The present low interest rate environment is resulting in long term care insurance companies to make the decisions to increase pricing and to reduce risk on current hybrid long term care insurance products.
Over the past 12 months the 30 year Treasury yield has dropped from 3.0% to 1.30% These historic low 30 year Treasury rates are creating significant pricing pressure on insurance products that rely upon bond these 30 year yields to provide the policy guarantees.
Lincoln Moneyguard and Pacific Life PremierCare have just increased premiums by 20%-40% from last year.
The underwriters at Nationwide and at Securian will be increasing premiums in May and July respectively on their market leading cash indemnity policies, although the Nationwide and the Securian details are not announced yet.
Expected price increases with the Nationwide CareMatters II and with Securian SecureCare policies are expected to be 10-13%.
If you have been considering either of these 2 hybrid cash indemnity policies with Securian or with Nationwide you should definitely move forward with applications now.
The biggest news this month however is the OneAmerica Annuity Care II policy will be eliminating its best long term care insurance options and features. This isn't just a price increase. This is a retirement.
Effective April 25th, the OneAmerica Annuity Care II policy will no longer provide the option of buying either the 6 year or the 9 year LTC Benefits Continuation Rider. Only the 3 year LTC Rider will remain.
Also, the 5% compound inflation protection benefit option is being repriced much higher within this 3 year LTC COB rider on the OneAmerica Annuity Care II policy.
This news is huge!
Most policies do not afford you the ability to buy 9 years of coverage and to buy 5% compound inflation growth for affordable premium.
OneAmerica Annuity Care is the one hybrid LTC policy that always made 5% compound inflation protection available to you for inexpensive dollars. Now, however, this 5% compound inflation protection benefit is being repriced much higher. The current 30 year bond yields can not afford this benefit to be available any longer. On April 24th it goes away.
The OneAmerica Annuity Care II policy has always been one of the best long term care policies in the marketplace over the years.
Annuity Care II has consistently made my Mt. Rushmore of LTC policies.
Now however, the features that make this policy great - the 5% compound inflation protection option and the long term care benefit periods riders of 72 months (6 years) and 108 months (9 years) will no longer be available after April 24th.
The 5% compound inflation protection could allow you to obtain 10X leverage on your premium for your future long term care needs.
For example, if you are 65 years old and you deposit $150,000 into Annuity Care II with 5% compound inflation protection and the 108 Months LTC Rider, you will have $1,543,722 available for long term care at age 85. Your LTC rider will pay out $13,258 month to you for your care.
Here are examples of illustrations with 5% compound inflation protection.
To obtain these benefits within your policy before the elimination of these options, applications for the OneAmerica Annuity Care II policy must be signed and received by OneAmerica by Saturday April 24th!
If you have been considering re-positing premium into a long term care annuity to help plan for the costs of long term care now is the time to move forward.
We can complete your applications by phone in 10 minutes to lock in your application before the deadline.
Underwriting is a very easy process. The only requirement is a telephone interview lasting approximately 35 minutes.
I typically receive underwriting approval for my clients with the Annuity Care II applications within 5 days.
Also, if you have prior health conditions, it is not difficult to health qualify for the Annuity Care II policy.
To discuss your options please call me directly at (800) 891-5824. Or complete my quote request form.
Jack Lenenberg, J.D.
Licensed in all 50 States
NPN # 3524868