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Every Year, Millions of Seniors
Abandon a Life Insurance Policy
and Get Nothing in Return!

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A Long Term Care Benefit Converts Life Insurance into Monthly Payments Covering Any Form of Senior Care

Instead of lapsing or surrendering life insurance – a policy can be converted into an irrevocable Benefit Account that makes monthly payments on behalf of the individual receiving Senior Care. There are no wait periods; no care restrictions; no costs or obligations to apply; it is not a loan; and there is no need for premium payments.

A Long Term Care Benefit is flexible and can be adjusted to meet changes in Senior Care needs; it provides a funeral expense benefit; and any remaining account balance is paid to the family. After years of premium payments, many policy owners will allow a policy to lapse or surrender it for any remaining cash value. This is a big mistake when the same policy could be used to pay for the costs of Senior Care.


Any Life Insurance Policy Can be Converted to Pay for Senior Care Expenses

If a policy owner no longer needs, or can no longer afford their policy, and is considering letting it lapse or surrendering it for the remaining cash value, then converting it to a Long Term Care Benefit Plan is the answer.

Watch the Video to the Right (2:47) to Learn Exactly How the Process Works »

Here are Three Examples of Families That Converted Their Policies into a Long-Term Care Benefit Plan

Frequently Asked Questions About Long Term Care Benefit Plans

What is a Long Term Care Benefit Plan?

The Long Term Care Benefit Plan is the conversion of an in-force life insurance policy into a pre-funded, FDIC insured, irrevocable Benefit Account that is professionally administered with payments made monthly on behalf of the individual receiving care. It is a unique financial option for seniors because all health conditions are accepted, and there are no wait periods, no care limitations, no costs to apply, no requirement to be terminally ill, and there are no premium payments. Policy owners use their legal right to convert an in-force life insurance policy to enroll in the benefit plan, and are able to immediately direct payments to cover their senior housing and long term care costs.

Key Benefits of the Program Include:

  • Simple, no-cost application and review process
  • Quick approval and funding (no wait periods)
  • No age minimum
  • No premium payments
  • All types of in-force life insurance qualify
  • Monthly payments made directly to care provider/facility
  • Provides Funeral Expense benefit

Is the Long Term Care Benefit Plan a Long Term Care Insurance Policy?

Conversion of a life insurance policy into a Long Term Care Benefit Plan is not a long term care insurance policy, annuity, any form of hybrid life/LTCi policies, or an accelerated death benefit it is actually the private market exchange of a life insurance policy for a Pre-paid Benefit Plan at the time that care needs to be paid.

What Types of Life Insurance Qualify for Conversion into a Long Term Care Benefit Plan?

The conversion option applies to any form of life insurance: Universal, Whole, Term, and Group. The value of the conversion is based solely on the death benefit, and cash value is not a factor in determining the conversion value of a life insurance policy.

What Forms of Senior Care Qualify?

The Benefit Plan will pay the following monthly expenses directly to the health care provider:

  • Home Care (Private Duty/ Non-medical or Skilled Nursing)
  • Assisted Living
  • Nursing Home
  • Hospice Care

What Determines the Amount of the Monthly Benefit Payment?

The conversion value of a life policy to fund the Long Term Care Benefit is based on an actuarial calculation that factors the face amount (death benefit) of the life insurance policy, annual premium payments and the health care needs of the applicant. Once the conversion value is determined and the enrollment is complete, expenses will be paid monthly to the appropriate health care provider.

NOTE: Long Term Care Benefits are only eligible for direct payments to the health care providers. Payments will not be made directly to enrollee. A Benefit Plan participant will need some form of accepted Senior Care within 3 months from the time of application to qualify. For applicants with a longer time frame, policies should be kept in-force for a future conversion and can be reviewed when need to fund Senior Care has become more immediate.

Is There a Funeral Benefit?

Yes, all Benefit Accounts reserve 5% of the death benefit or $5,000, whichever is the lesser, to provide a funeral benefit payment to the Account’s named beneficiary.

Are There Any Fees or Obligations to Apply?

No, there are no application fees and no obligations to apply. Once a policy is converted by the owner, the Long Term Care Benefit payments begin immediately and the enrollee is relieved of any responsibility to pay any more premiums.

How Long Does the Enrollment Process Take?

The typical enrollment time is 30-60 days. The actual time to complete the process will vary on the applicant’s ability to provide the necessary requirements for review such as: signed application and authorizations, copy of life insur-ance policy, last two years of medical records, and offer/enrollment packet.

How Long do Long-Term Care Benefit Payments Last?

The average enrollment period will last between one and two years. The Benefit is adjustable so an enrollee can customize the monthly Benefit payments to best meet their changing health care needs. Each case is unique and enrollees work with their families, and possibly a financial or legal advisor, to create a Benefit sched-ule to best meet their monthly budgets.

What Happens if the Enrollee Dies Before All of the Long Term Care Benefit is Paid Out?

Should the enrollee pass away with additional funds remaining in their Benefit Account, the remaining balance is paid directly to the enrollee’s named beneficiaries. Enrollees and/or their beneficiaries are assured to receive the full Benefit amount even if the client dies before all monthly payments have been made.

Is the Enrollee Actually Transferring the Ownership of the Life Insurance Policy?

Yes, the enrollee will transfer all ownership and beneficiary rights to the life insurance policy to enroll in the Long Term Care Benefit Plan and will complete a life settlement working directly with a licensed Provider. From the moment the Benefit Plan is established, the Benefits Administrator will begin making monthly payments to the appropriate health care provider as well as all future premium payments on the life insurance policy. The enrollee is no longer responsible for premium payments and the policy is no longer considered an asset that will count against them for future Medicaid eligibility.

How is a Long Term Care Benefit Account Administered and Safeguarded?

The Benefit Plan is an irrevocable; FDIC insured account held by a nationally chartered Bank & Trust and then administered by a licensed, benefit administration company ensuring that the funds are protected and only used for the recipient of care. The account also has the added protection for the enrollee of paying any remaining balance to a named account beneficiary and/or providing a final expense benefit to help cover funeral expenses.

In Which States Can a Policy be Converted?

A life insurance policy owner has the legal property ownership right to convert their policy into a Long Term Care Benefit Plan in every state in America.

How Does Converting a Life Policy Impact an Enrollee’s Eligibility for Medicaid?

A life insurance policy is legally recognized as an asset of the policy owner and it counts against them when qualify-ing for Medicaid. If a policy has anything more than a minimal amount of cash value (usually in the range of $2,000) it must be liquidated and that money spent towards cost of care before the owner will qualify for Medicaid. All Medicaid applications specifically ask if the applicant owns life insurance and full policy details. Failure to disclose and comply is fraud.

Some states allow for a final expense policy to be kept or transferred to a funeral home (but the funeral home would keep the entire death benefit). Medicaid recovery units have become much more forceful about looking for life insurance policy death benefits (declared and undeclared) that have paid out to families after the death of a Medicaid recipient. Medicaid budgets are now facing extreme pressure and asset recovery efforts can be very aggressive. Recovering the entire cost of care against a retained life insurance policy through legal actions against the estate and surviving family by pursuing the death benefit through probate action is a federally mandated requirement.

The Long Term Care Benefit Plan is a qualified spend-down of the policy asset, as the proceeds in the form of an irrevo-cable, Benefit are paid to cover the costs of care until exhausted. A partial death benefit is preserved over this spend-down period and a final expense funeral pay-ment is also preserved. Once the Benefit has been spent-down, the enrollee would be able to apply for Medicaid without the life insurance asset counting against them.

Does the Policy Owner Get a Good Value with a Long Term Care Benefit Plan?

Seniors lapse or surrender a life insurance policy because they either can no longer afford premium payments or they are preparing for Medicaid eligibility and they abandon the policy because it is an unqualified asset that will count against them. For a policy owner looking for an alternative to abandoning their policy and accessing private-pay dollars for Senior Care; the option to convert their life insurance policy into a Long Term Care Benefit Plan will allow them to realize the true, fair market value of their policy and spend it down in a Medicaid compliant manner. As long as the individual remains private pay they can choose whichever form of long term care they desire and are not constrained to only receive Medicaid covered services.

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