When it comes to most things in life cash is king. In the world of long-term care insurance a policy that utilizes a cash method of payment allows the insured to receive their monthly policy benefits without needing to justify when, where, how or by whom services are being provided. Once the policyholder qualifies for benefits (standard HIPAA benefit triggers) the policy pays a cash monthly benefit. The only problem with cash benefits is their cost; depending on the client’s age and other options purchased the pricing impact of choosing cash can double the premium.
Some may suggest that a cash option is so important that a client should reduce other benefits to fit the plan into their budget; reduce the daily benefit or benefit period or use a simple or 2X max compound inflation option. These solutions make me squeamish; while cash is easier to understand and explain running short or out of benefits pre-maturely may place a heavy burden on the insured and their family members emotionally, physically, financially or all of the above.
I think that Prudential has developed a better solution. Included in their LTC3 product is aCash Alternative Benefit. This feature gives the insured a choice to take 50% (in CA ‘ 40% if the policy is issued in other states) of their monthly long-term care benefit in cash in lieu of 100% on a reimbursement basis. The percentage of benefit (50% or 60%) not taken on a cash basis stays in the pool of money either for a future cash or reimbursement payment thus extending the pool of money beyond its original benefit period. This cash benefit is also payable outside the U.S so in countries where the cost-of-care is less, a 50% benefit might be sufficient. Isn’t it great when you can give clients this sort of flexibility at no additional cost’
The Cash Alternative Benefit makes Prudential LTC3 one of my current favorites in our portfolio of fine products. Generally, Prudential’s pricing is in the low to mid-range of the spectrum particularly when you take other product features into account such as a calendar day elimination period and monthly reimbursement. Additionally, the Prudential ESP multi-life program allows us to achieve significant underwriting concessions and premium discounts for business owners and their employees up to age 70, with as few as three employer paid lives. Add Prudential’s name recognition and financial strength into the picture and you have a great story to tell clients when discussing long-term care insurance.
Prudential is a sponsor of our upcoming Multiple Streams of Income continuing education and sales seminars coming-up on September 25th (Westlake Village, CA) and September 26th(Bel Air, CA). REGISTER TODAY as space is limited and we’re booking-up fast.