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Feb 12, 2015 • Debra Debreczenyi

10-Pay Long-Term Care Insurance - comparing the options


How would you like to pay long-term care insurance premiums for just 10 years and be done (while the benefit continues to increase)?  Recently, I was asked by an advisor to assist one of his clients who was interested in 10-pay plans because their parents had bought plans and were happy with their choice.

For those who can afford it, limited pay LTC plans can be very appealing. Once offered by many long-term care carriers, now just a couple of companies offer standalone limited pay plans.  However, linked Life/LTC carriers are branching out from single pay plans to options such as 10-pay products.

Here's a real life comparison of standalone and linked life/ltc plans with 10-pays.  These are actual premium numbers, with the names of the carriers withheld.


Mr Client: Age 40 Mrs. Client: Age 40.  State: Georgia

Plan Benefits

Carrier 1 Carrier 2 Carrier 3 Carrier 4
Type of Product Standalone LTCi Standalone LTCi Linked Life/ltc Linked Life/LTC
Initial Monthly LTC Benefit $6,000 $6,000 $6,000 $6,000
Automatic Inflation Rider 3% compound 3% compound 3% simple 3% compound
Monthly Benefit Age 80 $19,002 $19,002 $13,020 $19,572
Total LTC Benefit Pool at Age 80 $912,104 $912,104 $637,920 $912,104
Life Insurance Benefit None None $144,000 $144,000
Annual Premium Mr. $3,810 $5,328 $8,416 $7,852
Annual Premium Mrs. $3,765 $8,798 $7,502 $8,461

What should the client do?  Here are some thoughts:

  1. If they are a business owner of a C-corporation, they can deduct the entire premium of standalone coverage.  Corporations can also "carve out" groups of executives.  In this case, standalone coverage will be tough to beat.
  2. Carrier 1 offers unisex pricing while most carriers have gender based premiums.
  3. Carrier 3 offers an idemnity or cash LTC benefit - for great flexibility at claim time.
  4. The premiums for the linked life/ltc products are guaranteed, which the LTC products could be subject to a rate increase - but only during the 10 year premium pay period.

Regardless of the choice, the premiums don't come cheap.  However, the peace of mind of owning a fully paid up LTC policy with almost a million dollars in available benefits can be appealing!   

Debra Debreczenyi

Written by Debra Debreczenyi

Debra Debreczenyi joined LTCI partners in 2011 as a sales consultant. She assists financial advisors in the LTCi sale, providing carrier and product information, handling underwriting prescreens, and sending quotes, sales ideas and marketing materials. Debra has worked in the insurance industry for more than 20 years and has extensive knowledge of both individual and group long term care, life and health insurance. She has held positions in both the brokerage agency and corporate home office environments as an underwriter, account manager, sales representative, in customer service and administration. Debra attended Harper College and American Academy of Art and enjoys hiking, biking, weight training, swimming and the outdoors.
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