If you’re interested in an Hybrid Asset Based Long Term Care Policy, For Fall-Winter 2020 we currently recommend NationWide CareMatters II or Securian SecureCare. Both are Cash Indemnity Plans, which pay you a monthly cash stipend that you can spend as you see fit. You can use this money on Care, building a ramp into your home, paying a relative or friend to take care of you, or even save it for a later date.
For a Joint (Spouse) Policy, One America Asset Care has a great product. Particularly if one person is in better health than their partner. In Addition, you can also use qualified funds (IRA, Pension, etc.) to fund this policy. One America Asset Care is the only product on the market to offer Unlimited LTC care option.
(Disclaimer: Our services to you are free, we are compensated by the carrier for our services)
If you have any questions or would like to see a personalized proposal feel free to call or email Cliff Marshall Here.
One America Asset Care Review
A.M. Best OneAmerica A+ (Superior)
Standard & Poors Rates AA-
By: Cliff Marshall
One America Asset Care offers a unique policy with several key advantages over conventional long term care policies.
As of August 2020 One America Asset Cares biggest strength is to function as a Joint Policy(spouse). So if you plan on combining you and your spouse coverage into one, continue on reading.
However if your interested in an individual asset based long term care policy Securian SecureCare and NationWide CareMatters II are currently the most competitive asset based plans as of August 2020.
If you would like to see a personalized One America Asset Care proposal, feel free to contact Cliff Marshall Here.
- How Does One America Asset Care Work?
- One America Asset Care Policy Options.
- Examples of One America Asset Care.
- One America Asset Care Compared to Nationwide CareMatters II.
- Funding Options (Single Premium, 10-Pay, 401k, 1035 exchange..etc.)
- What Qualifies as Care?
- Now What Happens if I never use my Asset Based Long Term Care?
- Are One Americas Asset Cares premiums and benefits guaranteed?
How does One Americas Asset Care Policy work?
Below we will breakdown a One America Asset Care example, using a single premium payment for simplicity.
Say you and your spouse purchase a joint policy and decide to fund it with $125,000 single payment. Immediately the long term care pool will be leveraged to $250,000. Now say assuming you choose the 2%(250k) a month benefit pay out per person. This will equate to $5,000 per person in long term care coverage a month, for a total of 50 months of payout coverage. So this immediately leverages your deposit for 2x for coverage.
One America Asset Care
You also have the option to add Asset Cares Unlimited Benefits Rider, which has two different choices:
- Double the Length of coverage, adding an additional 50 months for an additional for $850 a year premium.
- Unlimited Funds which come out to a guaranteed premium of $1,200 a year (onetime payment available for both options). So if you or your partner ever need long term care, you will have unlimited amount of funds to draw upon.
Here are the two Continuation of Benefits options are illustrated.
One America Asset Care
Policy Riders and Options for One America Asset Care
One America Asset Care Plus Continuation Benefits rider: One America/State Life’s answer to a limited benefit period is the Continuation of Benefits Rider (COB). This is an option that you can add to either extend the benefits for an equal amount of time as the base policy (assume your base plan is 33 months and you extend it for an additional 33 months for a total of 66 months) or you can make it a lifetime benefit. The One America Asset Care policy is currently the only plan that allows for a lifetime benefit. You can pay the COB by either a single premium or over a 5 year, 10 year, 20 year or age 95 period. By adding the COB rider you are adding additional protection to protect an estate you have built over a lifetime.
Asset Care Inflation Protection Rider (IPR): Is a great way for clients to protect against the raising cost of qualifying long term care expenses. You have the option of a 3% or 5% compounding rider. Premiums can be paid up front or with annual installments.
Joint Life Option: One of the most distinguished benefits to the Asset Care policies is the joint life option. You and your partner can have a single policy covering both of your long term care needs. No other carrier provides a joint long term care policy and the One America Asset Care can do just that.
Waiver Of Premium: This is a feature that is built into the One America Asset Care plan. For example, if you signed up on a 10 pay plan and in year 6 you need to go into a facility, then the premiums are waived while you are receiving care and they are also waived if you have a joint policy and one of the insured’s is receiving care. If in a year you no longer are receiving care then the premiums start back up and you are still finished after 10 years and the missed premiums are not added to your payment years.
One America Asset Care Example
- 10 Year Pay
- Joint Policy-Male 60-Female 57
- 3% Inflation Rider
- Continuation of Benefits for an additional 33 Months
One America Asset Care
The annual premium of $23,076 covers both of you. Upon payment of the first premium the face amount and long term care pool is immediately available for long term care purposes for $6000 a month per person. That provides an initial 33 months of total coverage. Once the original $200,000 is depleted, the continuation of benefits starts and extends it an additional 33 months.
As time goes and the longer you have not used benefits the policy continues to grow its pool of LTC available funds on a 3% compounding basis.
One America Asset Care
As we can see in year 10 after the final pay the long term care pool available is $521,912, with the monthly benefit amount of $7,829.
If you would like to see a personalized proposal through a screen share, email, or phone call. Contact Us Here.
What are One America Asset Care Funding Options?
Single Premium Deposit which allows you to roll in a amount that can immediately be leveraged to 3-4 times for qualified long term care needs.
Multiple Year Premium, We can also set it up to be paid over a 5,10, and 20 year period or until age 95. It does not matter which payment option you use, the premiums and benefits are all guaranteed unlike a traditional plan.
Qualified Money, This Plan has the ability to use any type of qualified money which includes IRA’s, Pension Plans, 401(K) and 403(B). This also includes any fixed or variable annuities that you might have. The money is moved to One America Asset Care, and the distributions are taken internally over a 10 year period to fund the life policy that is then used in the event Long Term Care.
One of the ways we are seeing clients fund these types of plans is by using existing cash value life insurance policy’s. A lot of clients might not need as much life insurance as before and at times those policies might have significant cash values and maybe even a taxable gain. We can do a 1035 exchange as allowed under IRS guidelines and avoid taxation on that gain, while at the same time fund a guaranteed Long Term Care plan.
One other example on funding. In a recent client review with a 64 year old physician client, the discussion about his disability coverage came up. He had two different policies through our office, and had built up some assets and was getting closer to retirement. The current disability plans, even if he had to file a claim, would only pay for two years. He decided to use those funds to supplement the funding of his Long Term Care plan and solve a potential need for the later years.
What Qualifies as Care?
With the One America Asset Care plan, after a 90 day elimination period (0 days for Home Health Care) you can choose to have the base benefit paid over a 33 month benefit period or a 50 month benefit period. These benefits can be apply towards
- Assisted living
- Nursing facility
- Home health care.
- Bed reservation
- Care coordination
- Caregiver training
- Supportive equipment
- Adult day care
The amount of the benefit being paid on a monthly basis is based on the size of the policy.
Now What Happens if I never use my Asset Based Long Term Care?
As mentioned above, conventional long term care policies have premiums that are not guaranteed, and provide coverage as long as you continue to pay the premiums. Back in the early to mid 2000’s the insurance companies realized that they had a big upcoming problem. They did not initially price the plans properly and the lapse ratios were not what they were projecting and they were forced to raise rates on policies and this pushed premiums up to the point that was no longer affordable for most people ,which forced them to lapse their policies after many years of paying into them. They never received their premium back, and never used the benefits.
With the One America Asset Care, all of the shortcomings of conventional long term care are taken care of.
- Return of Premium features if never used
- Benefit Guarantees
- Premium Guarantees
- Cash Value Growth
If at some point you decide you no longer need the coverage for whatever reason, you can surrender the policy for whatever the cash surrender value is at that time. If you never use your benefits and pass away, there is a death benefit that is paid to your beneficiaries.
I hear a lot of clients say “well I will just self insure”, and in my opinion that is the exact opposite of the strategic thing to do. Why not use a plan like this to leverage your assets for 2x their initial value. The way we see it is, tails you win, heads you tie. Your money is growing, your Long Term Care needs are covered, and you have the added security of leaving behind a legacy. Not only this, but long term care insurance is one of the only ways protect your estate from increasing costs of health and medical care.
Are One Americas Asset Cares premiums and benefits guaranteed?
One of the most distinguished features about One America Asset Care are the guaranteed premiums. Just thirty years ago, almost every company offered some type of long term care insurance, now we are down to just a handful.
Of the companies left that offer what is considered conventional/traditional long term care insurance, none of them offer guaranteed premiums.
I am sure either you or someone you know has gone through the painful process of getting rate increases on their traditional plans.
You are either forced to pay the increase in premium or reduce your coverage benefit to keep the premium the same.
If you would like to see a personalized One America Asset Care proposals feel free to contact Cliff Marshall Here.
If you would like to learn more about other long term care options, here are some of my other product reviews Securian SecureCare, Lincoln MoneyGuard III, NationWide CareMatters II, Brighthouse SmartCare, MassMutual CareChoice One, One America Asset Care, Mutual of Omaha, American General Quality of Life.