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Below are some frequently asked questions about Life Insurance with Long-Term Care.
Still have questions? Call us at 813-736-4397 or email customerservice@corestream.com.
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Long-term care (LTC) is the personal care or supervision needed by persons of all ages for an extended period (custodial, supervisory, or skilled care).
Often this is because of conditions associated with the effects of aging, but long-term care may be needed at any time, due to an accident or illness. At some point in our lives, it is estimated that more than 60 percent of us will need assistance with things like getting dressed, driving to appointments, or making meals.
It is a common misconception that long-term care is covered by health or disability insurance. Long-term care services are typically not covered by Medicare, Medicaid, private health or disability insurance.
This means you will need to rely on your savings, your family or insurance to cover long-term care costs. With private nursing rooms now costing over $100,000 a year on average and costs are expected to rise, it is important to have a plan.
This program is a Universal Life Insurance Policy with Long-Term Care (LTC) Benefits which provides dual protection for the cost of long-term care and financial support for your beneficiaries after you are gone.
The typical structure is you elect a life insurance benefit amount and will also get long-term care coverage. The long-term care coverage amount is a multiple of the life insurance benefit amount and paid out in monthly increments.
There are generally two ways you might use the policy:
If you don't need long-term care in your lifetime, there is still a death benefit available to your beneficiaries. As an example, if you buy $100,000 of life benefit coverage and don't need any of that for long-term care expenses, your beneficiaries would still be able to receive up to $100,000 death benefit.
If you need coverage for Long-Term Care service, the benefit will pay 4% monthly of the total amount of coverage you buy once you qualify for benefits. Again, using the example of $100,000 in life benefit coverage you will receive $4,000 a month for up to 50 months (about 4 years) for a total potential benefit of $200,000.
The best way to see your pricing is to enter your information online. You are under no obligation to purchase once you start the enrollment process and can exit anytime.
You will enter some personal information and choose a death benefit from $25,000 - $300,000, in increments of $25,000. The maximum total LTC benefit will be 2x the death benefit amount. The long-term care benefit is paid monthly at 4% of the selected death benefit amount for a maximum of 50 months (about 4 years).
Only you can make the decision about the right length of policy and coverage amount for you. However, the program is designed to cover beyond the average typical time of long-term care claims which is 2-3 years depending on care venue.
The premium is based on how much death benefit you select, the age that you are at the time of application and your smoking status.
Yes, you can request to increase your existing universal Life Insurance policy at a later date (after your 30-Day Free Look Period) with additional underwriting. If approved, the increase in coverage will be based on your current (attained) age.
If you select a death benefit within the program’s Guaranteed Issue amount and are between the ages of 18 and 64, there are no medical questions and acceptance is guaranteed. Guaranteed issuance is unique to special enrollment periods and does not re-occur every year.
There are two sets of potential questions you will be asked if you apply for coverage beyond your available guaranteed issue amount:
Within a certain benefit range (called the modified guaranteed issue) you may only need to answer a shortened health questionnaire consisting of the two questions:
If either of these questions is answered “yes” or you select above the modified guaranteed issue range, additional health questions will be asked which includes a full health questionnaire, height/weight evaluation, Medical Information Bureau (MIB) screen, and a prescription drug screen. Additional medical questions may be asked based on findings.
This is called simplified issue - here are some examples of the types of questions asked at this stage:
Has any person to be insured:
Questions may vary depending on your state and benefit amount selected the best way to see the questions specific to your coverage is to begin the enrollment process.
Yes, if you do not qualify for an amount beyond the GI limit you will still be able to receive a policy up to the full amount of the guaranteed issue.
You qualify for long-term care by requiring assistance with 2 or more activities of daily living (transferring, continence, bathing, dressing, eating, toileting) or you have cognitive impairment expected to last more than 90 days. You also need to be receiving care from a licensed professional in a LTC facility, nursing facility or receiving home health care. Benefits are payable after you meet your 90-day elimination period. Meaning, benefits will only begin payment 90 days (about 3 months) after your LTC needs begin.
A qualified health professional will need to certify that you meet the activity of daily living or cognitive impairment requirement.
Not directly, the long-term care benefit does not directly cover caregiving provided by family. The benefit is for professional long-term care. However, the full benefit amount is paid monthly when you meet the criteria for benefit payment and payments begin. If the benefit amount is not entirely consumed by long-term care expense, any cash left over can be used at your discretion for informal care expenses.
If you qualify for LTC benefits, where you receive care is up to you (at home, assisted living, adult day care, nursing home).
The universal Life Insurance policy will only pay LTC benefits for care received in the United States or Canada. Death benefits are paid anywhere in the world.
There are two types of Universal Life policies available, depending on your age at the time of enrollment:
Trustmark’s Universal LifeEvents® plan applies to enrollees ages 18-64. It pays a higher death benefit during the working years when expenses are typically higher, and families need maximum protection. The death benefit reduces to one-third at age 70 or the beginning of the 15th policy year, whichever occurs last. (The death benefit reduction does not impact premiums or LTC benefits.)
Trustmark’s Standard Universal Life plan applies to enrollees ages 65 – 70. (The death benefit will not reduce at age 70.). It is important to note LTC is not available for applicant ages 71 to 75.
Coverage will remain in force as long as there is sufficient cash value to cover the monthly expense, rider and cost of insurance charges. If insufficient, the coverage will lapse.
If an insured cancels the policy after the 30-Day Free Look Period, they will receive any Cash Value minus any applicable policy surrender fees.
Coverage is designed to mature at age 100. If the insured is living and the coverage is in force on that date, the cash value will be payable, and the coverage will terminate.
The illustration provided when you receive your coverage certificate will demonstrate the projected coverage period at the selected planned premium rate under both the current and guaranteed scenarios.
You will also receive an annual statement on the anniversary date of your policy to review your coverage period.
Upon death your beneficiaries will receive the death benefit.
If the employee applies for coverage, then coverage is available for the spouse, however, coverage amounts, and qualification requirements may vary.
Your premium will be based on your age at the time of issue. You will receive an annual statement on the anniversary date of your policy that will explain the details of your coverage and your policy activity.
The premium will be deducted from your paycheck based on your pay schedule (monthly, bi-weekly…etc.).
The premiums are paid post tax.
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This policy is completely portable – meaning you take the coverage with you if you were to change jobs or retire from your current employer. You should contact Trustmark to arrange for direct billing, and you can continue coverage without any change in premium or benefit amounts.
Yes, the interest rate is 8% on policy loans.
No, your premium does not increase due to age. You lock-in your premium based on your age at enrollment.
The plan includes a 6/6 pre-existing condition meaning if a claim is filed within the first 6 months from the enrollment date due to a pre-existing condition 6 months immediately prior to the enrollment date, the claim would not be paid. If a claim is filed after 6 months from the enrollment date, the pre-existing condition clause is void. Refer to your policy for the pre-existing condition definition.
No, premium payments will be waived while you are receiving payments under the LTC benefit.
The insurance company requires SSN to set up the policy as it is used for tax purposes and claims. Height and weight are used in underwriting if you are ineligible for Guarantee Issue underwriting and are required to answer health questions.
Benefits paid may or may not be taxable. Whether or not You or Your Beneficiary incur a tax liability when benefits are paid depends on how the IRS interprets applicable portions of the Tax Code. As with all tax matters, you should consult Your personal tax advisor to assess the impact of this benefit. The insurance company has no responsibility for any tax consequences of any benefits paid under this policy. The rider for long-term care insurance is not intended to be a federally qualified long-term care insurance contract.