“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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“More consumers have been calling with questions about these increasingly popular options but they clearly don’t understand there can be significant differences between policy costs and benefits,” explains Jesse Slome, director of the American Association for Long-Term Care Insurance.  “Often they are presented with one plan option and that may or may not be the best option available for their future wants and needs.”

The Association has created a new presence on the organization’s website that spells out seven differences between available hybrid plans.

“Our goal is simply to make consumers aware of the differences,” Slome notes.  “You only buy long-term care insurance protection one time and so it is vital to get as much information as possible before you spend what can be a considerable amount of money.”

The long-term care insurance expert points out some of the significant differences include how one is ultimately paid benefits.  “Some policies offer a limp sum cash payment once you meet the claim qualifications,” Slome explains.  “Others are more restrictive and reimburse and may have requirements regarding who can provide care.”

Most hybrid long-term care policies are life insurance policies.  “The ability to have a death benefit paid to beneficiaries is something that makes these attractive to consumers,” Slome notes.  “One policy will provide a death benefit greater or equal to what you paid in. Another will have lower death benefit but higher LTC benefit amounts.”

To learn more about hybrid long-term care insurance visit the organization’s website.  The American Association for Long-Term Care Insurance advocates for the importance of planning and supports insurance professionals who market long-term care insurance.  To get information or request long-term care insurance quotes from a specialist in your area call the organization at 818-597-3227 or visit their website at www.aaltci.org.

The post Hybrid Long Term Care Insurance: Read 7 Plan Differences appeared first on American Association for Long Term Care Insurance.

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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New 1035 Exchange Guide

A new guide published by the American Association for Long-Term Care Insurance (AALTCI) kicks off a national campaign to heighten awareness for the use of 1035 exchanges for effective and tax-advantaged LTC planning.

The AALTCI Guide To Long-Term Care Planning Using Using IRS Approved Exchanges formally launches the national consumer and insurance-focused campaign.

“Section 1035 exchanges are one of least known planning strategies,” declares Jesse Slome, executive director of AALTCI. “Every insurance agent and financial professional who has prospects or clients in their 50s, 60s and 70s are going to need to familiarize themselves with the significant advantages they provide.”

“Americans have $2.8 trillion in fixed and variable annuities and we know far too few older adults have a financial strategy to deal with the real risk of needing long-term care,” Slome reports. “Many of these individuals could benefit by taking advantage of a 1035 exchange; repurposing an existing annuity into one that continues to accrue but also can provide.”

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

MESSAGE TO CONSUMERS:  The Association has made this informational guide available online.  You can read it from any device and NO SIGN-IN information is required to access and read the guide.  If you find the information of value we encourage you to discuss with your current insurance or financial professional.  Or, if you prefer, complete the online form (also on the web page) and we will connect you with one knowledgeable independent professional familiar with how these exchanges work as a benefit for consumers.

MESSAGE TO INSURANCE AND FINANCIAL PROFESSIONALS:   You may also access and read the guide online.  It can also be downloaded.   As the Association moves forward on it’s awareness efforts we will decide next steps.  Watch the Association’s website for more details.

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The Association’s annual study of leading insurers found that 53 percent of buyers of these hybrid policies were under age 65 in 2011 compared to only 48 percent in 2010.   Some 42.5 percent of male and 38.5 percent of female buyers were between ages 55 and 64 explains Jesse Slome, director of the national trade group.  Nearly one in 10 buyers was between 45 and 54.

“A linked benefit policy has advantages that many pre-retirement consumers find attractive,” Slome notes.  Policies can fund expenses when qualifying long-term care is needed at home or in a skilled care facility.  Some linked, or hybrid products, allow unused benefits to pass to named beneficiaries income tax-free.  “At a time when long-term care is increasingly top of mind, these life insurance-based solutions avoid the ‘use it or lose it’ risk associated with traditional long term care insurance,” says Chris Coudret, CLU, ChFC, Vice President, OneAmerica one of the nation’s leading insurers offering linked benefit solutions.  “In most cases, people make a single payment, effectively removing the risk of future premium increases.”

The AALTCI study reported sales for the participating linked benefit insurers increased 14 percent in 2011 and the premium increased almost 20 percent.  To learn more or obtain long term care insurance costs from an Association member call (818) 597-3227 or visit the organization’s website www.aaltci.org.

Established in 1998, AALTCI is the national trade organization established to create heightened awareness regarding the importance of planning for long term care.  To access or read three free consumer guides outlining ways to reduce costs for long-term care insurance visit the Association website http://www.aaltci.org/long-term-care-insurance-costs/

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