What is Hybrid Long Term Care Insurance?
Hybrid Long Term Care Insurance policies combine traditional Long Term Care Insurance with Whole Life insurance. If you need care they work just like the traditional plans and it will pay for home or facility care. However, if care is never needed, then the Hybrid Long Term Care Insurance policy will return principle plus interest back to the family at death in the form of tax free life insurance benefit.
Hybrid polices are combining life insurance with long term care coverage. Hybrid Long Term Care Insurance’s funding mechanism is different than traditional plans. With Hybrid Long Term Care Insurance plans you pay either a one time lump sum premium or you can pay it over ten years. If you pay the premium all at once you get more long term care benefits than if paid over ten years. Another positive feature of Hybrid Long Term Care Insurance, also know as Assest-Based-Long-Term-Care Insurance, is the premium you pay is guaranteed to never increase.
Hybrid policies not only offer life insurance with long term care coverage, and life insurance, but they also have a feature that allows the buyer to change their mind if they no longer want the insurance and receive 80-100% of their premium back. How much you get back depends on the company.
There are around ten blue-chip Hybrid Long Term Care Insurance or asset based long term care companies on the market today. Each will have their pros and cons like with any product. Some will give more Long Term Care Insurance and less life insurance, while others will charge no fee if you change your mind. At LTC Tree we work with the all and help our clients drill down on these differences to determine which product is best for their needs.
What are the best Hybrid Long Term Care Insurance Products?
In no particular order the following are the top hybrid Hybrid Long Term Care Insurance products on the market today:
- Securian Financial or Minnesota Life: Their product is called Minnesota Life Secure Care and it has a balance of Long Term Care Insurance, Life Insurance if care is never needed and 100% of your money back after the fifth year if you change your mind. Minnesota Life’s Hybrid Long Term Care Insurance product will pay you 100% of the monthly benefits for you to spend how you see fit as long as at least $1 or more is spent on qualified Long Term Care expenses.
- Lincoln Financial Money Guard II: Similar to Minnesota Life’s plan, Lincoln’s Hybrid Long Term Care Insurance has about 2% less Long Term Care Insurance benefits than Minnesota Life but will offer about a 30% larger initial death benefit in the first 20 years. After around age 82 the death benefits are pretty much the same for the two aforementioned companies. If you change your mind Lincoln’s Money Guard II product will charge you a 20% fee. Lincoln’s product pays Hybrid Long Term Care Insurance on a reimbursement basis up to the incurred expenses and the care giver must be licensed.
- Pacific Life Premier Care: This product will give you about 15% less Long Term Care benefits than Lincoln and Minnesota Life but will give you 100% of your benefits back to you will no fee at any time. The death benefit is always equal to what you paid in.
- State Life – One America Asset Care I, Asset Care II, Asset Care III and Asset Care IV: This product is the only Hybrid Long Term Care Insurance product that offers an unlimited benefit period. The product is based on two buckets of benefits. The first bucket will pay for 33 months of care on their most popular plan design and those Hybrid Long Term Care Insurance benefits will not be indexed for inflation during this first 33 month period. After the first 33 months, the second bucket kicks in the 3% compound will be factored into for your benefits for as long as care is needed. The death benefit for couples is second to die which means it’s not paid until both spouses have passed away.
- John Hancock Protection Universal Life with Long Term Care rider: Their product will have the largest death benefit of the companies and you can use it for either Long Term Care or it will benefit death benefit. There is no inflation protection with this plan but John Hancock will start you off with the highest monthly benefit, but the benefits are NOT indexed for inflation. After about a 25 year premium protection period John Hancock may have to ask for more premium if they have not been hitting their internal rate of return.
- Nationwide Care Matters: Nationwide’s product offers the lowest monthly Hybrid Long Term Care Insurance monthly benefit but it’s paid on an indemnity basis. This means that the full benefit is paid to you once a claim is triggered and you can use the money however you see fit. The Care Matters product also offer a higher life insurance benefit than most hybrids so for those where the Life Insurance is most important this is one to study.
Would you like to compare all the Hybrid Long Term Care Insurance companies out there on our side-by-side proprietary software? Fill in the form below and we will FedEx to your front door you a binder packed full of all Hybrid Long Term Care Insurance information you will need to find our which company is best for you. Fill in the form below now to get started on checking this off your list.