Hybrid: Universal Life with LTC Benefits
Single-premium asset-based Long Term Care funding solutions
Hybrid or Linked-Benefit, Life/LTC plans are the oldest alternative to traditional LTC. Lincoln MoneyGuard is the most used versions of these products. This type of plan is often sold as a re-allocation of assets by using the built in ROP features, and death benefit to address the “what happens if I don’t use it” objection often voiced with Traditional LTC.
Your client can avoid taking on all the risks of self-insuring and having to decide which assets to sell first should the need for long-term care arise by leveraging a portion of their cash reserves designated for long-term care costs. These reserves would be reallocated to purchase a Lincoln MoneyGuard® Reserve Plus policy.
5 Reasons Why
For more than a quarter century, advisors have been turned to Lincoln
MoneyGuard products to protect clients' wealth and retirement assets from the risks of long-term care expenses. Here’s why:
Clients receive income tax-free reimbursements for qualified long-term care expenses,
and premium rates never increase.
2. Leaving a legacy
If your client never needs long-term care or doesn’t use all of their long-term care benefit, a death benefit is paid to beneficiaries
3. Return of premium options
Full return of premium available after year 5, provided all planned premiums are paid.
4. Streamlined process
Just a few simple prescreening questions and a 45-minute phone interview is all it takes to start the application process. No exams, labs or doctor’s statements.
5. Outstanding claims management experience
Previous MoneyGuard claims experience shows that the majority of claims are approved and paid within five days or less.
And once eligible, there is no deductible or elimination period.
Product Features & Benefits
Income tax-free LTC Benefits
Benefits are generally paid income tax-free under Internal Revenue Code (IRC) Section 104(a)(3).
If long-term care is needed and eligibility requirements have been met, the specified amount of death benefit is accelerated to pay for covered expenses up to a monthly maximum benefit amount. The acceleration of benefits is provided under the Long-Term Care Acceleration of Benefits Rider (LABR). There is a choice of either a two or three-year LABR duration.
Additional coverage may be purchase at issue continue long-term care benefit payments for covered expenses after the initial specified amount of death benefit has been exhausted. You may choose to extend benefits for either a two or four-year duration. The Long-Term Care Extension of Benefits Rider (LEBR) provides these benefits for a specified period. Long-term care coverage will continue as long as you remain eligible or until the entire long-term care benefit is exhausted.
Income tax-free death benefit
If LTC is needed, provided all planned premiums are paid to keep the policy in-force, a death benefit is paid to beneficiaries, income tax-free under IRC Section 101(a)(1). If the entire specified amount of death benefit has been used to pay for long-term care, beneficiaries receive a residual death benefit. At the time of purchase, the benefit is equal to the lesser of 5% of the initial specified amount of death benefit or $10,000, and will be adjusted for loans, withdrawals and policy loan repayments. The greater of either the unused specified amount of death benefit or the residual death benefit will pass to the beneficiary without the delay of probate — provided the estate is not the beneficiary.
Return of premium
The policy provides return of premium options to be selected at the time of purchase. Once chosen, they cannot be changed. The return of premium is provided through the Value Protection Rider available at issue on all policies. The amount returned will be reduced by any loans, withdrawals, and benefits paid. If surrendered before the
planned premiums are paid, the surrender value will be paid. The Value Protection Rider contains complete terms and conditions. There may be tax implications when the return of premium feature is exercised. Consult a Tax advisor.
Option 1: Choose to maximize long-term care benefits
- A return of 80% of paid premiums is available once all planned premiums are paid.
- The total long-term care benefit amount will be greater than with Option 2
Option 2: Choose to maximize return of premium
- A return of 100% of paid premiums is available after year 5 once all planned premiums are paid, subject to the vesting schedule below. An additional premium load applies for the graded return of premium option
|Year 1: 80%||Year 4: 92%|
|Year 2: 84%||Year 5: 96%|
|Year 3: 88%||Year 6: 100%|
Amount of Coverage:
$500,000 with 2-year LABR
$750,000 eith 3-year LABR
A choice of flexible payment options of 1 through 10 years.
Issue ages & classes:
Ages 40–79 (age last birthday)
Couples Discount, standard
Lifetime benefit guarantees:
Benefits are guaranteed, assuming all premiums are paid when due, and subject to the claims-paying ability of The Lincoln National Life Insurance Company. Any loans or withdrawals may jeopardize your policy performance and guarantees, and may have tax implications.
The policy is guaranteed a 2% credited interest rate and policy value growth is tax-deferred.
No deductible or elimination period:
There is no deductible or elimination period to satisfy, and will receive benefits as soon as you are eligible
Benefit period option:
Choose between 2–7 years of long-term care benefits based on the duration of the LABR and LEBR options chosen.
At issue, compound inflation protection may be purchased that will increase long-term care benefits. The same inflation protection option for the Long-Term Care Acceleration of Benefits Rider (LABR) and the Long-Term Care Extension of Benefits Rider (LEBR). Compound 3% or Compound 5%
- On each policy anniversary, the monthly maximum benefit increases by 3% or 5% of the prior year’s amount.
- Available at time of application to married couples or domestic partnerships as recognized in the state of policy issue.
- Both partners need not apply.