An In-depth Look At Crucial Factors Of Long Term Insurance

Policies may offer an extension of benefits rider so that they'll continue to pay, up to a certain amount, if a holder spends through their death benefit while receiving long-term care. Sales commissions generally are about 8 percent of the up- front premium, said Ryan, the broker. “It's a more ‘affordable' way for certain people to add long-term care onto their policies,” said David O'Leary, executive vice president and head of the financial protection division of Axa Equitable Life Insurance Co., a unit of Paris- based Axa SA. For a 60-year-old New York man who doesn't smoke, putting $100,000 upfront into a Lincoln MoneyGuard Reserve policy would translate into maximum monthly benefits of about $5,000 a month for at least 6 years for a policy with an automatic 5 percent inflation adjustment after the first two years of benefits, according to a quote obtained by Ryan and confirmed with the company. The first $119,460 spent on long-term-care would draw down the policy's guaranteed death benefit, after which the holder would have an extension of benefits of $238,920 or more to spend if he remained in long-term care, according to the quote. “You have to put up a pretty sizeable amount of cash in order to get a long-term-care benefit that's meaningful,” said John Sherman, president of the Cincinnati-based LTC Experts, a long-term-care insurance broker. The health-care law President Barack Obama signed in March 2010 created a program that will pay a daily cash benefit that averages $50 or more to those who can no longer care for themselves, for workers who enroll in and contribute to the program. Details of the plan, called the Class Act, such as the cost of premiums for workers who enroll, haven't been released, said Lauren Shaham, spokeswoman for LeadingAge. In April Senator John Thune, a Republican from South Dakota, and Senator Lindsey Graham, a Republican from South Carolina, introduced a bill that would repeal the Class Act.

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