OneAmerica announced an imminent important change effective January 1, 2019 for its joint life Asset Care hybrid long term care insurance policy.
What Is Changing
Beginning January 1, 2019 the option of joint life with enhanced LTC benefits of 4% monthly acceleration of the life insurance benefit will no longer be available on the joint life Asset Care product.
What Is Not Changing
Lifetime LTC insurance benefit periods will still be available.
Enhanced 3% acceleration and 2% acceleration will still be available for joint life Asset Care policies.
There are no changes to the single life Asset Care options.
4% acceleration will still be available for individual life insurance policies.
How does this change impact you
Over the years, we have always designed the Asset Care policy with the enhanced LTC 4% acceleration factor.
This option allows our clients to maximize the monthly long term care payout and minimize the amount of life insurance asset that is purchased. Most of our clients are buying the policies for the long term care benefits, not for the life insurance payout.
Let's take a look at an example.
Married couple age 60, seeking to purchase a $6000 monthly long term care benefit per person, Lifetime benefit period for each joint insured.
Here are the required premiums for the (3) available monthly LTC acceleration factors of 2%, 3% and 4%.
$6000 monthly LTC benefits each;
Lifetime LTC Benefit Periods
As you can see, the 4% enhanced LTC acceleration factor allows you to obtain your desired long term care benefit for the least amount of premium outlay.
Additionally, removing the 4% acceleration factor from the joint life portfolio will impact policyholders in a second way.
The Asset Care Policy is comprised of two components: The base life insurance policy (which may be accelerated for long term care needs) and the optional LTC Benefits Continuation Rider (usually Lifetime Benefit period)
Generally, the option of including long term care inflation protection is included within the LTC Benefits Continuation Rider.
With 4% acceleration factor, an insured couple only has to wait 25 months on claim before the LTC Rider with optional inflation protection becomes effective.
With 3% acceleration, the couple will now have to wait 33 months before the optional inflation protection becomes effective.
I believe this is the primary reason OneAmerica is making this change to retire the 4% acceleration factor for joint life.
The OneAmerica Asset Care joint life policy is the strongest hybrid LTC policy available in the marketplace today for couples.
Asset Care is the only policy that offers Lifetime LTC benefit periods and joint life options.
Asset Care is the only policy that allows IRA rollovers to fund its plan.
Premiums are fixed and guaranteed. Asset Care allows funding as a single pay or over 10 years, 20 years or Life Pay.
While the policy will still be a good solution for joint life with 3% acceleration, undoubtedly the still available 4% enhanced acceleration option is the best design for couples.
Applications will take 10-15 minutes by phone. If you have been considering applying for long term care insurance and want a joint life hybrid policy with Lifetime LTC benefits, please call me at (800) 891-5824 by December 31st, 2018 to beat this deadline!