What is a
Long-Term Care Life Settlements are unique. The Funder converts part of the policy’s death benefit to an FDIC-insured Long-Term Care Benefit Account. The Account’s FDIC-approved Trustee pays for all forms of licensed Long-Term Care. If the Insured dies before exhausting the Account, its remainder would be paid to the beneficiary. There is a separate Final Expense Benefit. The transaction is Medicaid-compliant and tax-exempt.
Program Overview
Insureds of any age may qualify if they are now receiving some form of licensed Long-Term Care or may need some within 90 days.
The policy is sold, the Funder pays premiums, and creates a Long-Term Care Benefit Account with part of the death benefit. The Policy Owner never receives any Settlement money that could be used for any purposes, unlike all the other Programs. Licensed Long-Term Care Health Providers are paid by an FDIC-approved Trustee. The named beneficiary receives any Account balance after the Insured’s death. There will always be a separate Final Expense Benefit even if the Account has been exhausted.
This is the only Program that will work with policies as small as $10,000.
The Policy Owner may choose any licensed Health Care Provider for all forms of Long-Term Care including In-Home Nursing/Health Care, Assisted Living, Alzheimer’s/Memory Care, Skilled Nursing Facility Care, and Hospice Care.
Depending on case factors including health, age, type and size of policy, and gender, we may seek quotes for some or all of the other Programs: Life Settlements, Retained Benefit Life Settlements, Viatical Settlements, Private Policy Loan, and Accelerated Death Benefits.
Long-Term Care Life Settlement
| Features | |
|---|---|
| Must be receiving or need Long-Term care in 90 days | Yes |
| Minimum Death Benefit | $10,000 |
| Maximum death benefit of policy | $1,000,000 |
| Minimum Age | No minimum age |
| Longest probable lifespan | No maximum lifespan |
| Medicaid Compliant | Yes |
| Tax Status of Sale | Tax-exempt |
Long-Term Care Life Settlement
Are Long-Term Care Life Settlement payouts comparable to those of other non-terminal programs?
The Long-Term Care Life Settlement’s Account is sometimes larger than the total cash payout of two other programs for Insureds who are not terminally ill: Life Settlements and Retained Benefit Life Settlements. In fact, some cases only receive LTC offers.
Could a “Snowbird” receive Long-Term Care benefits in another state and return home without losing benefits?
Yes, a “Snowbird” could go “where the weather suits your clothes” and return home without losing benefits. The larger point is that any Insured may move to another state part-time or permanently. The LTC Benefit Account Trustee pays a level monthly amount to the licensed LTC Provider based on input from the Policy Owner. The Provider may be changed as can the level amount.
Are there any limits to the monthly LTC payments?
The monthly payments are agreed upon by the Policy Owner and the Funder. The Policy Owner can change the amounts based on changes in Provider fees or the level of care required by the Insured.
How are the monthly LTC payments calculated?
The Funder works closely with the Policy Owner regarding the cost of licensed Long-Term Care. An agreeable monthly amount is set and may be modified as the type or cost of Long-Term Care changes.
Is there an Elimination Period before LTC payments will begin?
The Account Trustee can begin making payments without delay because there is no Elimination Period as with Long-Term Care policies.
If there is money in the Account when the Insured dies, does it go to the beneficiary?
The beneficiary receives any money remaining in the Account when the Insured dies.
Is there a Funeral Expense benefit even if the Account funds have been exhausted?
There will always be a Funeral Expense benefit paid to the beneficiary. It is the lesser of $5,000 or 5% of the policy’s death benefit.
How is the Funeral Expense benefit calculated?
The Funeral Benefit is the lesser of $5,000 or 5% of the death benefit of the policy.
What happens if the Insured is still living when the Account is used up?
Payments will end when the Account hits zero. There will always be a Funeral Benefit regardless of how long the Insured lives. The Funeral Benefit is the lesser of $5,000 or 5% of the policy’s death benefit.
What are the main differences between the Long-Term Care Life Settlement and the 5 other Programs?
Unlike the 5 other Programs, the Policy Owner does not receive any immediate cash. There are no minimum or maximum age limits. The smallest acceptable policy is $10,000 while $50,000 is the minimum for Viatical Settlements and $100,000 for Life Settlements and Retained Benefit Life Settlements. Note: There are no age or policy size limits for Accelerated Death Benefits.
What are the primary forms of licensed Long-Term Care paid by the Long-Term Care Life Settlement Benefit Account?
Every variety of licensed Long-Term Care may be paid. The main ones are In-Home Nursing/Health Care, Assisted Living, Alzheimer’s/Memory Care, Skilled Nursing Facility, and Hospice care.
Could Long-Term Care Health Providers be fired and new ones hired?
The Policy Owner has the ability to change Providers as desired. The Trustee would need to know the name and contact information of the new Provider and when the change is to take place.
Are there any restrictions as to the choice of Long-Term Care Providers?
The Long-Term Care Provider must have an active license to conduct its business within the state where the Insured is receiving services.
What if the Insured begins with one kind of Long-Term Care and then needs a different form?
The Insured may receive benefits for any kind of licensed Long-Term Care and change to another kind as needed. For example, the Insured initially begins receiving Home Health Care but in time must transfer to a Skilled Nursing Facility.
If the Insured has just qualified for an Accelerated Death Benefit or may do so soon, would the Long-Term Care Life Settlement be another option for the balance of the policy?
Since the Accelerated Death Benefit requires a lifespan of 6 to perhaps 12 months, the Insured may already be receiving some form of Long-Term Care or may need some at any time. If there is at least $10,000 of net death benefit after utilizing the Accelerated Death Benefit, this tax-exempt LTC option could be very timely.
Is there any conflict with Long-Term Care policies?
The Long-Term Care Life Settlement’s Benefit Account has no interaction with carriers offering Long-Term Care benefits from LTC policies or life policies with LTC features.
Is there any Coordination of Benefits if a Long-Term Care policy is making some payments?
The Funder and Account Trustee are not involved with Coordination of Benefits. Rather than run the risk of overpaying the Provider, the Account Trustee can pay into a special account authorized by the Policy Owner on behalf of the Insured.
Is it possible to have the monthly LTC payments sent to a special account on behalf of the Insured instead of the licensed Provider of Long-Term Care?
The Policy Owner may request that the Account Trustee sends checks to a special account dedicated to paying the Provider.
What does Medicaid compliant mean?
The Account created by part of the policy’s death benefit is a Medicaid qualified spend-down of the policy and allows a Funeral Expense benefit even if the Account has been used up. This means the Insured retains Medicaid eligibility regardless of policy size.
What if Medicaid eligibility is not important to the Insured?
If receiving cash is more important than remaining eligible for Medicaid, a Life Settlement or a Retained Death Benefit Life Settlement might be more appropriate.
Does the Insured retain Medicaid eligibility?
Yes. This is the only program that guarantees Medicaid eligibility.
