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Thomas Beauregard (Photo: HCG)

Life Health > Long-Term Care Planning

New Program Can Cover Up to 50 Weeks of Home Care

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What You Need to Know

  • The product can pay $400 to $1,200 per week for care.
  • HCG Brokerage is offering the program to people ages 35 through 84 through a simplified underwriting process.
  • HCG says the applicant acceptance rate is over 85%.

HCG Secure has a new idea for clients who want some help with paying for post-acute care: an association-based program that can pay for up to 50 weeks of home care.

The Goshen, Connecticut-based insurance brokerage is working with an association and a life insurer to offer the Home Care Secure program to consumers ages 35 through 84 in 22 states.

Tom Beauregard, the CEO, entered the insurance industry in 1985 as a senior underwriter at Cigna. Later, he was a national practice leader at Aon Hewitt. He then spent 15 years at UnitedHealth Group. When he left UnitedHealth in July 2020, he was the company’s chief innovation officer.

Beauregard said he and other Home Care Secure founders started Home Care Secure because of their own experiences with helping older family members.

“Home Care Secure allows families to plan ahead, with the assistance of trained care coordinators,” Beauregard said.

The Program

Home Care Secure has signed Guarantee Trust Life Insurance of Glenview, Illinois, to write the coverage. Guarantee Trust was founded in 1936 and has an A- rating from AM Best.

A St. Louis-based nonprofit, the Aging at Home Association, serves as the delivery vehicle.

The association was founded in April 2021. It says its goal is to help members plan for aging in their own homes.

Consumers can join the association to support its mission and get information about home care for $9.97 per month.

Association members who pay extra can get the Home Care Secure program.

HCG Secure offers the home care insurance program through a simplified underwriting program.

HCG Secure says more than 85% of those who go through its application process get coverage.

HCG Secure is distributing the program through Amwins.

The Costs and Benefits

Association members can buy $20,000 to $60,000 in Guarantee Trust home care coverage.

The policy pays cash indemnity benefits to insureds who lose the ability to perform two of six “activities of daily living,” such as going to the bathroom on their own, or who are cognitively impaired.

Rate examples on the HCG website show that, including the association membership fee, the monthly cost of the home care insurance program could be as little as $41.26 per month, for a 60-year-old man, and as high as $170.10 per month, for a 70-year-old woman.

HCG and Guarantee Trust are trying to minimize underwriting problems, and hold the costs down, by having the benefits “grade in over time.”

In practice, that means a buyer can use only 10% of the lifetime maximum benefits in the first year the insurance certificate is in effect.

A certificate holder can get access to a higher percentage of the benefits over the next five years. The holder can get and use all of the benefits in the sixth certificate year and later years.

When an insured files a claim, Guarantee Life will make weekly cash payments, with the amounts based on the total amount of benefits available, for up to 50 weeks.

The association supporting the program also provides access to care planning and caregiver advice services.

The policy is guaranteed renewable, and the monthly premiums are fixed as long as a consumer maintains the coverage, according to the program brochure.

Consumers can also buy an optional simple inflation rider.

Considerations

For insurance and retirement planning specialists, the new program could serve as a kind of emergency annuity that pumps out cash in when a client needs home care.

Here are some issues for a financial professional to consider:

1. What, if any, post-acute care resources are available through a client’s long-term care insurance policies, life insurance policies and annuities?

2. What are the odds that the client might end up needing post-acute care?

3. If the client needed post-acute care, how likely would the client be able to get by at home?

4. What other kinds of home care funding vehicles could a client set up today, and how would the costs, benefits and risks associated with those vehicles, and the new home care insurance program, compare?

5. How do the financial professional and the client believe the stability of the new home care insurance program is likely to compare with the stability of alternative vehicles?

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Tom Beauregard (Photo: HCG)