Tax Deductability of Life/ltc Combo Products

[scagnt83]

If you do need care, your money is used first. The deposit you put in is used first. So, the single-pay premium deposit (or the annual premiums paid in that build the cash value) are AT RISK.

I think a traditional LTCi policy that GUARANTEES the full refund of ALL the premiums to the heirs is a much better deal for the client.

If they need care, all their premiums are refunded to their heirs.
If they don't need care, all their premiums are refunded to their heirs.

If they need care, they get rich benefits, increasing with the inflation benefit, rather than the much lower benefits in the "LTC Riders" on the life policies.

And, if they live in one of the 31 DRA LTC Partnership states, they get partnership asset protection as well.

Often times the clients that these are suited for are of a higher net worth and have a good amount of spendable assets to assist in their LTC need. This is just some extra assistance if the need may arise.
And the rop rider on the LTC policy will not account for inflation, the DB on the LI policy will. So if a client is looking to hedge the cost of LTC while still being able to leave a legacy with that money if LTC is not needed; the rider on the Hancock policy is not a bad way to go..

Im not a huge fan of the LTC riders on life policies, but I am a big fan of the LTC/LI single pay combo products such as LFG money guard or JH lifecare. But I have sold both.

 

[Rollem]

You do need to be careful when talking about the Partnership program. I too live in Ohio, sold a stand alone Hancock LTCi policy a couple months back. As I used the "partnership policy" as a selling point, I tried to get that in writing for my clients, but could not. Unless it is finalized, JH had filed with the state, but not approved at that point. I know GE is approved in Ohio. The weird thing is that I had colleagues who took their LTC Partnership cert. through a JH sponsored class.
I'm pretty sure they will be partnership approved(as long as inflation rider is added), but as of a couple months ago, they were not.

Let me know, I haven't quoted JH since.

 

[Mr_Ed]

And the rop rider on the LTC policy will not account for inflation, the DB on the LI policy will. So if a client is looking to hedge the cost of LTC while still being able to leave a legacy with that money if LTC is not needed; the rider on the Hancock policy is not a bad way to go..

Im not a huge fan of the LTC riders on life policies, but I am a big fan of the LTC/LI single pay combo products such as LFG money guard or JH lifecare. But I have sold both.

It is true that the refund of premium is not indexed for inflation. But, it is safe.

The single premium deposited into the LTC/Life combo products is at risk. And the growth rate is minimal.

Additionally, the death benefit will be included in the estate. Subtract estate taxes and the net death benefit is even lower.

Scott A. Olson