Updated July 30, 2020

The Pacific Life PremierCare Choice Max policy is one of two hybrid long term care insurance policy offerings by Pacific Life in 2020, the other being the Pacific Life PremierCare Choice 100 policy.

The primary difference with these two Pacific Life LTC policy offerings is the Return of Premium benefit should you change your mind and want to cancel your policy.

The Pacific Life Premier Care Choice 100 policy will return to you 100% of your premium deposit if you cancel your policy.

The Pacific Life Premier Care Choice Max policy will have a 30% cash surrender penalty applied for a cancellation that occurs during the initial 15 years of policy ownership.  

You will receive greater long term care benefits for the same premium with the PremierCare Choice Max policy.  Thus, if you know that you do not intend to cancel your policy, the Premier Care Choice Max policy will be the better hybrid long term care policy of your two Pacific Life PremierCare Choice options.

With this review, we will focus on the long term care benefits available through the PremierCare Choice Max policy.   If you are like most of our clients, you probably will intend to keep your policy and will seek to maximize your long term care benefits.

If you reside in California, the PremierCare Max and the PremierCare 100 Policies are unavailable.  In California, you have the Pacific Life PremierCare Advantage policy.

Pacific Life Premier Care Choice Max & Choice 100 Are Hybrid Long Term Care Policies With Choices

Hybrid long term care insurance policies are the new breed of long term care planning.  

In the past, most people bought "stand-alone" traditional long term care insurance policies, which operate similarly to your auto insurance or your homeowner's insurance.  Stand-alone policies are strictly "use it or lose it" insurance coverage.  If you need care, traditional long term care insurance will pay tax-free benefits to you, and will waive your premiums.  The downside to stand-alone traditional policies are twofold, however.

Traditional LTC Policy Downsides

1. you have no cash value or benefit to you if you do not need care; and 
2. your traditional long term care insurance premiums are not guaranteed.  You may receive premium increases as the years go by, which can be difficult if you are living on fixed retirement income.

Hybrid long term care policies were developed to address these 2 underlying concerns of traditional LTC policies that were expressed by consumers.

1. Avoid "Use It Or Lose It" Model
2. Guaranteed Premiums

Your hybrid policy premium has 3 potential uses:

Your hybrid LTC policy provides benefits whether you Live, Die or Quit

1. Should you need long term care
2. Should you pass away
3. If you want your money back

Live:  If you need long term care your policy will provide you with monthly tax-free benefits for the cost of your care received at home, in assisted living; or in nursing facilities.

Die: If you pass away, your policy's death proceeds are paid to your beneficiaries tax free.

Quit:  If your policy no longer meets your needs and you want your money back, you may surrender your policy for your Return of Premium benefit.

Not only do you avoid the "Use It Or Lose It" nature of traditional LTC insurance, but also your hybrid policy premiums are always guaranteed.  You may elect to pay your premium as a Single Payment, or in installment plans over 5 years or 10 years for example.  Regardless, you will have the comfort in knowing that your premiums can not be changed by the insurance company.

With this backdrop in mind, Pacific Life introduced the PremierCare policy series to the marketplace in 2013.

Let's take a closer look at the 2020 Pacific Life PremierCare Choice Max plan.

What LTC Benefits Are Covered with Pacific Life PremierCare Choice Max and Pacific Life PremierCare Choice 100?

Pacific Life PremierCare is a whole life policy that provides long term care benefits to you through your elected choice of either reimbursement payments (100%) or through cash indemnity payments (Benefit Reduction).

Your policy will cover more than just nursing facility care.  Comprehensive long term care benefits that are covered are:

• Home and Community Care
• Assisted Living Facility Care
• Nursing Home Facility care
• Adult Day Care Centers
• Alternative Care
• Home Modifications
• Durable Medical Equipment 
• Caregiver Training
• Care Coordination
• Hospice Care
• International Benefits

To receive benefits under your Pacific Life PremierCare policy you will have to be certified as being Chronically Ill.  Chronic illness is the inability to perform 2 of 6 activities of daily living (bathing, eating, dressing, toileting, and transferring) or being severely cognitively impaired (Alzheimer's, dementia) and requiring substantial supervision.  Your doctor will have to certify that you are Chronically Ill and that your need for care is expected to last 90 days.  You will also need to submit a written plan of care.  To continue your eligibility for benefits Pacific Life will require a re-certification one every 12 months thereafter.  These are standard claim procedures with all long term care insurance policies.

Once you are claim eligible, your benefits will be paid to you according to the amount of long term care insurance benefits you purchase and whether you elect reimbursement benefits or indemnity benefits. (More on your choices later)

PremierCare Choice will provide you with the ability to customize your long term care plan benefits similar to most every long term care policy.  

You will have 3 core long term care insurance benefit choices you will need to make when you design your Pacific Life PremierCare policy.

1) Monthly Long Term Care Benefit: Choose an initial monthly long term care benefit between $2500 month and $25,000 month.  To help you decide upon your initial long term care benefit it will be helpful for you to understand the current cost of long term care in the area you plan to retire to.

2) Benefit Period: Choose a long term care benefit period of 5 years, 6 years, 7 years or 8 years.  This will be the minimum period of time your long term care benefits will last should you have a long term care claim.  85% of long term care claims will be 6 years or less.

3) Inflation Protection: Choose to grow your benefits automatically to keep up with the increasing cost of health care.  Select an inflation factor of 3% simple, 5% simple, or 5% compound.  Your Pacific Life illustration will help you to select the proper inflation protection factor to maximize your future long term care benefits when your claim is likely to happen: between ages 75-90.

Your policy premium cost will be dependent upon your choices for these long term care insurance benefits.

Alternatively, you may also initially design your plan from a premium outlay perspective, rather than from a long term care insurance benefit perspective. You may reverse engineer your policy benefits by inputting a specific premium you are comfortable with re-positioning - such as $75,000 or $100,000 for example - and deriving your long term care benefits from this perspective.  

Pacific Life PremierCare has a multitude of payment options.

You may elect to pay your premium as a Single Pay, or as an installment multi-pay plan over a number of years: 5 Pay, 7 Pay, 10 Pay or 20 Pay.

Quick tip: Pacific Life PremierCare Choice is priced best as a Single Pay policy.  

The Pacific Life PremierCare Choice Max Multi-Pay option is not competitively priced as a 5 Pay, 7 Pay, 10 Pay or 20 Pay.  Just AVOID the Pacific Life Multi-Pay options!  Stick with the Single Pay option or find a different policy. Thank me later.

How Does the PremierCare Choice Max Policy Work?

The PremierCare Choice policy is constructed like all hybrid long term care policies.  You will have a death benefit that you can access for long term care needs through the Accelerated Benefit Rider (ABR).  Your specified amount of life insurance benefit will be accelerated on a monthly basis to you over your initial 24 months of long term care claims.  Once you have received care for 24 months, your death benefit will now be exhausted;  However, although your death benefit is now reduced to zero, your Extended Benefit Rider (EBR) will continue to provide long term care benefits to you until your Total Long Term Care Benefits pool is exhausted entirely.

So, your PremierCare Whole Life LTC policy is constructed as the following:

5 Year LTC Benefit Period (2 Year ABR + 3 Year EBR)

6 Year LTC Benefit Period (2 Year ABR + 4 Year EBR)

7 Year LTC Benefit Period (2 Year ABR + 5 Year EBR)

8 Year LTC Benefit Period (2 Year ABR + 6 Year EBR) 

It is important to understand this ABR/EBR contractual terminology so you can also understand a PremierCare policy limitation.  For example, the International Coverage benefit.

International Coverage:  Benefits will be available internationally through the ABR only.  International benefits will be for Nursing Facility Care Only.  You also must elect the Indemnity option, which will carry an LTC Monthly Benefit reduction factor.  So, LTC benefits are limited internationally to 2 years, nursing home only, and with a benefit reduction due to the indemnity requirement.

The Choices You Have With Pacific Life PremierCare Choice Max

When Pacific Life introduced this policy in 2017, it marketed this policy as a hybrid plan that will "give you choices, not restrictions" at claim time."

At claim time you will have a choice on how you want to receive your long term care insurance benefits.  You may elect to receive your benefits with either the reimbursement option or the indemnity option.

Reimbursement Option:  You are reimbursed for your out-of-pocket expenses up to your monthly maximum benefit.  Submission of receipts for qualified care expenses is required.  If you elect the reimbursement option you will retain 100% of your purchased benefits.

Indemnity Option:  Receipts for care are not required.  If you elect the indemnity option, your LTC Monthly Benefit and your Total Long Term Care Benefits pool will be reduced to your contract's indemnity factor, typically 76%-80%.  This choice that you will make at claim time is irrevocable.  So your monthly maximum will be paid each month regardless of expenses your incur, however you will forfeit 20%-24% of your initially purchased long term care coverage.

My quick thoughts here:  For home care, I prefer indemnity benefits to reimbursement benefits.  I like the flexibility of not having to provide receipts for qualified care expenses.  Indemnity benefits allow all of your informal home care to be covered, including care by your immediate family members. I realize cash indemnity benefits have a cost, so I do understand that Pacific Life will want to charge more for the cash indemnity option.  

The failure of this Pacific Life PremierCare policy choice is the irrevocable nature of your decision to elect indemnity benefits.  Most claims will begin at home.  You could initially believe that family caregiving and informal community care is important to you and elect the indemnity option. In doing so, however, you are forever forfeiting 20-24% of your benefits.  If your long term care needs progress and you subsequently enter into assisted living or a nursing facility, you do not receive your long term care insurance benefits back that you forfeited.  I can see many shortsighted decisions occurring at claim time with this PremierCare Choice contract.  I would be more comfortable with a contract that allowed you to revert back to a 100% reimbursement benefit if facility care became necessary for you.  But this Pacific Life contract does not afford you this flexibility.  

Additionally, you should be aware that since this PremierCare policy was introduced 3 years ago there are 2 great hybrid long term care policies available now ( Nationwide CareMatters II and Securian SecureCare) that will always provide you with 100% cash indemnity benefits.  And these two alternative hybrid policies can also be less expensive than this Pacific Life PremierCare policy, so I do not believe this reimbursement/indemnity choice is a major selling feature for this PremierCare policy today.  If you do want an indemnity long term care plan, you can certainly buy a 100% cash indemnity policy for the same or less premium than this Pacific Life indemnity option that takes away 20%-24% of your coverage.  More on these two alternative indemnity policy options later.

What is the underwriting process for Pacific Life PremierCare Choice Max?

The Pacific Life PremierCare underwriting process is very similar to many of its primary competitor policies such as the OneAmerica Asset Care, Lincoln Moneyguard III, Securian SecureCare and Nationwide Care Matters II policies.

Like most leading hybrid policy underwriters, Pacific Life will initially order a telephone health interview for you to complete, as well as an electronic prescription drug report to review. Your telephone health interview will last approximately 45 minutes and will consist of a cognitive screening exercise to test your short term memory recall.

Once your telephone interview is reviewed, the underwriter at Pacific Life will reserve the right to order medical records to review if needed from your primary care physician and any specialists you may have seen.

Pacific Life uses a 3rd party underwriter LTCG to determine eligibilty.  LTCG also underwrites for Lincoln, Securian and Nationwide.

OneAmerica does not use a 3rd party underwriter.  OneAmerica underwrites its own applications.

My experience is the OneAmerica underwriting at times is much more flexible than underwriting through LTCG (Pacific Lincoln, Securian, and Nationwide)

Should You Buy The Pacific Life PremierCare Choice Max Policy?

The Pacific Life PremierCare Choice policy is one of many hybrid long term care insurance policies you could consider along with OneAmerica Asset Care, Securian SecureCare, Lincoln Moneyguard III and Nationwide CareMatters II.  

With the declining 30 year Treasury Yields we have seen repricing with these policies in 2020.

To help you compare these policies from a cost analysis, let's compare the Pacific Life policy to alternative hybrid LTC policies that are sold with limited benefit period options such as 5 years - 8 years and on an individual policyowner basis.

Per my comments above, Pacific Life is priced best as a Single Pay.  If you are needing to spread premiums out over 5 years or 10 years, just know that this Pacific Life policy will not be your best value.  So, let's initially take a look at the Pacific Life Max policy in its strongest position, as a Single Payment design.

Premiums with the underwriters are based upon age and marital/partner status.

If you are part of a Couples relationship, you will receive a discount on your premium.  The discount is applied if you are married/partnered/civil union.  You and your partner are not required to buy two policies.  Your discount is applied simply for the existence of your relationship.

Let's take a look at benefits for 4 fact patterns: 60 year old male, single; 60 year old male with Couples discount; 60 year old female, single; and 60 year old female, with Couples discount.  

Let's compare single premium pricing of Pacific Life with a few of the leading policies today - Lincoln Moneyguard III, Securian SecureCare, and Nationwide CareMatters II.  (I will not include the OneAmerica Asset Care policy in this review because the OneAmeica Asset Care policy is often priced best as a joint life policy, and with Unlimited LTC benefit periods rather than benefit periods of only 5-8 years) 

Some quick notes: Lincoln Moneyguard III is a 100% reimbursement policy.  Securian SecureCare and Nationwide CareMatters II are each 100% cash indemnity policies.  Pacific Life is a 100% reimbursement policy or an 80% cash indemnity policy (benefits irrevocably reduced to 80% if cash indemnity is elected).  All things being equal, 100% cash indemnity policies are better for you than 100% reimbursement policies.

Let's assume a single premium payment of $100,000, and a long term care benefit period of 6 years.

The benefits below for Pacific Life will only reflect the 100% reimbursement benefit.  If you want to know what the Pacific Life indemnity policy benefit would be, reduce the below benefits by an additional 20%.

60 year old married male, $100,000 premium, 6 year benefit period

The Pacific Life PremierCare Choice Max policy is a good hybrid long term care policy, so long as you play to its strengths: reimbursement policy, single pay premium; long term care coverage in the United States only.

Pacific Life initially introduced PremierCare in 2013 as a 100% reimbursement policy only.  2 years ago Pacific Life introduced the PremierCare Choice Max and Choice 100 policy series which provides you with a choice of receiving either reimbursement benefits or cash indemnity benefits at claim time.  If you elect the reimbursement model, you have to submit receipts for the costs of your qualified long term care expenses.  The reimbursement model will provide you with 100% of your purchased benefits.  If however you want to eliminate the need to submit receipts for your care, you can choose to elect the indemnity model at claim time, and receive cash payments.  In electing indemnity benefits you will forfeit at least 20% of your coverage irrevocably.  Even if you ultimately find yourself in a position to be acquiring receipts for care, you do not have an opportunity to go back to the 100% reimbursement model if you elected indemnity.

In a vacuum, this choice of 100% reimbursement or benefit reduction with indemnity approach seems like a good option to offer you.  Why should you not have a choice.  Certainly you can always elect the reimbursement option and stay at 100%.  Some policies, like Lincoln Moneyguard III, are only reimbursement policies without any choice.  So, in a vacuum, this indemnity/reimbursement choice seems like a positive for you.  At least if you live in a world of only reimbursement-only policies.

The challenge for this Pacific Life policy is you do not live in a reimbursement-only policy world.

In the past three years Securian introduced its stellar-priced SecureCare hybrid policy with 100% cash indemnity LTC benefits, and a vested 100% return of premium option.  

In 2019, Nationwide aggressively priced its 100% cash indemnity CareMatters II policy.  

So, for cash indemnity LTC insurance options today you will run to Securian and Nationwide.  The Pacific Life Premier Care Choice policy has been rendered a non-starter if you are attracted to cash indemnity policies.

If you are comfortable with submitting receipts for your care, and do not foresee wanting your long term care to be provided by a family member then this Pacific Life policy will be a decent policy option for you.

Although the PremierCare Choice policy touts the ability for you to elect many funding options, the PremierCare pricing will be best suited for you as a Single Pay.  If you stay with the Single Pay option, your benefits will be maximized with Pacific Life.  If you would prefer a Multi-Pay option, look elsewhere, possibly once again to either Nationwide or Securian.

If you have any adverse medical history or treatment, it can be a more challenging underwriting process for you when medical records are being required.   Underwriting is a significant part of the application process and you need to work with a very experienced long term care insurance agent that knows underwriting guidelines backwards and forwards.  There is an old adage:  shop the agent, not the policy.  The agent you select is the key to your entire process:  determining your best policy, getting your application approved, designing your policy benefits appropriately.

I pre-qualify the health of all applications with my underwriters at OneAmerica, Securian, Nationwide, Pacific Life and Lincoln to ensure your approval success.

Compare The Costs Of Your Best Hybrid Policy Options Today

With 23 years of experience in the long term care insurance arena, I will answer all of your questions.  I will help you to find your best policy options and get your application approved.  I work with all of the top-rated LTC insurance underwriters including OneAmerica, Securian SecureCare, Lincoln, Nationwide CareMatters II, Pacific Life, Global Atlantic, Brighthouse SmartCare, Mutual of Omaha, and National Guardian Life.  Call me today direct toll free at (800) 891-5824 for customized illustrations and advice.  Or complete your quote request form.  I am your one-stop shop.  

Jack Lenenberg