Insurance Agent Forum

[al3]

I just read this:
http://www.calbrokermag.com/Magazine...tc-vacarro.htm

What is the basic difference (advantage/disadvantage) between a life policy with an accerlated death benefit (ADB) vs. a long term care policy... when used for LTC purposes? Which solution do you favor and for whom?

Thanks,

Al

[Alsky]

To access the Accelerated Death Benefit on a life policy, most companies require the insured be terminally ill with a life expectancy of 12 months or less... some companies such as M of O require 24 months or less. Usually it (being terminal) has to result from a critical illness. Accessing the ADB could have tax ramificationss as this is considered income in most cases and the insurance company charges a fee to execute this rider. The death benefit is reduced by the amount of acceleration and fees.

Usually, the insured can access up to 50% of the death benefit, however, there are companies that allow a higher percentage.

The insured does not have to be terminal to access benefits with LTC policy. Long term care can mean many different things but any chronic or disabling condition that requires nursing care or constant supervision can bring on the need for long term care services.

Long term care means not only care in a nursing home, it can also mean nursing care in your own home and help with the activities of daily living, such as dressing, eating, bathing and taking medicine.

Al

[James]

Having a stand alone Life with a LTCi and ROP feature will give you better bang for the buck. Yet to address another point in the story about declining sales in the LTCi field. About three years ago most big hitters in the LTCi field raised prices and were introducing newer products at a higher cost to reprensent the real cost of LTCi. Well needless to say you had a Fire Sale going on, meaning that after the sale of the older products and the new more expensive products that sales naturally fell off from previous years. This is expected to turn around, hopefully this year!