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Long Term Care Blog

OneAmerica Asset Care - Still The Best Hybrid LTC Policy

by Jack Lenenberg

One America State Life Asset Care Review
OneAmerica Asset Care has been the leading hybrid long term care insurance policy for over 30 years.  Remarkable. The longevity and the stability of the OneAmerica Asset Care policy is truly quite impressive, especially considering the multitude of industry changes I have seen in my 24 years of personal long term care insurance production.  Companies have entered and left the arena; underwriters have adjusted its offerings; yet OneAmerica Asset Care is still underwriting guaranteed  Lifetime Unlimited long term care insurance benefits for you exactly as its initial promise to its policyholders in 1989.  This long-term stability of the Asset Care policy is certainly a testament to the financial strength and the solid foundation of the companies of OneAmerica.

About OneAmerica, The Company That Stands Behind Asset Care

OneAmerica is a national provider of insurance and financial solutions for more than 140 years.  OneAmerica has over $86 Billion in assets under administration.  Headquartered in Indianapolis, the companies of OneAmerica include The State Life Insurance Company, American United Life, and Pioneer Mutual Life.  The Asset Care policy is underwritten by The State Life Insurance Company.

Importantly, OneAmerica is a mutual organization that has no shareholders.  This mutual ownership structure of OneAmerica is advantageous for you.  All things being equal, you will benefit to have your long term care insurance policy issued by a mutual organization rather than a stock company.  Mutual companies will always be fully accountable to you as its policyholder.  (A stock company may be beholden to its shareholders to create shareholder profit)  

The OneAmerica companies have received favorable ratings assigned by the leading independent ratings organizations.  AM Best currently rates the OneAmerica companies A+ (Superior).  Standard and Poor's currently issues OneAmerica a AA- rating (Very Strong).  The OneAmerica (State Life) Comdex percentile score is 95/100.

My clients regularly ask me about my experiences with all of the LTC insurance underwriters.  I have worked with OneAmerica for two decades.  I have always found OneAmerica servicing and claims to be highly responsive to my clients' needs, reflecting strong principles and integrity.  

Let's take a closer look at the OneAmerica Asset Care policy to discuss and review its long term care benefits for you.

OneAmerica Asset Care - An Overview

OneAmerica Asset Care is a hybrid long term care insurance policy which have become exceedingly popular in recent years.  

Hybrid long term care policies provide you with long term care insurance benefits should you need care; life insurance benefits to your estate should care not be needed, and a return of premium cash value should you change your mind.  The additional benefit of hybrid LTC policies is your premiums are guaranteed never to increase, unlike stand-alone traditional long term care policies.

Asset Care will reimburse you tax-free for qualified expenses for all levels of care including home care, assisted living, adult day care, hospice, and nursing home care.  Additionally, expenses for supportive equipment, caregiver training, and care coordination are also covered.

OneAmerica Asset Care is a very unique hybrid long term care insurance policy for (3) benefits.

  1. Asset Care is the only hybrid policy that can provide you with a Lifetime Unlimited long term care benefit period.
  2. Asset Care is the only hybrid long term care policy that can be issued to you on a joint life basis.
  3. Asset Care will accept qualified retirement funds such as IRA and 401k rollovers.

Unlimited Lifetime Long Term Care Insurance Benefit PeriodsLifetime Unlimited Benefits - A Long Term Care Plan That "Will Work" vs "Might Work"

No one plans on needing care.  But if you do, how long might you need it?  Will you need care for 1 year or for 10 years?

You might be aware that most long term care insurance policies will limit you to only buying 4 years to 6 years of long term care benefits.  

This strategic decision by underwriters to only sell you a limited amount of coverage is to limit the insurance companies' risk exposure to the possibility that you might incur a long claim, e.g. due to Parkinson's, Alzheimer's or dementia. 

You may read the oft-repeated statistic that the "average" long term care claim is 3.5 years.  Insurance companies like to market this statistic to you because they will no longer sell you a policy with Unlimited benefits.  

Well, you might not be "average." Certainly, life does not work in averages.  My cousin had a stroke and he needed care for 8.5 years.

OneAmerica will offer you a Lifetime benefits as an option.

The Asset Care policy is a true LONG  term care policy.  You can not outlive your benefits with Asset Care.

Asset Care will provide you with Lifetime coverage though your election of the Lifetime Continuation of Benefits rider. 

Will Work vs. might work

Joint Life For Couples is an Asset Care Option

OneAmerica Asset Care may be issued as a single life or as a joint life policy.  

Asset Care is the only hybrid policy that will cover two lives under one single policy.  With this OneAmerica joint life option, your partner and you will each have your own respective individual monthly long term care benefits. The Asset Care joint life option will be less expensive for you than purchasing 2 separate policies.

Flexibility of Qualified Retirement Account Funding

OneAmerica Asset Care can be funded with numerous sources.  Unlike most policies which will only accept non-qualified funding, OneAmerica will accept not only cash savings but also you may rollover funds from your qualified retirement accounts such as IRA, 401(k), 403(b), et al.  I will help you to find a customized solution to best meet your objectives.

How Does OneAmerica Asset Care Work?

OneAmerica Asset Care consists of a base Whole Life policy with a long term care insurance Continuation of Benefits (COB) Rider.

If you need to receive care, you will first receive LTC benefits paid out through your life insurance policy benefit.

This is accomplished through the LTC Acceleration of Benefits (AOB) Rider.

Once your life insurance benefit has been fully paid out, if you still need care you will continue to receive long term care insurance benefits through your LTC Continuation of Benefits (COB) rider. 

We always include the Lifetime Continuation of Benefits Rider for our clients on all Asset Care policies.

To help you to understand how Asset Care works let's take a look at a few examples of the Asset Care policy so you gain an understanding of the benefits you might derive and your associated premium costs.

Let's say you are a 50 year old married couple. 

We will use long term care benefits of $6000 month as our example.  

A $6000 monthly long term care benefit is a reasonable amount of coverage to consider.

To have a $6000 monthly benefit, OneAmerica will provide couples with a joint life insurance benefit of $200,000.

If either of you need care, you may each draw down $6000 month on your $200,000 joint life policy until your life insurance benefit of  $200,000 is reduced to zero.

If you still need care once your life insurance benefit has been paid out, you will each continue to receive $6000 month for your entire lifetimes through the LTC COB rider.

If you do not need to receive care, your joint life insurance benefit of $200,000 will pass to your heirs.

What will this plan cost?

If you are a 50 year old couple your single pay joint premium will only be $115,676 total to cover both of you.

So, you could write a check for $115,676.  You will own a paid up joint life insurance benefit of $200,000.

If either of you need to receive long term care, you will each be able to receive $6000 month for your entire lives.

If care is not needed by you, $200,000 will be passed to your heirs.

Not a bad deal.

Now, if you don't want to fund your policy with a single pay, you will have other options as well.

You could also elect to spread premiums out over a period of time, possibly over 5 years, 10 years, 20 years, or to age 95.

The 10 Pay option is very popular.  If you would prefer the flexibility to spread payments over 10 years your premium will be $14,356 to cover both of you.

Here are the Single Pay and the 10 Pay illustrations for you to review for benefits of $6000 month Unlimited.

Single Pay $6000 month Unlimited 50 Year Old Couple

10 Pay $6000 month Unlimited 50 Year Old Couple

2nd Example: $10,000 month each

What if you might want more than a $6000 monthly benefit?  

What if you might want a long term care benefit of $10,000 month?  Well, the premiums and the benefits have a pro rata linear relationship.

A $10,000 monthly benefit is 67% greater than a $6000 monthly benefit. So, all of the benefits and premium costs in the above example for $6000 month each will increase by 67%.

If you want a $10,0000 monthly benefit, OneAmerica will provide you with a $333,333 life insurance benefit.

Your single pay premium for you each to receive a Lifetime LTC benefit of $10,000 month will be $192,793. 

If you do not need care, your heirs will receive your joint life insurance benefit of $333,333.

Here is the single pay illustration for benefits of $10,000 month for a 50 year old couple.

Single Pay $10000 month Unlimited 50 year old couple

Asset Care is available to be issued to ages 35-80.

The younger you are, the less expensive your premium will be.

Now, what if you are older than 50 years of age?  How will your premiums change if you are a 65 year old couple, for example?

Let's take a look using benefits of $6000 month each once again.

65 year old married couple, $6000 month LTC each, Lifetime benefits

Your single premium will be $185,626 to obtain the $200,000 joint life policy with a Lifetime LTC benefit per person of $6000 month.

Here is your illustration if you are a 65 year old couple.

Single Pay $6000 month Unlimited 65 year old couple

This is a very good deal.  You can write a check for $185,626.  Guarantee your heirs $200,000 if you do not need care.  If either of you do need care, you will receive $6000 month tax free forever.  Unlimited.  Lifetime.

OneAmerica Asset Care Tax Deductions

Many hybrid long term care policies will not afford you the ability to receive a tax deduction of your premiums. 

OneAmerica, however, separately identifies the premiums for the life insurance policy and the long term care insurance riders.

The OneAmerica Asset Care premiums for the LTC benefits are tax deductible subject to IRS guidelines and limitations.

You may use withdrawals from your HSA to fund the Asset Care LTC premiums.

OneAmerica Asset Care Inflation Protection Choices

Like most long term care insurance policies, the OneAmerica Asset Care policy will provide you with the option to include automatic inflation protection within your policy's monthly long term care benefit to help you to keep up with increasing health care costs.

Generally, with most hybrid long term care policies if you include inflation protection it will be included on the Acceleration of Life Insurance Benefit (AOB) and on the LTC Continuation of Benefit (COB) rider.

The OneAmerica policy will provide you with many choices, however. 

If you opt for inflation protection with the OneAmerica Asset Care policy you will have the choice to include inflation protection on both the AOB and the COB riders, or (for less premium) to include inflation protection on the COB Rider only.

You will also have the choice to increase your monthly LTC benefits for Life or (for less premium) for a period of 20 years..

3% compound and 5% compound are options. (Most people elect 3% compound) 

So, with your Asset Care policy design your inflation protection options are:

  1. Level LTC benefits (no inflation)
  2. COB only 20 year cap
  3. COB only Uncapped
  4. AOB and COB 20 year cap
  5. AOB and COB Uncapped

Many choices.

With most of the insurance companies I work with, the inflation protection decisions are easy.

With the Asset Care policy your inflation protection decisions will not be as clear cut as your choices might be on other LTC policies.  

That said, I will be pleased to help you to best understand the pros and cons of the above inflation protection choices through the review of customized illustrations prepared for you.  

OneAmerica Asset Care Will Accept IRAs, 401Ks, and Other Qualified Retirement Funding

One terrific advantage of the Asset Care policy is OneAmerica has flexible funding solutions.

OneAmerica will accept Asset Care policy funding through your rollover of qualified retirement money such as IRAs 401(k), and 403(b) accounts.  This may be helpful for you if you have a significant portion of your assets held within tax deferred retirement accounts.

Let's examine the option of using IRA money to buy your Asset care policy.

If you want to use an IRA or 401(k) to fund your Asset Care policy, One America will accept your rollover into a tax deferred retirement annuity and OneAmerica will credit your income base with a 20% credit

So, if you rollover $150,000, OneAmerica will provide you a bonus of 20% > $30,000 to increase your balance to $180,000.

OneAmerica will subsequently disburse over 10 years the balance of your IRA rollover to fund your Asset Care plan. 

So, if you have a balance of $180,000, OneAmerica will distribute $18,000 year (taxable) for 10 years to pay your premiums.

It will be an easy and seamless process for you.

Here is an example of how you can use IRA money to fund your Asset Care policy.

Let's revisit the 65 year old married couple above.  Assume our couple would still like to be protected with long term care benefits of $6000 month each unlimited, but would prefer to use an IRA rollover instead of cash savings.

65 year old Couple, IRA Rollover, $6000 month Unlimited LTC Each

Joint life insurance benefit of $200,000.  Your IRA rollover amount will be $197,550.

OneAmerica will credit your IRA account 20% and your IRA balance will be $237,060.

To fund your Asset Care policy, OneAmerica will distribute premium payments of $23,706 annually for 10 years.

You will receive a 1099 distribution annually for 10 years in the amount of $23,706.

If you do not need care, your heirs receive tax free life insurance benefits of $200,000.

If you do need care, you receive $6000 month tax free for life.

This is a great option for you to leverage your retirement assets into tax-free Lifetime long term care benefits.

Remember, you are required to take minimum distributions beginning at age 72 anyway.

So, you can now receive a 20% bonus upfront and use your retirement money to fund tax-free Lifetime long term care benefits should you need care. This will be a great option to leverage your IRA to protect your retirement assets.

OneAmerica is the only underwriter accepting IRA rollovers.

Here is the illustration for you to review.

IRA Rollover $197K $6000 monthly LTC each unlimited

OneAmerica Asset Care Waiver of Premium Benefit

The OneAmerica Asset Care policy includes a Waiver of Premium benefit.

If while funding your plan with installment payments and you file a claim, OneAmerica will waive your LTC insurance premiums while you are on claim and collecting long term care benefits.

OneAmerica Asset Care Underwriting

Health underwriting decisions will vary by company.  Your application may be approved with one company, while being declined with another company.

In working with all of the long term care insurance underwriters extensively over the past two decades, it is my experience that the OneAmerica underwriting can be extremely favorable for you should you have any health concerns.

One advantage for you should you have any adverse health history is OneAmerica does in-house underwriting .  The OneAmerica underwriting guidelines will differ from the guidelines many other LTC insurance underwriters use in the arena.

You might be surprised to learn that most companies offering long term care insurance do not underwrite in-house. Many companies use a large 3rd party administrator to underwrite the applications and handle the filed claims.

For example, New York Life, Pacific Life, Nationwide, Securian, Lincoln, Mutual of Omaha, and Thrivent do not underwrite in-house.  These (7) companies all use the same 3rd Party administrator to underwrite your applications and to process your claims.  The downside for you with this third party approach is that unfortunately one TPA's underwriting guidelines essentially standardizes your potential health underwriting outcomes.  I have found the underwriting guidelines to be more stringent with this TPA.  If you are ineligible with one of these (7) companies, you might be ineligible with all because these companies are each using the same third party underwriter to review your health history.  

The OneAmerica guidelines will be different, of course.  Thus if you have any adverse health history, and have been told you can not get coverage, please do not despair.  You might receive positive underwriting variance with OneAmerica that you will not receive with other companies.  I have every company's underwriters on my speed dial, and I will pre-qualify your health history upfront with all of my underwriters to avoid any surprises for you.

The underwriting process with most hybrid long term care policies is generally very easy.

With OneAmerica, if you are healthy you may qualify for expedited streamlined underwriting.

With expedited underwriting, your only underwriting requirement will be a telephone health interview lasting approximately 45 minutes.

You can expect to receive your underwriting approval within 3-5 days.

If, after a review of your health interview, OneAmerica feels that it needs additional information to approve your application medical records, paramed exam, or lab results might be requested.  Generally speaking, the underwriting process with OneAmerica is very quick.

The OneAmerica Asset Care Application Process

To apply for coverage, we only need to complete a brief electronic application to submit to underwriting.  To complete your application I only need to collect basic contact information, beneficiary information, in-force insurance policy information and a few basic financial suitability questions.  I can usually complete your electronic application in 10 minutes over the phone.  

Should You Buy The OneAmerica Asset Care Policy?

If you seek a hybrid long term care insurance policy, the OneAmerica Asset Care policy will absolutely be on your very short list of policies to consider.  Certainly, if you are seek to obtain Lifetime long term care coverage Asset Care will undoubtedly be your best solution.  Asset Care is the only hybrid long term care insurance policy that will offer you Lifetime benefits.

If you are a couple applying together, the Asset Care joint life option is priced exceptionally well for couples.  For single applicants, the Asset Care is also priced competitively for males.

To help you to see the value proposition of buying a joint life policy through OneAmerica vs. two individual policies through other underwriters here are current single pay premiums to obtain a $6000 monthly long term care benefit using our hypothetical couples above, ages 50 and ages 65.

The premiums below are using the maximum long term care benefit period available with each company.

50 year old couple, $6000 month LTC benefit, Single Pay

OneAmerica: Lifetime each $115,676 total premium

Pacific Life: 8 years each $183,850 total premium (male $88,727, female $95,123)

Nationwide: 7 years each $166,101 total premium (male $83,255, female $82,846)

Lincoln: 7 years each $176,929 total premium (male $87,733, female $89,196)

Mass Mutual: 4 years each $145,274 total premium (male $68,425, female $76,849)

65 year old couple, $6000 month LTC benefit, single pay

OneAmerica: Lifetime each $185,626 total premium

Pacific Life: 8 years each $273,279 total premium (male $131,755, female $141,524)

Nationwide: 7 years each $266,371 total premium (male $130,977, female $135,394)

Lincoln: 7 years each $281,812 total premium (male $136,985, female $144,827)

Mass Mutual: 4 years each $236,250 total premium (male $109,202, female $127,048)

As you can see from these joint cumulative premiums above, the joint life policy through OneAmerica will offer you premium savings when compared to buying two individual life policies through the other companies.

Additionally, you will each obtain lifetime coverage with OneAmerica vs only receiving limited benefits of 4 years, 7 years, or 8 years through MassMutual, Nationwide, Lincoln and Pacific Life.

If you care about your death benefits, the individual policies will provide you with two life insurance benefits of $144,000 ($288,000 total) vs one joint life benefit of $200,000 with OneAmerica.  Yet, you will have to contribute much more premium to obtain this 2nd death benefit.  If you are like most of my clients, you might not care about the death benefits as much as you want to maximize your long term care benefits.

If this is the case, you should look strongly at the OneAmerica Asset Care policy with lifetime Unlimited coverage.

Free Hybrid Long Term Care Insurance Quotes

When you contact me for LTC insurance advice you will fortunately be working with the top independent hybrid LTC producer in the United States. I will consult with you about your specific situation to determine the right long term care policy for your needs. I work with all of the leading underwriters including OneAmerica, Nationwide, Securian, Pacific Life, Lincoln, Mutual of Omaha, Brighthouse, Mass Mutual, Global Atlantic and more.

To receive your best advice and direction, please call me direct toll free at (800) 891-5824 or complete my quotes request form.  Or, if easier you may schedule a call with me through my online calendar.

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