Finally coming to the US:
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WHAT IS IT?
An "Immediate Care Plan" is also called an "immediate needs annuity" or an "impaired risk annuity." These income annuities have been used extensively in Great Britain for more than 25 years, and a new option is now available in many states across the US.*
An immediate needs annuity is an insurance product that can be bought by individuals who already need care and are self-paying for their long-term care costs. (It is NOT a "Medicaid-qualifying annuity" nor should it be used if someone is contemplating applying for state Medicaid benefits.)
Simply, this is a Single Premium Immediate Annuity (SPIA) that is uniquely designed and priced to benefit people who already need care. In exchange for a lump-sum, single-premium payment to an insurance company, the buyer is guaranteed to receive regular income payments for the care that they need, for the rest of their life.
Typically a client uses a portion of his or her assets to pay the premium to create additional, guaranteed income to cover the "care gap" between current income and the cost of care. By doing this, an individual can have peace of mind that there is a consistent amount of money available for their care costs every year.
An immediate needs annuity is an insurance product that can be bought by individuals who already need care and are self-paying for their long-term care costs. (It is NOT a "Medicaid-qualifying annuity" nor should it be used if someone is contemplating applying for state Medicaid benefits.)
Simply, this is a Single Premium Immediate Annuity (SPIA) that is uniquely designed and priced to benefit people who already need care. In exchange for a lump-sum, single-premium payment to an insurance company, the buyer is guaranteed to receive regular income payments for the care that they need, for the rest of their life.
Typically a client uses a portion of his or her assets to pay the premium to create additional, guaranteed income to cover the "care gap" between current income and the cost of care. By doing this, an individual can have peace of mind that there is a consistent amount of money available for their care costs every year.
WHAT MAKES THIS DIFFERENT THAN A REGULAR SPIA?
Single Premium Immediate Annuities (SPIAs) have been around in the US for more 200 years as a tool to help individuals create a type of personal "pension" income for retirement. As the name suggests, a single premium (lump sum) is paid to an insurance company that then guarantees a monthly income for as long as the buyer lives - sometimes also with a guaranteed income payment period.
A "regular" SPIA is priced based on age, gender, current interest rates, and standard / "normal" life expectancy tables. This is appropriate for a healthy person.
THE CARE DIFFERENCE:
But what about someone who needs care? They have physical and/or cognitive/memory impairments and limitations often along with other medical conditions, and therefore someone who needs care would be expected to have a shorter-than-normal life expectancy.
Here's where the new "immediate need" (or "impaired risk") SPIA comes in. The premium and income is not based on a normal life expectancy table, but it is personalized through medical underwriting.
But the underwriting in the this case is "opposite" of most insurance products.
The more care someone needs, the greater their physical and/or memory impairments are, the BETTER the financial outcome may be with this immediate need annuity.
In other words, the lump-sum, single premium may be significantly lower to guarantee the same level of income as compared to a standard income annuity. Or the amount of income could be higher for the same premium amount. This is determined individually through the underwriting process.
A "regular" SPIA is priced based on age, gender, current interest rates, and standard / "normal" life expectancy tables. This is appropriate for a healthy person.
THE CARE DIFFERENCE:
But what about someone who needs care? They have physical and/or cognitive/memory impairments and limitations often along with other medical conditions, and therefore someone who needs care would be expected to have a shorter-than-normal life expectancy.
Here's where the new "immediate need" (or "impaired risk") SPIA comes in. The premium and income is not based on a normal life expectancy table, but it is personalized through medical underwriting.
But the underwriting in the this case is "opposite" of most insurance products.
The more care someone needs, the greater their physical and/or memory impairments are, the BETTER the financial outcome may be with this immediate need annuity.
In other words, the lump-sum, single premium may be significantly lower to guarantee the same level of income as compared to a standard income annuity. Or the amount of income could be higher for the same premium amount. This is determined individually through the underwriting process.
If you want more information,
or to know if an Immediate Care Plan may be available in your state,
CONTACT US at Comfort Long Term Care.
* This page is for information/educational purposes only. It is not meant as a solicitation for any particular product or insurance company. An Immediate Care Plan may not be available in every state. Consumers should consult with a qualified, licensed, local insurance agent for more information about availability.
