Janney LTC Solutions
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Your Guide to LTC
There are three broad types of insurance protection that address the cost of extended care. They are organized based on your primary need – do you only need coverage for care, or is it important to have some amount of benefit available at death?
Traditional LTC
Traditional long-term care (LTC) policies offer the most customization in benefit, but only allow access in the event of LTC need.
Hybrid Life/LTC
Hybrid Life/LTC policies offer LTC protection while offering a death benefit which often allows for the majority of premiums paid to be returned at death.
Life with LTC Rider
Life Insurance policies offer riders allowing access to a pool of money either in the form of LTC benefit paid monthly when care is needed or in it’s entirety upon death. This ensures the client and/or heirs receive the full benefit purchased.
Each type comes with unique characteristics and benefits that enables customization of a plan that best addresses your needs. For example, some policies include a return of premium (ROP) feature that several clients may desire so they have access to their premiums. Others may have a definition for benefit payouts that make placing the policy in trust more acceptable (reimbursement vs. indemnity). Use the information that follows to help determine which unique feature may best meet your specific needs. By understanding the choices available, you can start building a plan to address the devastating impact an extended care event could have on your retirement and future.
Traditional LTC
Description: Policy designed specifically for long-term care coverage with provides no death benefit
Client Profile: Doesn't require additional life insurance coverage; Inflation sensitive
Considerations: Premiums would likely go up
Death Benefit: None - may have ROP feature prior to a specific age
Claim Type: Reimbursement
Access to Cash Value: None
Premium Type: Typically life pay, premiums subject to change
Hybrid Life/LTC
Description: Long-term care coverage linked to a life insurance policy that provides LTC benefits as well as a death benefit
Client Profile: Wants to protect mainly against cost of LTC needs but also has a limited life insurance need; Likes the idea death benefit will be paid if LTC services are never needed
Considerations: Some carriers require Single premium or short pay required; Not partnership qualified; Paid LTC benefits reduce death benefit
Death Benefit: Yes - typically lower than life insurance policy for same premium
Claim Type: Reimbursement or Indemnity
Access to Cash Value: Loans against cash value or return of premium options
Premium Type: Single pay through 10 pay. Premiums are guaranteed.
Life with LTC Rider
Description: Life Insurance policy with a rider permitting access to the death benefit for long-term or chronic care needs.
Client Profile: Wants legacy for loved ones but would still like access to the death benefit if a long-term need arises
Considerations: No inflation protection; Paid LTC benefits reduce death benefit; Premiums may not be guaranteed(varies by product type); Not partnership qualified
Death Benefit: Yes - typically higher than linked benefit policies for same premium
Claim Type: Reimbursement or Indemnity
Access to Cash Value: Loans against cash value
Premium Type: Life pay or abbreviated. Premiums may not be guaranteed (varies by product type).
