closer to 20%.

Should You Buy New York Life Asset Flex?

The New York Life Asset Flex policy is part of the new breed of hybrid long term care policies that were developed over the past 12 years.

While the first iteration of the Asset Flex policy wasn't competitive 8 years ago, the redesign and pricing of the product in 2020 is certainly a huge leap forward. New York Life Asset Flex is a good policy today. You can certainly now consider it as a viable long term care insurance option. 

Is it your very best option, however? Well, that is a personal choice. There are many good options to consider today. For comparable premium you can certainly do yourself and your loved ones a huge favor and buy a 100% cash indemnity long term care policy. While there is nothing necessarily wrong with submitting receipts for reimbursement if need be, it is certainly much easier to eliminate the hassle of the reimbursement process. In addition to the hassle free nature of 100% cash indemnity long term care plans, you also receive the utmost flexibility in knowing that all of your informal home care, including care by your spouse and your family is covered for you.

Additionally, for similar premium you can obtain longer benefit period durations than NY Life will offer you. From a planning standpoint, you may want the comfort in knowing that you have more than 6 years of LTC benefits if needed.

The couple from Boston that asked me to analyze their options are choosing to apply to Nationwide for the indemnity benefits.

They are actually attracted to the CareMatters Together policy, the joint life cash indemnity option available through Nationwide.

There aren't any right or wrong decisions here, just options to consider.

Should you want to receive expert advice and assistance in analyzing your best options, please do not hesitate to give me a call.

You may contact me directly at (800) 891-5824. Or you may complete my quote request form. It will be my pleasure to assist you.

Thank you for reading my blog.

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