Securian SecureCare IV Hybrid LTC Policy Review
Securian has leaped to the front of the hybrid long term care policy conversation with its new SecureCare IV policy. Known for its flexible cash indemnity long term care benefits, Securian has always offered an attractive hybrid LTC policy. Now, with its updated elimination period language and enhanced international coverage, SecureCare IV might ultimately be the best hybrid LTC insurance choice for many consumers.
SecureCare IV is a linked-benefit (aka "Hybrid") long-term care policy. Unlike traditional stand-alone LTC policies which are "use-it-or-lose-it" propositions, hybrid LTC policies that offer a guaranteed death benefit if care isn't needed, a long-term care benefit if care is needed, and a Return of Premium benefit if you change your mind. You also can include inflation protection benefit to help your coverage keep pace with rising health care costs. Additionally, unlike traditional stand alone policies which do not offer guaranteed premiums, hybrid policy premiums are fixed and guaranteed for life.
The Securian SecureCare policy's most attractive feature is its 100% LTC cash indemnity benefit structure. Many LTC policies are reimbursement models. You have to submit receipts to the insurance company to receive your policy benefits as reimbursement for your out-of-pocket expenses. There are only a few LTC policies that will provide you with 100% of your benefits in cash, no questions asked (Nationwide CareMatters, Brighthouse SmartCare, Securian SecureCare). You will benefit from owning a cash indemnity policy in a few ways. 1) Your family avoids the hassle of having to submit receipts for care prior to receiving your monthly payout; and 2) all informal care is covered with cash indemnity policies, including care provided to you by family or friends. You can spend your benefits as you wish, without being required to pay for licensed care.
The Nationwide CareMatters cash indemnity policy has been the market leader for 6 years. With this new updated SecureCare IV policy, Securian is taking direct aim at the Nationwide CareMatters policy to make its benefits comparable, if not slightly better.
With SecureCare IV, Securian has added 4 crucial new benefits:
- Long term care monthly benefits are now paid retroactively to Day 1 once the 90 day elimination period has been satisfied.
- If you go on claim while living abroad, you will receive 100% of your long term care benefits.
- If you die while you go on claim, you will receive a death benefit that will never be less than your premium paid-in to your policy.
- A new 20-Pay option is now available.
SecureCare IV is now the only hybrid long term care policy in the marketplace that will offer 100% cash indemnity benefits; 100% international coverage, no restrictions; and a retroactive elimination period that provides Day 1 LTC benefit payments.
The upgraded 100% International Coverage is huge for many people who may plan to retire abroad. Brighthouse will also offer 100% International Coverage, however Brighthouse will not retroactively pay benefits for the 90 day elimination period. Nationwide will cover the elimination period, but Nationwide will only provide international benefits for a limited number of years (2 years on CareMatters II, 3 years on CareMatters Together), not for the entire benefit period that Securian will now do.
Thus Securian may now be considered the best cash indemnity policy in the marketplace, if International Coverage is an important benefit for you.
Let's take a quick overview of the product highlights.
Securian SecureCare IV Product Highlights
Underwriter: Minnesota Life Insurance Company. A+ Rated (AM Best)
Minimum Face Amount: $50,000 ($2084 monthly LTC benefit)
Maximum Face Amount: $500,000 ($20,833 monthly LTC benefit)
LTC Benefit Type: Cash Indemnity (receipts for care not needed to be submitted as they are with reimbursement policies)
Couples Discount: Applied automatically for all applicants that are married or partnered. Only one need apply to receive the discount.
LTC Benefit Period Options: 4 years - 8 years
Inflation Protection Options: 3% simple, 3% compound, 5% simple, 5% compound
Return of Premium Options:
- Vesting: 100% premium refund to you upon cancellation subject to vesting schedule;
- 75%: Offers you a 75% return of premium that you have paid paid, all years.
- LTC Boost: provides return of premium equal to your policy's cash at the time of surrender and maximizes your LTC benefit (most popular)
Reduced Paid-Up Benefit: Should you fail to complete your premium payment schedule, your policy will provide you with a reduced paid-up benefit based upon the total premiums paid.
Guaranteed Minimum Death Benefit: $10,000 or 10% of the specified face amount whichever is less.
Elimination Period: 90 calendar days from the date the insured is certified as being Chronically Ill by a licensed health care practitioner. Home modification benefit of $5000 and caregiver training benefit of $1000 are available during the elimination period. LTC monthly benefits are paid retroactively after the 90 day elimination period is satisfied. Your first LTC benefit payment will be for 4 monthly benefits on day 91.
Qualified Long Term Care Services Examples:
Ault day care
Assisted Living
Bed reservation
Caregiver Training
Home Health Care
Home Modification
Hospice
Household Services
Informal Care
Nursing Home Care
Respite Care
International Benefits Outside the United States: Your Total LTC benefit pool remains unchanged and you can receive 100% of your maximum monthly LTC benefit for all qualified services, including informal care, outside the United States.
Payment Schedule Options: Single Pay, 5 Pay, 7 Pay, 10 Pay, 15 Pay and 20 Pay. Monthly bank draft or annual payments are available. there is no additional fee for paying monthly rather than annual. 1035 exchanges and additional lump sum premium contributions are available.
Waiver of Premium: Option to include on all recurring payment schedules.
Underwriting: streamlined, telephone interview only; no exam required. Medical records may be ordered at underwriter's request
How Securian SecureCare IV Works
When you need care, the last thing you want is a complicated process. SecureCare IV is built to ensure your access to your benefits is as easy as possible.
To Qualify for LTC Benefits: (all long term care policies have these exact 2 requirements)
- You must be certified as being Chronically Ill by a licensed healthcare practitioner, such as your doctor. To satisfy this definition you must either a) be unable to perform without assistance from another individual 2 of 6 activities of daily living (eating, bathing, dressing, toileting, transferring, maintaining continence) without assistance from another individual for a period of 90 days; or b) you must require substantial supervision due to having a severe cognitive impairment such as Alzheimer's or dementia.
- You must be prescribed care services in a plan of care.
SecureCare IV includes a Care Management Program to provide you with a dedicated team to convey guidance and support at claim time. Your care management team will help you understand your policy, guide you through your claims process and connect you with care resources in your area.
Once your claim is approved, SecureCare IV provides you with cash indemnity benefits to save or spend upon your care needs however you want. As long as you are on claim, you always have the right to receive 100% of your monthly maximum payment, regardless of your actual care expenses. You will never have the hassle of having to submit receipts for reimbursement, and you will never have to worry about whether an expense is covered. (Examples of policies in the marketplace that will require receipts for reimbursement to receive 100% of your benefits are NY Life Asset Flex, Lincoln Moneyguard Fixed Advantage, OneAmeriica Asset Care)
With 100% cash indemnity LTC benefits, you can use your long term care payments however you want: pay a family member for help, pay a professional caregiver for care; modify your house to make it safe; or save the benefits to spend in the future.
Securian SecureCare IV is one of a small handful of policies that provide 100% cash indemnity benefits (Nationwide CareMatters II, Nationwide CareMatters Together, Brighthouse SmartCare).
Here is an example of a typical policy design to provide an initial monthly LTC benefit of $8000 month in today's dollars funded with a single premium payment for a married male age 50. An $8000 initial monthly benefit is reasonable today to cover long term care costs in at home or in assisted living. Inflation protection is included.
Single Pay Premium: $101,864 (alternative payment schedules are available)
Guaranteed Death Benefit: $192,000
Initial Monthly LTC Benefit: $8000 month
Day 1 Cash LTC Benefits $620,967
Annual automatic 3% compound growth on LTC benefits
Age 85 Cash LTC Benefits: $22,511 month
Age 85 Total Cash LTC benefits available $1,747,317
This is excellent premium leverage for a 50 year old today. You can leverage a deposit of $100,000 into $1.8 million of tax-free cash long term care benefits in your 80's. And if care isn't needed, your premium deposit comes back to your estate tax free as a tax-free death benefit of almost $200,000.
Illustration of Securian Benefits
Securian SecureCare IV is an excellent policy. Now let's take a look at a few illustrations to see how its pricing compares with other hybrid long term care policies.
Comparison of Securian SecureCare IV Pricing With Alternative Policies
Using the same LTC benefits as above, $8000 month with 3% compound inflation protection, let's compare Securian's pricing with 2 of the alternative leaders in the long term care insurance marketplace, Nationwide CareMatters II and Lincoln Moneyguard Fixed Advantage. Let's look at pricing for men and women, ages 50, 60 and 70. I will include the Couples Discount pricing with all policies.
***Lincoln Moneyguard is a Reimbursement Policy. To receive 100% of your benefits, receipts for paid care must be provided.
One other point to keep in mind when you review the numbers below. Securian SecureCare IV will offer you 7 year LTC benefit periods and 8 year LTC benefit periods as an option. Nationwide CareMatters II will offer you 7 year benefit periods as an option. Many of my clients and I prefer longer benefit periods when designing these policies. For the sake of the pricing comparisons below I am only electing to use the 6 year benefit period because Lincoln Moneyguard does not offer you the option to buy 7 years or 8 years, and I want to be fair with highlighting the Lincoln Moneyguard Fixed Advantage pricing for you with the option that Lincoln can do.
Age 50 Married Male, $8000 month, 3% Compound Inflation, 6 Year benefit Period
Lincoln: $101,224
Securian: $101,864
Nationwide: $104,301
Age 50 Married Female, $8000 month, 3% Compound Inflation, 6 Year benefit Period
Lincoln: $117,993
Securian: $119,062
Nationwide: $122.501
Age 60 Married Male, $8000 month, 3% Compound Inflation, 6 Year benefit Period
Lincoln: $109,681
Securian: $123,284
Nationwide: $125,300
Age 60 Married Female, $8000 month, 3% Compound Inflation, 6 Year benefit Period
Lincoln: $131,328
Securian: $143,130
Nationwide: $149,592
Age 70 Married Male, $8000 month, 3% Compound Inflation, 6 Year benefit Period
Securian: $192,855
Lincoln: $200,765
Nationwide: $210,783
Age 70 Married Female, $8000 month, 3% Compound Inflation, 6 Year Benefit Period
Securian: $230,420
Lincoln: $248,775
Nationwide: $256,019
In looking at the above pricing, you can quickly see that the Securian SecureCare IV pricing is very good, especially when compared to Nationwide, its direct competitor that also offers Cash Indemnity benefits.
I find the Lincoln Moneyguard pricing to be interesting if you are 60 years old. Lincoln is aggressively priced lower than market at age 60, but Lincoln is not aggressively priced at age 50, nor at age 70. Possibly the marketers at Lincoln believe that a lot of retirement planning articles tend to always quote age 60 pricing and it can generate more inquiries?
Either way, if you you are comfortable with submitting receipts for reimbursement and you are applying at Age 60, you can save 10% premium with Lincoln. Otherwise, Securian might have your best policy if you are buying an individual policy.
Now keep in mind of course, Nationwide does offer a joint life cash indemnity policy CareMatters Together that will save you premium over buying two individual policies, so there is always this option to review as well. Securian and Lincoln do not offer the joint life option!
Here are all of the Securian SecureCare IV illustrations for the above scenarios.
Age 50 Male $8000 month 3% compound
Age 50 Female $8000 month 3% compound
Age 60 Male $8000 month 3% compound
Age 60 Female $8000 month 3% compound
Age 70 Male $8000 month 3% compound
Age 70 Female $8000 month 3% compound
Final Thoughts On the Securian SecureCare IV Policy
Securian really knocked it out of the park with refreshing this SecureCare IV hybrid LTC policy. It's pricing has always been good. And consumers have always loved the cash indemnity component of the plan. The prior iterations of SecureCare did not offer 100% benefits for international coverage, nor did SecureCare pay out any LTC benefits for the initial 90 days of claims. These two enhancements will certainly move the SecureCare IV policy to front and center for many applicants, especially those applicants that may have family overseas. Looking to the future, I would love to see Securian introduce a joint life hybrid policy such as the Nationwide CareMatters Together policy. This would be a welcome development. Another option I would like to see Securian consider in the future is accepting IRA rollovers and distributions to fund the plan, such as what OneAmerica currently allows. I am sure these thoughts will be discussed and considered in the Securian home office. For today however, I am pleased very much with this new policy launch.
Should you wish to explore all of your long term care insurance policy options, please feel free to give me a call. With 30 years of experience in the arena, I will be pleased to efficiently guide you through your planning and help to simplify a complex issue for you. Please call me at (800) 891-5824 for free illustrations. Or if easier for you, here is a link to my online calendar to schedule a call with me.
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Nationwide CareMatters Together Review (Joint Life)
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Lincoln Moneyguard Fixed Advantage Review
Nationwide CareMatters Annuity
