I will most likely never use it. My clients seek maximum LTC leverage per premium dollar rather than a life insurance policy with an adb rider. This CareShield policy just doesn't fit into my practice.
Minnesota Life's Care Shield Product
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I will most likely never use it. My clients seek maximum LTC leverage per premium dollar rather than a life insurance policy with an adb rider. This CareShield policy just doesn't fit into my practice.
chronic illness riders do NOT pay the full face amount of the death benefit.
to determine the amount of the chronic illness benefit, the death benefit is re-calculated based upon "present value" which is based upon the insureds life expectancy.
For example, suppose a 55 year old gets diagnosed with alzheimer's. The doctor's say she has a life expectancy of at least 10 years.
She bought this policy with $500,000 of death benefit. The chronic illness benefit is the present value of the $500,000 death benefit.
The $500,000 death benefit isn't payable until she dies (which is projected to be 10 years from now).
Assuming the insurer expects to earn 4% on their money, the present value of $500,000 is only $337,000. If the insurer expects to earn 6% on their money, the present value of $500,000 is only $279,000.
If she'd bought $500,000 of LTC insurance (even with no inflation) she'd get $500,000 of LTC insurance benefits.
With an accelerated death benefit rider (in this case a "chronic illness rider") she'll be getting a lot less.
you tell me... which is better?
calculated the death benefit is
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I'm curious then....how do Protective, AIG, Pru (and others) market their 101g riders as $4$ reduction on the DB (guaranteed ledger).
I'll tell you why...you pay for it. The old "7702b vs 101g" test is seemingly being replaced by the "is your carrier charging you upfront for the rider" test.
The description that you just gave is much more appropriate to the "free" chronic illness riders and does not apply to all.
Please post a copy of the chronic illness rider from any of your preferred carriers and let's read it and see what it says.
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if they are uninsurable for LTCi then a Life policy with a CI rider is better than nothing. Just explain it accurately.
Run any of the carriers that I mentioned. They are dollar for dollar without a lien.
Your second part about this quote is also incorrect regarding several carriers. The 101g companies that charge for the riders also underwrite for LTC conditions.
So yes, you could get this coverage on the outline that you covered in an earlier post if you're uninsurable for LTC, but all of the carriers that have a dollar for dollar benefits underwrite for LTC issues as well so they won't allow the rider on someone uninsurable for LTC.
So some of the carriers do NOT calculate the death benefit as a "present value" when the chronic illness claim is made.
But MOST do!
Sadly, most agents don't seem to know the difference.
So is "MOST" more than 51%? I'm not trying to start an argument, but there are several GUL carriers that offer 101g riders with no liens and $4$ reductions.
And I agree that a number of agents don't know the difference.....but maybe not "most".
john.hennessey@
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Care Shield seems like a pretty good option to me. Unlike some "chronic illness" riders, there is no back-end, claim-time adjustment based on life expectancy to determine benefit levels and as indicated, no "permanent disability" requirement either. Benefit eligibility, as near as I can tell, is identical to LTCi but unlike LTCi, annual rates can NEVER be increased and also unlike traditional LTCi, benefits are guaranteed to be paid one way or another...and if a client just gets tired of the deal and want every nickel they put into it refunded, it will do that too. It's way easier to understand and explain than other hybrids. For the folks that aren't biting on the value proposition for traditional LTCi, I'm pretty sure at least some of them will like the simplicity of this plan as well as virtually everything being guaranteed.
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Not all chronic illness riders are the same. CareShield has none of the old nonsense that you're familiar with that others have. I wouldn't touch it with a ten foot pole either if it did!
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Your understanding of chronic illness riders is correct in some cases and not in others. I'm not an expert on 7702b or 101g but I'm virtually certain of this. I would encourage you to call them confirm this. In the case of MN Life's CS product, I know the full selected death benefit is available immediately for chronic illness and there is no adjustment ever based upon diagnosis or life expectancy. My understanding is there have been some changes in the regs or in the interpretation of them that provide for these changes. MN Life has also gotten rid of the LTC Rider on their Eclipse Protector VUL product and replaced it with this new, updated chronic illness rider. It is the same as the CareShield rider, which is built-in.
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Not all chronic illness riders are the same. CareShield has none of the old nonsense that you're familiar with that others have. I wouldn't touch it with a ten foot pole either if it did!
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Your understanding of chronic illness riders is correct in some cases and not in others. I'm not an expert on 7702b or 101g but I'm virtually certain of this. I would encourage you to call them confirm this. In the case of MN Life's CS product, I know the full selected death benefit is available immediately for chronic illness and there is no adjustment ever based upon diagnosis or life expectancy. My understanding is there have been some changes in the regs or in the interpretation of them that provide for these changes. MN Life has also gotten rid of the LTC Rider on their Eclipse Protector VUL product and replaced it with this new, updated chronic illness rider. It is the same as the CareShield rider, which is built-in.
it's good to hear that this product does not recalculate the death benefit when determining chronic illness benefit.
the biggest problem I have with these products is the cost.
A 50-ish year old female could buy about $250,000 for about $3,000 per year in premium. She could buy $250,000 of LTCi for about $1,600 per year in premium.
A married couple, both age 50, could share $500,000 of LTCi benefits for about $2,500 per year in premium. If each of them got only $250K of this product they'd spend almost 3x that amount and they would NOT be able to share benefits.
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