With an aging population and the rising costs related to health aging issues, several studies consistently show that most Americans have no plan and little savings to properly address these issues. When recommending products for your clients with long-term care and chronic illness riders, details are everything. ?There have been many studies done on this subject, recently, the MillMan report, that details the 7702(B) rider sometimes called Long Term Care Riders or 101(g) often referred to as Chronic Illness Riders.
SilverSide Insurance Marketing has outlined quick points of CI and LTC and made some recommendations on what an agent might consider when placing these products in their portfolio.
First, it is important to understand the differences between LTC and CI. Generally speaking, if you want a simple, higher death benefit, less restrictive product, then a CI style may fit. Conversely if maximum leverage for health issues is the goal, LTC style designs will accomplish this goal. ?While both designs usually have tax advantaged benefits, the differences lie in the types of qualifying claims, ease of use, benefits, and how the riders are charged. As insurance professionals, it is our job to understand these differences and articulate them to you so you can offer your clients the best possible solution.
CI Quick Points:
- Almost all permanent life policies have some sort of Chronic, Critical or Terminal accelerated death benefit.
- Generally Chronic Illness benefits are from the existing death benefit, and do not create a separate pool of money. Most, if not all, life insurance products issued now have some sort of Chronic, Critical, or Terminal levels dedicated to the death benefit acceleration.
- The best Chronic Illness Riders will actually accelerate the death benefit based on easy triggers such as 2 of the 6 ADL requirements!
SilverSide Insurance Marketing recommends the CI Riders that are offered by Sagicor and EquiTrust on their Single Premium Life contracts. ?These CI Riders offer the richest benefits, are extremely useful and are simple and straightforward to sell.
LTC Quick Points (Specifically LTC Linked to a Life or Annuity Contract):
- LTC products tend to give higher leverage your money, but that pool of money is often more restrictive in how it can be used. Be sure to examine the entire rider in depth so you understand the terms of that particular product.
- While the richest Chronic Illness Riders tend to be cash benefits on easy triggers, LTC Riders tend to be more restrictive with reimbursement style benefits.
- For clients interested in maximum dollar leverage, and willing to work with a more complex and harder to use design, the LTC platform can fit.
SilverSide Insurance Marketing recommends Genworth?s TLC Product, One America/State Life?s Asset Care Series, and Lincoln?s MoneyGuard products.
You have to take care of your clients, so let us take care of you. If you are interested in learning more about these products or joining the SilverSide family, give us a call at 480.400.7171 or send us an email at Info@SilverSideInsurance.com.