Perhaps the two biggest fears of retirees and pre-retirees are running out of money during retirement and how to fund a major acute health-care event. Recently, the Phoenix Companies, Inc. introduced a new annuity that it contends addresses those concerns in one package.
For an added fee, the Protected Solutions Annuity offers policyholders the ability to cover expenses related to chronic care either in a nursing home, an assisted-living facility or within a residence. The policyholder is further entitled to an enhanced death benefit.
Dana Pedersen, right, vice president and product officer for Hartford, Conn.-based Phoenix Cos., said in an interview with LifeHealthPro.com that this new annuity overcomes one of the principal objections to a standard long-term care insurance policythe “use it or lose it” element that means a policyholder can pay into the contract for years without ever actually using the health-care benefits.
However, if the chronic-care benefit is not used, this latest Phoenix Cos. annuity provides a cash surrender value as well as an enhanced death benefit to the policyholder’s heirs. “It gives clients a better peace of mind knowing the protection is there but if they don’t need, they still have something to show for it,” Pedersen said.
The new annuity is being offered exclusively through the AltiSure Group. Phoenix Cos.’s first foray into an annuity with long-term care benefits was about five years ago when it offered a GLWB on a variable annuity that was enhanced if the policyholder was confined to a nursing home. The Protected Solutions Annuity is not tied to a GLWB and offers more comprehensive long-term care benefits, Pedersen said.
The underlying framework of this latest product is a single-premium fixed indexed annuity with a 12-year surrender charge and “a standard level of commissions,” Pedersen said. It offers two indexed accounts as well as a fixed account. The fee for the chronic care/enhanced death benefit is 150 basis of the annuity’s account value, Pedersen said.