TransACE with Long-Term Care - Twice the Value, Twice the Protection
We all know the value of a life insurance policy and how it can provide a tax-free death benefit to a beneficiary to replace income or to preserve an estate, just to name a few of its benefits.
When a person purchases a TransACE® Universal Life policy with an LTC (Long Term Care) rider, the benefits take on a whole new level. When you have a life insurance contract that can also provide the insured with the ability to withdraw 2% of its face amount per month for use toward long-term/custodial care, you have a product that gives you protection while alive and someone or something else protection when you pass away.
Most of us have had experience with being part of a long-term care situation, usually with close or extended family, and we know the stress and toil that family members have to provide for them around the clock.
The “dual answer” to the complex problem of life and death circumstances requires smart investigation. Upon investigating this product, offering it to clients and protection them with it, I have seen how it will “always” benefit some party in some way. I have also noticed that in comparison to other products of its kind, it is one of the most cost effective, and benefit enriched products available.
Here is a quick list of its benefits and features:
LTC Rider Benefits
Benefit Type: Indemnity
Issue Age: 18-80
LTC Specified Amounts: Minimum: $25,000 ($100,000 for Select risk class on the base policy and subject to state variations) Maximum: $1,000,000
LTC Underwriting Risk Classes: Preferred Nonsmoker, Standard Nonsmoker, Standard Smoker, Substandard ratings ranging from table A-D are available for standard risks. Note: LTC Rider is not available on policies rated higher than table D (or equivalent); LTC Rider and policy may have different risk classes.
LTC Benefit Amount: Maximum benefit payment is the lesser of: 2% per month of the LTC Specified Amount when LTC benefits begin; or the per diem amount allowed by HIPAA times the number of days in the month (the per diem limit for 2014 is $9,900/month*
Benefit Eligibility Trigger: Chronically Ill- Unable to perform, without substantial assistance, two or more of six specified Activities of Daily Living (ADLs) for an expected period of at least 90 days (bathing, continence, dressing, eating, toileting and transferring); or Severe Cognitive Impairment
Example of Qualifying LTC Services: (not exhaustive list): Long Term Care Facility Confinement, Home Health Care Services, Home Care Services, Adult Day Care in an Adult Day Care Center, Hospice Care by a Hospice Care Provider, Respite Care
Elimination Period: 90 service days on which the insured has incurred Qualified LTC Services expenses (needs to be satisfied only once)
Claims Coverage: 50 U.S. States, District of Columbia and Canada only
Tax Qualified Status: IRC Section 7702B(b)
LTC Rider Features
Guaranteed Level LTC Rider Charges: The TransACE® LTC Rider charges are guaranteed and will not increase during the life of the policy.
Residual Death Benefit: Available after the LTC Rider maximum amount has been paid. Equal to the lesser of 10% of the policy face amount from inception less any outstanding policy loans; or $10,000
Policy Lapse Protection: Policy will not lapse while the Rider benefits are being received even if the policy’s net cash value is not sufficient to pay the monthly deduction due.
Waiver of LTC Rider Charges: LTC Rider charges waived while on claim; all other policy monthly deductions continue.
* Minimum monthly benefit is $500. The HIPAA per diem for 2014 is $330. The monthly maximum benefit, if limited by the HIPAA per diem amount, will fluctuate depending on the number of days in the month. Calculations are for maximum benefit and the policy owner may choose to receive a lower amount.
About the author: Kyle McDonald holds FIC, FICF, FSCP® & CLTC designations. His viewpoint on life insurance is simple, “Anyone with a family must have life insurance. In the end, life insurance is for others you care about, not you.” He is ready to help you and your family get the best option available. Contact Kyle today at 1-800-651-1953 or KMcDonald@Pivot.com.