“When interest rates rise insurers are in a better position to charge less,” explains Jesse Slome, director of the organization.  “Costs for linked-benefit long-term care insurance policies are definitely lower. With more insurers now offering this attractive form of protection, comparing before buying is more important than ever.”

According to the annual analysis, a 55-year-old male purchasing $165,000 of immediate benefits could expect to pay $900 a year for a traditional long-term care insurance policy. “Traditional LTC remains the most cost-efficient way to insure yourself because the policy does only one thing; pay for qualifying long-term care,” Slome explains. Rates for traditional LTC in 2023 are also slightly lower than the prior year.

“Linked-benefit or hybrid long-term care insurance policies are different in nature,” Slome notes. “We strive to give as close to an apples-to-apples comparison so consumers can better understand the contrast.”

The 2023 Long-Term Care Insurance Price Index reports that a male age 55 would pay $3,930 yearly for a policy providing a pool of $180,000 long-term care benefits. This represents a 15 percent decrease from the prior year reports AALTCI.

“People like the fact that linked-benefit LTC policies do double-duty, providing a life insurance death benefit if no long-term care is needed.”  For the policy used to compare, the minimum death benefit is $120,000, Slome notes.

The Association reports available costs for men, women and couples at ages 55, 60 and 65. “Price declines ranged but generally were in the 10-to-15 percent range. “That’s good news for consumers who are between ages 55 and 65, the prime age to undertake this important planning,” Slome adds.

Access 2023 Linked Benefit LTC Price Index

To see the 2023 Long-Term Care Insurance Price Index information for traditional LTCi policies, go to https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2023.php. The organization will add comparisons for linked benefit policies later this month.

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of long-term care planning. Since 1998 AALTCI has supported insurance professionals who market both traditional and hybrid long-term care solutions.  To access information, go to https://www.aaltci.org or call the organization at 818-597-3227.

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“With linked-benefit policies now outselling traditional long-term care insurance, consumers are requesting more meaningful price and benefit information,” explains Jesse Slome, AALTCI’s director.  ”The organization annually reports price information for traditional long-term care insurance.”

“Linked-benefit long-term care policies are different from traditional LTC policies,” Slome stresses.  “Prices vary of course but the more significant difference is the value of future benefits.”  The 2022 Linked Benefit Long-Term Care Price Index reports and compares a combination of premium costs as well as future available long-term care and life insurance payouts.

The analysis reports information for both men and women purchasing coverage at ages 55 and 65.  Four of the nation’s leading linked-benefit insurance companies were analyzed (without providing specific company names).  The analysis only included policies filed as IRC 7702B linked-benefits.

Two Examples For A 55-Year-Old Male

Yearly Cost:   (A)  $6,100/year   -   (C)  $5,235/year
Maximum LTC Benefit at Age 85:   (A) $753,627   -   (C)  $568,801
Death benefit (at Age 100):   (A)  $274,405  -    (C) $240,804

Two Examples For A 65-Year-Old Female

Yearly Cost:   (A)  $13,048/year   -   (C)  $12,368/year
Maximum LTC Benefit at Age 85:   (A) $560,796   -   (C)  $482,400
Death benefit (at Age 100):   (A)  $456,674  -    (C) $456,236

“The future potential benefits can vary from one insurance company’s policy to another,” Slome explained.  “Selecting the right coverage is a lot more complex than simply looking for the lowest premium cost.  And since it almost never pays to drop and replace coverage, making the right initial plan choice is of paramount importance.”

Linked-benefit policies are typically life insurance policies designed to pay a death benefit if none or only some long-term care benefits are paid out.  “Here again, the maximum death benefit for someone buying at age 55 varied from a low of $100,000 to as much as $274,405.”

The Association director stressed the importance of comparing coverage before buying. “With their growing popularity comes a need for increased consumer education,” Slome advises.  “we will be spending far more attention on this subject.”

To access the 2022 Linked Benefit Long-Term Care Price Index information, go to https://www.aaltci.org/linked-benefit-price-index-2022/.

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of long-term care planning and supports insurance professionals who market both traditional and linked-benefit LTC solutions.  To access the latest long-term care insurance statistics regarding need and insurance, visit the Association’s Data Center at www/aaltci.org/LTCFacts-2022/.

To obtain long-term care insurance costs from a long-term care insurance specialist call the organization at 818-597-3227 or visit their website www.aaltci.org.

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“Linked benefit long-term care insurance is now the favored choice of consumers buying protection,” states Jesse Slome, director of the American Association for Long-Term Care Insurance.  ”However, there are many things consumers don’t know about these products.  The Association’s new resource center will be designed to provide relevant information and address the questions and concerns we regularly receive from individuals.”

Slome noted that consumers mistakenly assume these products are relatively uniform.  “That’s simply not the case,” the long-term care insurance expert explains.  “There can be significant differences in pricing but more important in available plan benefits and options.”

The Association’s new resource shares comparisons of four leading linked benefit insurers.  “We give an example of coverage for a 55-year-old male,” Slome notes.  “Using the same policy design parameters, the maximum available long-term care benefit ranged from $568,801 to as much as $753,627   Likewise cash surrender values and the death benefits all varied.  These are all important factors for consumers to understand and evaluate when purchasing this coverage.”

“It almost never pays to switch policies once you’ve purchased, so doing it correctly the first time is of paramount importance,” Slome advises. “The contract governs everything about this coverage especially how benefits work and how much is paid out.  Too few people ever read the contract until they have a need for care which typically won’t happen for years.”

To access the new linked-benefit long-term care resource center go to www.aaltci.org/best-linked-benefit-long-term-care-insurance.

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of long-term care planning and supports insurance professionals who market both traditional and linked benefit LTC solutions.   To obtain linked benefit LTC comparisons and compare costs find a long-term care insurance specialist by calling the organization at 818-597-3227 or visit their website www.aaltci.org.

The post Association Launches New Linked Benefit Resource Center appeared first on American Association for Long Term Care Insurance.

“The number of in-force policies was approaching 600,000 in 2019 and keeps growing each year,” explains Jesse Slome, director of the long-term care insurance organization.  “Linked-benefit or hybrid policies are increasingly popular among those individuals who want some protection against future long-term care costs.”

According to the Association, linked benefit policies have overtaken traditional long-term care insurance policies in terms of annual sales.  ”They are two very different products each with some very specific advantages and consumers would be well advised to compare the virtues of both,” advises Slome.

The organization recently published the 2021 Long-Term Care Insurance Price Index.   Part of the study compared costs for traditional LTC insurance versus a hybrid or linked-benefit life insurance policy.

“A single male age 55 would pay $950 annually for a traditional long-term care insurance policy that offered a $165,000 potential pool of benefits.” Slome reports.  According to the AALTCI 2021 Price Index, yearly premiums for a linked-benefit life insurance policy that offered a $167,000 pool of LTC benefits as well as a minimum death benefit of $167,000 would cost $5,010 annually.

The Association posts 2021 long-term care insurance statistics and data on it’s website.  The 2021 price index for consumers ages 55 and 65 is also now available.

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of planning and supports insurance professionals who market both traditional and hybrid LTC solutions.   Request long-term care insurance costs by calling the organization at 818-597-3227 or visit their website at www.aaltci.org.

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New 1035 Exchange Guide

Millions of Americans who have existing annuity or life insurance policies can benefit from reading a new guide explaining the benefits of a 1035 exchange.

“Few individuals are familiar with Section 1035 of the Internal Revenue Code that allows an individual to repurpose an existing annuity of life insurance policy to one that includes tax-advantaged long-term care benefits,” explains Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). The national organization has just released the Guide To Long-Term Care Planning Using 1035 Exchanges.

The 24-page guide, accessible online, explores the basics of how 1035 exchanges can benefit individuals and includes several real-life scenarios depicting the advantages of converting existing annuities or life insurance policies. “The Pension Protection Act (PPA) enacted by Congress encourages individuals to plan for the very real risk of needing long-term care (LTC), and Section 1035 exchanges are one of today’s significant planning opportunities available,” Slome shares.

“The PPA provides meaningful tax- and long-term care planning advantages to consumers,” Slome notes. “Funds withdrawn from a traditional nonqualified annuity can be used to pay for long-term care expenses, but there will likely be tax consequences. A simple 1035 exchange to a PPA-approved linked-benefit annuity can provide 100-percent income tax-free withdrawals to pay for LTC costs.”

One of the leading providers of linked-benefit annuity and life insurance long-term care protection says many people aren’t aware of the tax implications of their current strategies.

“Americans have nearly $3 trillion in fixed and variable annuities set aside as part of their retirement planning strategy,” reports Chris Coudret, vice president and chief distribution officer at OneAmerica^®. “Many of these individuals could benefit by taking advantage of a 1035 exchange, which could offer tax benefits as well as provide long-term care benefits, should they be needed. This new guide can be a tremendous help to financial professionals looking for information and resources for their client conversations.”

OneAmerica will make copies of the guide available to insurance and financial professionals.

Free Access to Read The 1035 Exchange Guide Online

“If you are 50 or older and you have an annuity or a life insurance policy, a 1035 exchange could be the ideal way to plan for a future long-term care need,” Slome suggests. “You maintain the benefits you currently have while adding some tax advantages.  For couples, there is even the possibility of using one policy to provide tax-free long-term care benefits for both spouses.”

To read the 1035 exchange guide online visit the American Association for Long-Term Care Insurance’s website at www.aaltci.org/1035-exchanges.

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Established in 1998, the American Association for Long-Term Care Insurance advocates for the importance of LTC planning and supports insurance professionals nationwide.  Jesse Slome, founder and executive director of the organization, is a leading consumer advocate and author of numerous consumer and professional guides focused on retirement and insurance planning that have been published by governmental agencies and private organizations.

OneAmerica^® is the marketing name for the companies of OneAmerica. AALTCI is not an affiliate of the companies of OneAmerica. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice. Before replacing existing life insurance or annuities all factors should be weighed to determine suitability.

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