Long Term Care Rider

A typical LTC Rider is an acceleration vehicle. When an insured becomes chronically ill, the insurance company starts paying part out of the death benefit, typically according to a schedule. Certain rules must be followed if the benefits are to be considered tax-free, but they are definitely not onerous.

The LTC rider life package has been particularly well received by women, although there is no reason why men shouldn't buy the vehicle as well. The rider is purchased as part of a wealth transfer life insurance sale. The LTC Rider provides the means to receive long term care benefits should they be necessary. To the extent the funds are not needed, the proceeds are passed on to heirs. This product eliminates the "use it or lose it" dilemma associated with standalone policies.

Actuarial Strategies offers comprehensive design develop, pricing and filing services for this offering and supports either the development of a claims unit or the establishment of a TPA relationship.

A large percentage of such sales is single premium, although several carriers offer flexible pay versions.

• The death benefits grow with performance, and lead to higher LTC benefits.
• Lock-in provision at time of claim. Unfavorable investment performance cannot reduce benefit payments, both life and LTC.
• Modest LTC incremental cost.
• Simplified product structure. Implementation is much simpler.
• The LTC RIder provides essentially the same benefits as a standalone vehicle. No benefit compromises!
• Claims can be easily handled by a TPA. Potential vehicle for insurers without standalone portfolio. No need to build a large claims unit.
• An opportunity to penetrate an unsaturated market segment