PRU and Transamerica

Protective has one that the income guarantee jumps to 10% of the income base if the owner goes into a nursing home. 

Transamerica doubles the guaranteed withdrawal benefit for LTC

If they’re taking 6% @ age 70, and go into LTC, then they get 12% for time they remain in LTC treatment.  I’ve used it on a couple of people who couldn’t qualify for the insurance.  1 year waiting period, and then elimination period of 180 days.  

[quote=gvf]Transamerica doubles the guaranteed withdrawal benefit for LTC

If they’re taking 6% @ age 70, and go into LTC, then they get 12% for time they remain in LTC treatment.  I’ve used it on a couple of people who couldn’t qualify for the insurance.  1 year waiting period, and then elimination period of 180 days.  
[/quote]

Is the withdrawal base the same as the accumulation value with TransAmerica?  Or is it a separate calculation?

the living benefits/ltc benefits are calculated on the Withdrawal Base.  Guaranteed % or the market returns.  During LTC they use the same calculation off the Withdrawal Base.  Only, instead of 5/6/7%, it looks like 10/12/14% (based on the age bands).  Obviously, you will run the Cash value to 0 pretty quickly in a bad/normal market. 

does that answer your question?

Does the Withdrawal base have a guaranteed growth % (separate from the contract value)?

If you need an annuity to sell LTC, then you shouldn’t sell LTC.

What if the client is uninsurable?

My situation is this:  Client has loads of money, doesn’t know if he will need LTC and wants a way to self-insure.  So, the LTC rider may be of use to him.

You may want to consider (if he’s insurable) a LTCi policy with a permanent LI policy (WL or GUL).  The permanent DB will replace any premiums paid into the LTCi policy if he never uses it.  If you use a WL policy, the CSV will be accessible if he changes his mind. 

He’s 54, has millions liquid and will inherit at least double what he has when his parents die.  No wife, no kids, no one.  Doesn’t have life insurance because there is no one to leave it to. 

He probably could, but why would he want to?  It is all about whether he’d want to pay wholesale or retail prices for LTC.  Fact is, I can’t predict where he’ll be financially if/when he needs to have LTC.  For all we know, he’ll have spent his money, taxes are higher than today, the market has hit him hard, or all three at the same time.  Why not buy the LTCi just in case the worst-case senario hits him? 

The client can’t self insure.  He can choose not to insure.  It’s not the same thing.   Does he care about leaving money behind at death?  If he doesn’t, there is no reason to buy coverage.  If he does, it will make sense, but with his assets, I’d go with life insurance over LTCi.

LTC is about leveraging the dollars.  Why pay $1 of your money for $1 worth of service if you can pay $.25 of your money to buy and additional $.75 of an insurance company’s money and use that for the $1 worth of service.  Smart people understand the risk/reward there. 

Just wanted to chime in again with the Life Insurance idea. Just had a client who should get some form of LTC. She’s got a lot of cash in CDs she doesn’t need (pension income is great). She can’t qualify for LTCI with her conditions, but she’ll likely pass a life insurance test with one of those LTC riders (looking at the John Hanc*** product, can’t remember the name right now). If she doesn’t use it, the kids have some more inheritance, which is fine by her.

“LTC is about leveraging the dollars.  Why pay $1 of your money for $1 worth of service if you can pay $.25 of your money to buy and additional $.75 of an insurance company’s money and use that for the $1 worth of service.  Smart people understand the risk/reward there.”