Cash Benefit LTC InsuranceHow to "future proof" your LTC insurance with the best coverage available |
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Cash is king, especially for LTC insurance benefits. And new Cash Benefit LTC insurance policy options now allow more people use this best-in-class policy design.
Unfortunately, 100% cash benefit LTC insurance is no longer available in a "traditional" LTC policy. However, some of the new "hybrid" (or "linked-benefit") LTC insurance plans still offer this flexible, simple benefit-payment design. One company is now offers its hybrid cash benefit LTC insurance on a more-affordable annual, life-pay premium structure instead of having to pay in a much larger amount over 10 years or a huge lump sum premium.
Unfortunately, 100% cash benefit LTC insurance is no longer available in a "traditional" LTC policy. However, some of the new "hybrid" (or "linked-benefit") LTC insurance plans still offer this flexible, simple benefit-payment design. One company is now offers its hybrid cash benefit LTC insurance on a more-affordable annual, life-pay premium structure instead of having to pay in a much larger amount over 10 years or a huge lump sum premium.
I have recommended and sold cash benefit LTC insurance since 1993. I own a cash benefit LTC insurance plan myself. And now more people will be able to afford this unique coverage design.
Why is cash benefit, LTC insurance the "best" coverage to have? Two primary reasons:
Why is cash benefit, LTC insurance the "best" coverage to have? Two primary reasons:
Simplicity.
The only thing you have to prove at claim time is benefit eligibility: at least stand-by help with at least two of six physical Activities of Daily Living, OR supervision for a Cognitive Impairment - identical to every other tax-qualified LTC insurance policy. No monthly filing of invoices and professional caregiver notes to release your reimbursement benefit. You get a check for your full policy benefit, every month, no matter who takes care of you, where, or how often.
The only thing you have to prove at claim time is benefit eligibility: at least stand-by help with at least two of six physical Activities of Daily Living, OR supervision for a Cognitive Impairment - identical to every other tax-qualified LTC insurance policy. No monthly filing of invoices and professional caregiver notes to release your reimbursement benefit. You get a check for your full policy benefit, every month, no matter who takes care of you, where, or how often.
Flexibility - this is key.
While cash benefit LTC insurance is the only type that allows you to use insurance dollars to pay a family member or other "informal" (non-professional/non-agency) caregiver, this is not the most important use of a LTC cash benefit.
Looking toward an unknowable future, a cash indemnity policy is the only type that can guarantee benefit payments for any type of care that is best for you. You will never have to ask the insurance company if your preferred caregiver or agency or facility is "covered" for reimbursement, nor will you have to beg for an "alternative plan of care" approval. It is cash; sign the check. And in that unknoable future, you can guarantee your plan will pay for modes of care or new types of facilities that the Baby Boomers have not even invented yet.
While cash benefit LTC insurance is the only type that allows you to use insurance dollars to pay a family member or other "informal" (non-professional/non-agency) caregiver, this is not the most important use of a LTC cash benefit.
Looking toward an unknowable future, a cash indemnity policy is the only type that can guarantee benefit payments for any type of care that is best for you. You will never have to ask the insurance company if your preferred caregiver or agency or facility is "covered" for reimbursement, nor will you have to beg for an "alternative plan of care" approval. It is cash; sign the check. And in that unknoable future, you can guarantee your plan will pay for modes of care or new types of facilities that the Baby Boomers have not even invented yet.
Remember the Jetsons' Rosie the Robot?! If you think that's far-fetched, look at your phone; 20 years ago it was a flip-phone that only made phone calls. Now it's a powerful computer that connects you to the world and runs your life!
Robotic care is coming.
While that may not be appealing to you today, if you could benefit from it in the future, would you want your LTC insurance to help pay for it?
Cash benefit LTC insurance will cover it.
How about an independent, non-agency caregiver of your choice?
Cash benefit LTC insurance covers it.
What will be the next "assisted living"? New types of residential care facilities are already being developed. With a reimbursement plan unless the facility meets the policy's specific language for what is covered, you cannot guarantee it will be covered. Do you want your choice of the best option for your future care to be based on a "maybe"?
Cash benefit LTC insurance "future-proofs" your coverage; it will pay for whatever care you need and want, even if it has not yet been invented!
Enhanced "Disability" Insurance
Here is another outside-the-box idea: Cash benefit LTC insurance is like a form of "catastrophic disability" coverage. The definition of "disability" is not "occupational" but rather "functional" (help with physical ADLs or cognitive supervision). Cash benefit LTC insurance can be used to cover "disability" risks that regular Disability Income insurance does not:
Hybrid cash benefit LTC insurance is not for everyone. Even on an annual, life-pay basis, hybrid LTC insurance is significantly more expensive than traditional coverage because hybrid plans provide both an accumulation of cash value and a death benefit if LTC is never needed - hybrid LTC insurance may also have guaranteed premiums - all of which adds to the cost.
But if you want and need the BEST, most flexible LTC coverage, you need to make sure you consider cash benefit LTC insurance.
While that may not be appealing to you today, if you could benefit from it in the future, would you want your LTC insurance to help pay for it?
Cash benefit LTC insurance will cover it.
How about an independent, non-agency caregiver of your choice?
Cash benefit LTC insurance covers it.
What will be the next "assisted living"? New types of residential care facilities are already being developed. With a reimbursement plan unless the facility meets the policy's specific language for what is covered, you cannot guarantee it will be covered. Do you want your choice of the best option for your future care to be based on a "maybe"?
Cash benefit LTC insurance "future-proofs" your coverage; it will pay for whatever care you need and want, even if it has not yet been invented!
Enhanced "Disability" Insurance
Here is another outside-the-box idea: Cash benefit LTC insurance is like a form of "catastrophic disability" coverage. The definition of "disability" is not "occupational" but rather "functional" (help with physical ADLs or cognitive supervision). Cash benefit LTC insurance can be used to cover "disability" risks that regular Disability Income insurance does not:
- High income that has been capped for DI coverage. Many doctors, attorneys, and other professionals cannot buy more DI, but they still want to protect more of their income especially for a worst-case disability (= LTC).
- Stay-at-home parent disability. The insurance industry has long advocated that families buy life insurance for a non-income-earning, stay-at-home parent. There is a huge economic value to the family for the care and work that parent does in managing the household and taking care of children. But what if there is a "catastrophic disability" (a "LTC disability")? Disability insurance is not available because there is no earned income to insure, but a family would need pay for child care and other services PLUS the cost of caring for the disabled spouse. Cash benefit LTC insurance can be a solution.
Hybrid cash benefit LTC insurance is not for everyone. Even on an annual, life-pay basis, hybrid LTC insurance is significantly more expensive than traditional coverage because hybrid plans provide both an accumulation of cash value and a death benefit if LTC is never needed - hybrid LTC insurance may also have guaranteed premiums - all of which adds to the cost.
But if you want and need the BEST, most flexible LTC coverage, you need to make sure you consider cash benefit LTC insurance.
Updated 7/20/2020
