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Metlife Long Term Care Insurance Death Benefit – A healthy 60-year-old can now receive $189,000+ in Life Insurance and $567,000++ in Long-Term Care Benefits, tax-free, for a $100,000 cash payment. A new “Spouses Policy” has been introduced that covers both spouses and provides cash payment options, providing the freedom to choose LTC caregivers, even family members. Read on to learn more about both!
You may be wondering who should and who should purchase a Hybrid Long Term Care plan. These plans are ideal for those who have a net worth between $500,000 and $5 million. Below $500k, traditional LTC plans are more reasonable, and above a few million dollars, self-financing future care costs can be less risky.
Metlife Long Term Care Insurance Death Benefit
Why these plans make financial sense: A healthy 60-year-old woman can get a 89% tax-free return on life insurance benefits (and 102% for a man of the same age) while earning 500%. tax-free leverage on their money for Long-Term Care services.
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That said, setting aside $100,000 from your retirement into a hybrid long-term care plan can generate a guaranteed return of between $189,000 – $202,000 tax-free to your loved ones through life insurance … but there is more .
A $100,000 premium can also create a long-term care account of up to $607,000 in cash, tax-free, for Long-Term Care services. There is simply no other safe way to get this powerful.
To get long-term care insurance, you must be healthy enough to qualify based on the insurer’s underwriting process. This approval process can be difficult.
Certain ongoing health conditions may mean you are not eligible for coverage. For example, if you have a history of major conditions like cancer, heart disease, stroke, diabetes, or arthritis, you may not be eligible. Other red flags are if you use a cane or walker, have recently fallen, or need help with activities like bathing or dressing. Smaller problems like taking too many medications or being overweight can also affect your acceptance.
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The key is that insurers want to offer these policies only to those who need care in the near future. They will review your entire health background and medical records. It is a good idea to have a private conversation with an insurance agent. They can give you personalized feedback on whether your particular health history would be suitable for coverage. Don’t assume you won’t without exploring your options first.
Many of the best long-term care insurance plans pay for your benefits. These cash payments are called “compensation payments”.
Cash benefits give you more flexibility to spend however you want. You can use the money to pay for nursing home care, assisted living, or home health care. You can even use it to pay a family member for care.
With cash benefits, you don’t need to send in receipts or paperwork to prove how you spent the money. The insurance company sends you a monthly check for as long as you qualify. That’s tax-free income that you can spend as needed.
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Remember – if you use some or all of the long-term care benefits, it reduces the death benefit your beneficiary receives. For example, if you use $200,000 in long-term care benefits, your beneficiary may receive only what is called a “residual death benefit” with some companies or a “minimum death benefit” with others.
To get long-term care insurance, you usually pay a large upfront premium, such as $125,000 per person. But some policies allow you to spread the money even in 5 or 10 years.
The benefit of paying premiums is that it provides a pool of money that you can draw on tax-free if long-term care is needed. This gives you important options in the future.
The latest statistics from LongTermCare.gov show that 70% of people who live to age 65 will need long-term care.
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In order to get a hybrid long-term care insurance policy, you generally need to be in good general health. The insurance company will review your full medical history as part of the application process.
Certain chronic health conditions can make the ability to get vaccinated difficult or impossible. For example, a history of cancer, stroke, heart attack, or joint problems like arthritis can prevent admission.
Insurers want to offer these policies only to those who need care in the near future. They are particularly strict in assessing health after the COVID-19 pandemic.
If you are generally healthy with only minor conditions like high blood pressure or high cholesterol controlled by medication, you will qualify without a problem.
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A quick 5-minute phone call with a representative can give you an initial assessment of whether or not your health profile will meet the approval guidelines.
If you don’t have hybrid policies due to health, there are alternatives like annuities that can still provide some bonuses or benefits for long-term care expenses. An insurance professional can find the best options for your unique situation.
The key is not to assume you won’t qualify – have a professional assess your full health profile first. Many in good health can still get the vaccine.
When you consider paying an insurance company a one-time payment of something like $100 – $175k, or $7-15k/year in premiums, you only want a company with an A+ rating or better. There is only a small benefit in taking the risk of going with a small company.
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Why can’t I pay for this insurance every year like I do for my other policies (eg: home, auto, health)?
LTC policies are “traditionally” paid year after year, for several thousand dollars a year. As time went on, even the best companies began to change rates on policies years after the sale, and those predictable annual payments that people bought became less predictable. This is obviously a problem when on a fixed income.
If you are researching Long Term Care Insurance, you will want to compare a Hybrid LTC policy where you can purchase a policy and pay in full in 1, 5 or 10-year payments.
Best of all, the premiums are almost always guaranteed and with many plans, your benefits are also in the future.
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We analyzed three Hybrid Long Term Care policies for sale in 2023 and came up with the following table:
Traditional Long Term Care Insurance rates can be inflated, so it is wise to look into hybrid long term care insurance as this product has a guaranteed premium.
Hybrid Long-Term Care Insurance policies are also a life insurance policy with a minimum amount of premiums built into the plan that is paid out tax-free to the family on death if the care is never needed.
Insurers have embraced the idea of offering Hybrid Long Term Care coverage with payment options of 1, 5 or 10 years. More than a dozen advanced hybrid-LTC products have come to market in the last five years.
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The list above is not comprehensive, but these are the top companies we see that have competitive hybrid offerings, and our free service will compare all of the above side by side.
Cash benefits are another important advantage of hybrid policies offered by both Nationwide and Securian’s Minnesota Life. Cash is king, as they say, and it’s no different in the LTC world. Cash benefits mean you can spend your money as you see fit without needing to approve care (at home or in the center).
Being flexible and paperless can be a huge advantage if you want to save time in the future. If you have children, they will thank you for purchasing a cash indemnity policy. Some companies don’t even really have a claim form; Once approved, they only send money every month.
The trend has shifted towards cash benefits as more and more consumers find mistakes in sending receipts each month. Some of the cash indemnity hybrid long-term care plans actually require a claim form. Ask your adviser about this, as it is important to think about the “other side” of the insurance coin.
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Let’s take a healthy 62-year-old man and consider “traditional” Long Term Care Insurance quotes versus a Hybrid Life Insurance / Long Term Care policy from one of the A+ rated insurers that offer these types of plans.
This 62-year-old can pay a $100,000 single payment to get a hybrid policy with $398 in benefits, $638 in LTC benefits and $135,591 in Life Insurance Payments to the family if care is never needed.
Here’s a comparison of a hypothetical “3% Return” on your insured money in a bond fund, versus the Total LTC Endowment you’d have (tax-free) when you buy a hybrid policy over an S&P indexed policy . With the indexed option, your benefits can never go down but can beat the market in good years.
We have also drawn up the Death Enrollment graphic – your beneficiary will receive the guaranteed payment tax-free if LTC is not required. You can see over time that it stays the same while self-insured and LTC benefits grow.
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This table continues, but the trend is clear. Long Term Care benefits are growing and growing significantly beyond the self-insured 3%.
