Accelerated Benefit Rides are the newest entry to the LTC landscape. Unlike linked benefit solutions where there is often a second tank of gas for LTC access, these products are mainly designed to spend down the life insurance for a care event. These solutions were built for families with a need for legacy assets first but with the option to tap that benefit while living. Monthly benefits are often a percentage of the death benefit…i.e. 2%, 4%. There are essentially 2 types of riders, indemnity or reimbursement.
Chronic Illness vs. Long Term Care riders has a finite distinction. One supports non recoverable conditions only whereas the other supports recoverable OR non recoverable. Chronic illness riders will pay claim only when the condition is expected to last indefinitely. Often the premium for this rider is included in the base policy. A LTC certification is not often required. These riders can also not be positioned or sold as long term care riders. A true LTC rider does not require the condition to be permanent. Certification is required. LTC riders a little more flexible in their coverage opportunities. When clients ask me which one is better? I respond that it’s a personal preference! That’s what is so great about our current offerings. We need to ask the client what their key benefit drivers are so that we can point to a solution that fits best.
Syndicated financial columnist and talk show host Steve Savant interviews nationally recognized long term care author and expert Maria Sarci.