Comparison: Hybrid LTC Products

A comparison of some of the most popular hybrid LTC policies:

Lincoln MoneyGuard II, One America Asset Care & Nationwide YourLife CareMatters

Lincoln MoneyGuard II:

  • Most maximum monthly LTC benefit per premium dollar
  • 0-day elimination period
  • Premium schedule:
    • Premiums can be paid between 1-10 years
    • Pay to age 65 option for younger clients
  • Two liquidity options:
    • 80% ROP
      • Provides most LTC leverage per premium dollar
      • Allows client to surrender contract for 80% of premiums paid in after all scheduled premiums have been paid
    • 100% ROP
      • For less leverage than 80% ROP option, client can surrender contract for 100% of premiums paid in after all scheduled premiums have been paid
      • Vesting schedule of 5 years from contract issue:
        • Year 1: 80%
        • Year 2: 84%
        • Year 3: 88%
        • Year 4: 92%
        • Year 5: 96%
        • After 5 years: 100%
      • 5% residual death benefit
        • After death benefit has been completely exhausted due to LTC claims, 5% of the initial death benefit is still paid to named beneficiary(ies) upon death
      • Reimbursement style payout – clients can either:
        • Clients can either submit receipts for their care, or
        • Have the carrier pay the care provider directly
        • In either of the above cases, the only benefits payable would be equal to the cost of their care
      • In most (not all) situations, 3% compound inflation in priced best and provides most leverage
      • In all situations, 6-year benefit is most advantageous for client
      • Contracts can only be individually owned (no joint policy for spouses)

 

OneAmerica Asset Care:

  • Though monthly LTC benefit for premium dollar will be least of any hybrid, it is the only hybrid with a lifetime LTC benefit which makes the potential total LTC benefits the greatest of any hybrid
  • 60-day elimination period for facility care, 30-day elimination period for home care
  • Premium schedule:
  • Single pay
  • 10-pay
  • 20-pay
  • Life-pay
  • Liquidity varies based on how contract is set up, but has the least liquidity of any of our hybrid contracts
  • No residual death benefit
  • Reimbursement style payout
  • Inflation varies by state, but most common is no inflation for the acceleration of the death benefit, and after death benefit has been fully exhausted via LTC claims, 3% compound inflation on the monthly LTC benefit retroactive to day 1 of the contract
    • Example:
      • $100,000 death benefit, 4% acceleration
      • Claim starts in year 20
        • The first 25 months would be paid out at a stagnant $4,000/month
        • Month 26 of claim would be $7,306 and that monthly amount would continue to increase by 3% compound for each contract year going forward
      • Contract can be jointly owned by spouses
        • If jointly owned, death benefit (less LTC claims) would be on the second death

 

Nationwide YourLife CareMatters:

  • Cash indemnity style benefit: once a client qualifies for claim, they will receive their full monthly maximum benefit each month, rather than just their reimbursable expenses
    • Example:
      • MoneyGuard offers $7,500/month monthly benefit
      • CareMatters offers $6,500/month monthly benefit
      • Client only has $4,000 in reimbursable expenses
        • MoneyGuard benefit would pay $4,000 for that month
        • Nationwide benefit would pay $6,500 for that month
      • Because of cash indemnity, typically most competitive with higher monthly benefit amounts
      • 90 calendar day elimination period
      • Premium schedule:
        • Single pay
        • 5-pay
        • 10-pay
      • 100% ROP, vesting over 5 years:
        • Year 1: 85%
        • Year 2: 88%
        • Year 3: 91%
        • Year 4: 94%
        • Year 5: 97%
        • After 5 years: 100%
      • 20% residual death benefit
      • Inflation options: 3% simple, 5% compound. 5% compound most competitive but not available for all situations