Securian SecureCare III Might Now Be Your Best Long Term Care Policy
May 16, 2023. I have been waiting a few months to blog extensively about the current pricing on the Securian SecureCare III policy. It has been almost 4 months since Securian reduced its pricing by 25% on its SecureCare III cash indemnity hybrid policy.
SecureCare III was initially introduced to the marketplace in Spring 2022, (replacing the absolutely terrific original SecureCare policy) however the SecureCare III pricing once introduced in early 2022 was unfortunately not competitive when compared with its primary cash indemnity policy competition, the Nationwide CareMatters II policy; (as well as compared with the popular OneAmerica Asset Care policy offering Lifetime LTC benefits).
Certainly, the SecureCare III policy was still an attractive policy based upon the long term care benefits it provides you.
The SecureCare policy calling card is, and always has been, the cash indemnity benefits it provides you once you are determined to be chronically ill.
Securian SecureCare III is one of only three cash indemnity policies available in the marketplace, the others being Nationwide CareMatters II and Brighthouse SmartCare.
The remaining policies in the marketplace (NY Life Asset Flex, Lincoln Moneyguard, OneAmerica Asset Care, MassMutual CareChoice, Global Atlantic ForeCare) are primarily reimbursement models, (i.e., you are required to provide receipts for your out-of-pocket expenses to ultimately receive your policy benefits).
Not only does the Securian SecureCare III policy offer the flexibility of cash indemnity benefits, but SecureCare III also offers you the option to receive up to 8 years of long term care coverage. Only the OneAmerica Asset Care policy has a stronger benefit period option for you, offering you Lifetime Unlimited LTC benefits.
Most long term care policies will limit your LTC benefit period options to only 4 - 7 years (Mass Mutual, Lincoln, NY Life, Nationwide).
So, in a vacuum, the Securian SecureCare policy seemed attractive when it was rolled out, however its individual policy rates were quickly undercut by 10% last year by both Nationwide and Lincoln.
Thus, for the better part of 12 months Securian struggled to produce any sales in the long term care insurance brokerage arena with its new SecureCare III policy, solely because of its pricing vis-a-vis Nationwide and Lincoln, not to mention the joint life pricing of OneAmerica.
The old adage in the independent insurance brokerage arena, is "if you are not first, you are last." And for 2022, Securian stared up at 100% of the cash indemnity individual LTC sales going to its main competitor, Nationwide.
With this backdrop, in January 2023, Securian made the aggressive decision to reduce its rates by 25% across the board for all applications, regardless of age, gender or policy funding design.
(Funny story, I was actually in an Uber on a Saturday afternoon heading to a hockey game in Pittsburgh with the President of OneAmerica Financial when the news dropped in January of the new Securian SecureCare III pricing .... I believe his reaction was something to the extent of "Oh crap" lol...)
So, while I have been meaning to blog extensively about this new Securian SecureCare III pricing, part of my initial reluctance was I felt as soon as I would blog, either Nationwide or OneAmerica or Lincoln would certainly react to Securian's aggression and would reduce its rates by 25% and I would have to rewrite everything!
Well, so far no one has reacted. All of the other underwriters are allowing Securian to write as much business as it wants to at its current pricing levels.
So, here we are.
Securian SecureCare III - A Quick Review
The Securian SecureCare III policy is one of a growing number of "hybrid" long term care policies that combine long term care benefits with a cash value life insurance benefit or annuity benefit.
Unlike traditional LTC insurance policies that will only provide you with benefits should you require long term care, hybrid LTC policies provide guaranteed benefits should you need care, a guaranteed life insurance payout should care not be needed, and a return of premium benefit should you change your mind. Additionally, unlike traditional LTC insurance premiums which may increase over the years, the premiums with hybrid long term care policies are also 100% guaranteed to never increase.
For these guarantees, most of my clients today are choosing to buy the hybrid long term care policies.
Policy Type: Cash Indemnity
Face Amounts: $50,000 minimum, $500,000 maximum
Premium Payment Options: Single Pay, 5 Pay, 7 Pay, 10 Pay, 15 Pay
Benefit Period Options: 4 years, 5 years, 6 years, 7 years, 8 years
Inflation Protection Options: 3% simple, 3% compound, 5% simple, 5% compound
Elimination Period: 90 calendar days; home modification and caregiver training are immediately available
International Benefits: Total LTC benefit pool is available outside the USA, up to 50% monthly maximum benefit.
Couples Discount: Available as separate underwriting class, only 1 partner need to apply to receive discounted rate
Examples of Qualified LTC Services: Informal care, home care, household chore services, home modifications, caregiver training, adult day care, assisted living, nursing home care, bed reservation, respite care, hospice care
Cash Indemnity vs Reimbursement
One of the most important things to understand about a long term care insurance policies is how it will pay benefits if you initiate a claim and your claim is approved.
Now, please remember, with all policies (cash indemnity and reimbursement) there will be no distinctions in how you qualify for benefits.
To qualify for benefits with all long term care insurance policies, your doctor must certify that you are "Chronically Ill." To meet this definition, your doctor will need to state that you either require assistance with 2 activities of daily living (bathing, eating, dressing, toileting, continence, transferring) or that you have a severe cognitive impairment such as Alzheimer's or dementia.
Once your claim has been approved, the distinction of policy type - cash indemnity or reimbursement - will be important.
Reimbursement policies will reimburse you dollar-for-dollar for actual qualified LTC expenses incurred under your policy. You will be required to submit receipts each month to evidence the amount of your out-of-pocket care expenses. It is possible some of your out-of-pocket costs might not qualify under your contract as qualified LTC expenses.
Cash indemnity policies automatically send your maximum monthly benefit to you, regardless of your actual expenses incurred. And you may use your monthly benefit however you wish without restrictions: you may pay a family member to be your caregiver, you may modify your home to make access and navigation easier, or you may save your benefit for later use.
Undoubtedly, cash indemnity policies are more flexible for you than reimbursement models.
The Securian SecureCare III contract is one of a limited number of 100% cash indemnity policies available today (Securian, Nationwide, Brighthouse).
Now, in a logical world we would expect a cash indemnity structure to cost more premium for you than a reimbursement model, all other benefits being equal. An actuary would certainly be within reason to apply a 10% higher cost to an indemnity benefit, for example.
So you would expect that a cash indemnity policy offered through Securian or Nationwide would cost a slightly higher premium than a reimbursement policy through Lincoln Moneyguard, for example.
Well this might have been the case until Securian flipped the script in January.
Let's take a look at current pricing in the marketplace.
You will see that the numbers are eye opening.
To keep things simple for you, below you will find pricing for single pay hybrid LTC policies providing initial long term care benefits today of $6000 monthly, inflation protection of 3% compounded annual benefit increases, and a 6 year LTC benefit period.
Now, please keep in mind that you can certainly elect to buy less initial coverage than $6000 month or more initial coverage than $6000 month. I simply elected this amount of coverage because it is a reasonable place to start a conversation based upon the cost of long term care today.
Benefits and premiums will have a pro rata relationship. An initial benefit of $3000 month will cost 50% less premium than for a $6000 monthly benefit. An initial benefit of $9000 month will cost 50% more premium than the cost for the $6000 monthly benefit amount.
With most companies you can also elect to pay premiums over 5 years or 10 years, or longer. If you elect a longer pay schedule a your overall premiums paid will be higher.
So, the single pay premium is your least expensive method if you do have the funds available.
If you do not have a lump sum available, do not despair. You may structure a payment schedule for up to 15 years with Securian.
Within the Securian illustrations attached below, you will see the premiums needed to pay your policy premiums over 5 years, 7 years, 10 years or 15 years, if needed. You will see these premiums on page 12 within the illustrations.
$6000 month, 6 year benefit period, 3% compound inflation protection
Married male, age 50 pricing, single pay premium
- Securian: $76,398
- Lincoln: $92,566
- Nationwide: $95,406
Securian male age 50 illustration
Lincoln male age 50 illustration
Nationwide male age 50 illustration
Married female, age 50 pricing, single pay premium
- Securian: $89,297
- Lincoln: $106,291
- Nationwide: $108,200
Securian female age 50 illustration
Lincoln female age 50 illustration
Nationwide female age 50 illustration
Married male, age 60 pricing, single pay premium
- Securian: $92,463
- Lincoln: $110,448
- Nationwide: $113,331
Securian male age 60 illustration
Lincoln male age 60 illustration
Nationwide male age 60 illustration
- Securian: $107,348
- Lincoln: $130,534
- Nationwide: $134,059
Securian female age 60 illustration
Lincoln female age 60 illustration
Nationwide female age 60 illustration
Did I mention the difference in premiums would be an eye-opener?
Lincoln Moneyguard Fixed Advantage and Nationwide CareMatters II require a premium that is 20% - 23% higher than the Securian SecureCare III policy requires.
Conversely, for the same equivalent premiums listed above for Nationwide CareMatters II or Lincoln Moneyguard, the Securian SecureCare III policy will provide you with an initial benefit of $7400 month, compared with an initial LTC benefit of $6000 month through either Lincoln or Nationwide.
So, whether it is more important for you to save premium on your policy purchase, or to create stronger LTC coverage for the amount of premium you have set aside, the Securian SecureCare III policy will be almost impossible for you to overlook if you are seeking an individual long term care policy with a limited LTC benefit period in the 6 year to 8 year range.
Realistically, the only viable alternative to the Securian SecureCare III policy for you presently to consider today would be the OneAmerica Asset Care policy that will provide you with Lifetime Unlimited LTC benefit periods. The OneAmerica Asset Care policy can also be issued on a joint life basis. And the OneAmerica Asset Care policy will accept IRA rollovers to fund the plan, so OneAmerica Asset Care can certainly fill a niche that the Securian policy at times can not.
Getting Approved For The Securian SecureCare III Policy
So, what is the next step?
To me, it is not that difficult to isolate the best policy value for you. This is the easy part.
The next part of the process, and it is the most important part, is receiving your underwriting approval.
Securian has a fairly streamlined process for you to receive your underwriting approval.
Your only requirement is to complete a 30-40 minute telephone health interview.
There are not any exams or labs required to be completed by you.
If you would like to discuss and review your health history to determine if you would be a good candidate for the Securian SecureCare III policy please call me direct toll free at (800) 891-5824.
Receive Customized LTC Insurance Illustrations & Advice
It will be my pleasure to help you to find your best long term care insurance policy and to guide you through structuring your policy benefits to best meet your concerns and objectives. I work with all of the leading underwriters including OneAmerica, Securian, Nationwide, Lincoln, MassMutual, Brighthouse, Global Atlantic, Thrivent, Mutual of Omaha, National Guardian Life, and more. For free quotes and illustrations and unbiased advice, please call me toll free at (800) 891-5824. Or if easier, please use the link below to my online calendar to book a call with me.
Jack Lenenberg, J.D.
Licensed In All 50 States