The long-term care rider from Nationwide

Transcription

1 for Broker/Dealer use only Not for USE with the public The long-term care rider from Nationwide Don t be fooled not all long-term care (LTC) coverage is the same. In fact, some policies and riders can be so complex and restrictive that your clients end up with more hassle and less control than they bargained for. A permanent life insurance policy from Nationwide with the long-term care rider can help you simplify their decision by providing the life insurance they need at the same time you provide supplementary long-term care coverage. Indemnity versus reimbursement If your clients are interested in combining life insurance and LTC benefits, you should explain the difference between indemnity and reimbursement plans. Many, if not most, LTC riders and standalone policies are reimbursement plans. With a reimbursement plan, the policyowner submits bills to the insurance carrier, who then reimburses the exact amount of the bill up to the amount of benefit the insured qualifies for. Nationwide s LTC benefit is an indemnity not a reimbursement plan, which means: Payment is made directly to the policyowner No bills need to be submitted The payment is tax free and sent on a monthly basis Policyowners may choose to take the full amount of benefit they qualify for even if the insureds LTC bills are less than their benefit amount The rider has an additional cost, may not be available in all states, and may be known by different names in different states. Taking care of tax management, so your clients don t have to In addition to the convenience of the indemnity feature, Nationwide provides better tax management for your clients: The maximum monthly payment is the lesser of 2% of the LTC specified amount or the current HIPAA per diem rate ($290 a day in 2010) Assuming that there is no additional LTC policy benefit owned, there s no possibility of exceeding the tax-free limits set by law, so payment of the LTC benefit cannot create a taxable event If your client is collecting LTC benefits from another company in addition to benefits from Nationwide, the total benefits that can be received tax free is the greater of the daily HIPAA or actual costs incurred. Any excess amount will be taxed as ordinary income. Neither Nationwide nor its representatives give tax advice. Your clients should consult their attorney or tax advisor. Keep in mind that as an acceleration of the death benefit, the LTC rider payout will reduce both the death benefit and cash surrender values. Care should be taken to make sure that your clients life insurance needs continue to be met even if the rider pays out in full. There is no guarantee that the rider will cover the entire cost for all of the insured s long-term care as these vary with the needs of each insured. Putting them in control With the LTC rider from Nationwide, clients also maintain control of the amount of the payment and enjoy a high degree of flexibility: Clients choose how much of the monthly benefit is received, up to the benefit maximum The payment can be used for any purpose the policyowner sees fit, as long as the insured is receiving care from a licensed caretaker under a physician s plan of care Policyowners may choose to receive less of the LTC benefit than they are eligible for to preserve their policy, effectively stretching the LTC coverage period The structure and benefits offered by the LTC rider, combined with permanent life insurance from Nationwide, make helping your clients plan for their future easier than ever! Professional advice at your fingertips Caring for yourself or a loved one can be a real challenge in the face of a medical need or even an emergency situation. Frequently, the need for LTC services arises suddenly. When the going gets tough, how do your clients find information from reliable sources and find it quickly? That s what the Nationwide Care Guide Network is all about. It s designed to be a source of information exactly when your clients need it. Whether the need is for simple household services, home care or relocation services, the Nationwide Care Guide Network has the answers to a whole list of questions and concerns, including, but not limited to, the following: Home care and housing options Medical and medication issues Problem prevention and legal resources services Fun activities and recreation Mental health and Alzheimer s care Safety and adaptive equipment Financial help Transportation Meal and nutrition Caregiver support Adult day care End-of-life care Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value This brochure alone does not constitute full due diligence in offering solutions to your clients.

2 Competitor reality check Product name Long-term care rider Tax qualified status Benefit type Benefit amount Section 7702 (B) of the IRC LTC Section 101 ((g) (5)) of the IRC Accelerated Death Benefit Indemnity style Benefit paid is the lesser of 2% per month of the LTC specified amount and the HIPAA per diem amount, on a monthly basis; total benefit chosen may be up to 100% of specified amount Issue ages Inflation protection No, increase tied to any applicable increase in the HIPAA per diem amount Benefit triggers Is dependent on not being able to perform two of six activities of daily living; or Coverage Adult day care center Assisted care Home health care Hospice care Intermediate care Skilled nursing home care Elimination period Recertification Lifetime elimination period 90 days over a 730-day period Reserve the right on a case-by-case basis; paid by Nationwide Lapse protection Claims outside Residual death benefit Bed reservation We may pay benefits outside the if the physician assessment and care services are consistent with those in the, 10% of policy specified amount (not available in NY, KY or VI), benefits can be used in this manner Extension of benefits No Referral services, Nationwide Care Guide Network 1 1 Now available on all 2001 CSO products Nationwide YourLife No-Lapse Guarantee UL, Nationwide YourLife Accumulation VUL, Nationwide YourLife Protection VUL and all future 2001 CSO products. 2 Hartford may not market their rider as long-term care.

3 John Hancock Hartford Lincoln Long-Term Care (LTC) rider and Long- Term Care (LTC) Continuation rider Section 7702 (B) of the IRC LTC Section 101 (g) of the IRC Accelerated Death Benefit LifeAccess Accelerated Benefit rider Section 101 (g) of the IRC 2 Accelerated Benefit MoneyGuard Reserve Reimbursement Indemnity style Reimbursement 1%, 2% or 4% (maximum of $50,000 per month) of the total benefit pool available monthly Benefit equals the lesser of (1) the lifetime benefit amount as of the start of the initial benefit period multiplied by 2%; (2) the monthly equivalent of the HIPAA per diem amount; and (3) amount allowable under acceleration death benefit regulations of the IRC No Unable to perform two of six activities of daily living; or No, increase tied to the lesser of any applicable increase in the HIPAA per diem amount or 4% daily benefit compound rate (minimum 0%, maximum 10%) Unable to perform two of six activities of daily living; or Must be a non-recoverable condition Care or facility types not specified, but benefit may only be collected for a non-recoverable condition Section 7702 (B) of the IRC LTC Base: two years or three years acceleration of the benefit limit; benefit limit equal to specified amount of coverage at issue; maximum amount $500,000 for two years and $750,000 for three years, compound or simple Chronically ill individual unable to perform two of six activities of daily living Adult day care center Assisted care Home health care Hospice care Assisted living Nursing home Adult day care center Home health care Intermediate care Respite care Skilled nursing care 100 days (unlimited time period) 90 days 90 days (unlimited time period) No, annually at insured s expense, at least annually by physician Not applicable must be a non-recoverable cause ; nursing home care only (except in ME, NJ, NY, TX, PA); only on LTC Continuation rider with a maximum limit of $25,000 No No No Only available if LTC Continuation rider rider is elected, as long as required premiums continued to be paid, 10% of policy specified amount, up to 10 days per stay, benefits can be used in this manner, 1/30th of the monthly maximum benefit for each day the bed is reserved (30 days per year), doubles the duration and benefit amount No Senior Link and Advantage List No No, 2 yr., 4 yr. Every effort has been made to present accurate information, but keep in mind that only the prospectuses, contract pages and/or individual policies from each of the companies represented contain the complete details of each policy and rider discussed.

4 Positioning points vs. John Hancock Benefit type Consultative service for seniors Residual death benefit Benefits provided outside Availability Lapse protection guarantee while on claim Multiple claims Indemnity style tax-free benefits are paid directly to the insured without requiring bills or receipts Nationwide Care Guide Network offers additional consultative services for seniors related to LTC needs; service extends to policyholder, siblings, parents, grandparents, spouse Service also includes parents-in-law and adult children 10% death benefit, less any withdrawals and loans, if the entire death benefit has been paid out in LTC claims (excludes NY, KY) Under proper guidelines, the insured can receive LTC benefit outside the LTC rider is available after issue; cost of insurance for the rider will be charged and additional underwriting is required Nationwide provision applies when in a nursing home, home health care or assisted living facility Nationwide does not recalculate LTC benefit for multiple claims John Hancock Reimbursement plan LTC benefit payments are sent directly to the LTC provider only when receipts and bills submitted by the insured John Hancock s Senior Link extends only to policyholder, siblings, parents, grandparents and spouse John Hancock only includes a residual death benefit if LTC Continuation rider is included LTC rider rider excludes benefits for LTC services outside the John Hancock s rider is available only at issue John Hancock provision available only if owner and insured are the same person Provision available while receiving benefits in a nursing home (exceptions: ME, NJ, NY, TX, PA) John Hancock does not recalculate LTC benefit for multiple claims Issue classes Nationwide will offer the rider with our Table Shave Program and through rated cases up to Table E John Hancock will allow up to Table C (175%) on base insured

5 Positioning points vs. Hartford Consultative service for seniors Residual death benefit Recertification Benefits provided outside Availability Investment restrictions Multiple claims Nationwide Care Guide Network offers additional consultative services for seniors related to LTC needs; service extends to policyholder, siblings, parents, grandparents, spouse Service also includes parents-in-law and adult children 10% death benefit, less any withdrawals and loans, if the entire death benefit has been paid out in LTC claims (excludes NY, KY) Nationwide reserves the right to recertify and cost will be paid by Nationwide Under proper guidelines, the insured can receive LTC benefit outside the LTC rider is available after issue; cost of insurance for the rider will be charged and additional underwriting is required With Nationwide, no investment restrictions while receiving benefit Nationwide s product can be used for numerous claims Hartford Hartford does not offer Hartford does not offer a residual death benefit Hartford requires annual recertification at insured s expense LifeAccess rider excludes benefits for LTC services outside the LifeAccess rider is available at issue only Hartford may restrict certain subaccounts while receiving benefit Hartford s rider is intended to be used for nonrecoverable claims

6 Positioning points vs. Lincoln Benefit type Death benefit vs. LTC benefit Consultative services for seniors Recertification Benefits provided outside United States Death benefit to beneficiary Availability Indemnity style tax-free benefits are paid directly to the insured without requiring bills or receipts Nationwide can generally offer more death benefit than LTC benefit to the insured; whereas Lincoln, with their extension of benefits provision, provide a greater LTC benefit than death benefit Nationwide Care Guide Network offers additional consultative services for seniors related to LTC needs; service extends to policyholder, siblings, parents, grandparents, spouse Service also includes parents-in law and adult children Nationwide reserves the right to recertify and cost will be paid by Nationwide Under proper guidelines, the insured can receive LTC benefit outside the The LTC rider does not separate the death benefit from the LTC benefit; the remaining death benefit/ltc benefit is paid to the beneficiary upon death of the insured LTC rider is available after issue; cost of insurance for the rider will be charged and additional underwriting is required Lincoln Reimbursement plan LTC benefit payments are sent directly to the LTC provider only when receipts and bills submitted by the insured MoneyGuard limits maximum death benefit to either $500,000 or $750,000 at issue Lincoln does not offer Lincoln requires annual recertification by a physician Lincoln excludes benefits for LTC services outside the Lincoln separates the LTC benefit from the life insurance benefit; when benefits are paid out, the life insurance component is first to be used; thus it is possible that remaining LTC benefits will not be paid to the beneficiary, leaving only a residual death benefit MoneyGuard (LTC portion) is only available at issue As your clients personal situations change (i.e., marriage, birth of a child or job promotion), so will their life insurance needs. Care should be taken to ensure these strategies and products are suitable for long-term life insurance needs. You should weigh your clients objectives, time horizon and risk tolerance as well as any associated costs before investing. Also, be aware that market volatility can lead to the possibility of the need for additional premium in the policy. Variable life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, underlying fund charges and expenses, and additional charges for riders that customize a policy to fit your clients individual needs. Sources: John Hancock, (downloaded 2/17/2010). Hartford, (downloaded 2/17/2010). AXA, axa-equitable.com/ (downloaded 2/17/2010). All competitive information is believed current as of February All information presented is deemed reliable but its completeness and accuracy cannot be guaranteed. Many factors affect the characteristics of the products shown here. It's possible that there are differences between the products compared which are not reflected and/or of which we are unaware. Life insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio. The general distributor for any variable life policy with the long-term care rider is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation. Nationwide, Nationwide Financial, the Nationwide framemark, Nationwide YourLife, Nationwide Care Guide Network and On Your Side are service marks of Nationwide Mutual Insurance Company , 2010 Nationwide Financial Services, Inc. All rights reserved. LAM-0649AO.3 (03/10)