Life-Home Care Hybrid May Help Clients Manage Long-Term Care Risk

An insurance broker is offering advisors and their clients a new long-term care planning tool.

HCG Secure has teamed up with Guarantee Trust Life Insurance to introduce the Home Life Secure life insurance policy.

The policy combines home care benefits with a whole life insurance policy. The life-home care hybrid policy can provide $10,000 to $150,000 in home care benefits.

What It Means

Aside  from scenarios that involve clones or the arrival of hostile space aliens, just about everything that could have gone wrong in the U.S. market for stand-alone long-term care insurance went wrong between 2000 and 2015. That led to a slump in long-term care planning product development as many baby boomers were aging out of being healthy enough to qualify for traditional medically underwritten long-term care insurance policies.

HCG Secure is positioning its new product as a planning tool that could be suitable for budget-conscious clients who already have conditions such as diabetes.

Home Care Secure

HCG Secure is the Goshen, Connecticut-based company that recently introduced the Home Care Secure insurance policy.

The policy can pay $20,000 to $60,000 in home care benefits over a period of up to 50 weeks.

Guarantee Trust Life is writing the coverage.

A nonprofit group, the St. Louis-based Aging at Home Association, is offering the program as an optional member benefit.

Home Life Secure

HCG Secure and Guarantee Trust Life have based the new product on a “graded death benefit” whole life policy.

The policy provides home care benefits through a chronic illness accelerated death benefit rider.

Starting in the third policy year, the insured can use 90% of the available death benefit to pay for care. The insured can get either 8% of the available death benefit each month, or 50% of the available death benefit in one lump sum.

HCG Secure and Guarantee Trust Life minimize the impact of a buyer’s health problems by limiting the amount of benefits an insured can get in the first two years the policy is in effect.

In the first policy year, the maximum home care benefit, or death benefit related to a death from natural causes, is 150% of the premium payments.

In the second policy year, the maximum death benefit for a death from natural causes will be half of the full policy death benefit, and the maximum amount of benefits available through the chronic illness accelerated death benefit rider will be half of the maximum rider benefits.

HCG Secure says the design of the new life-home care hybrid should make it available even to consumers who already have chronic health conditions such as Type 2 diabetes.

The policy also comes with an annual well-being assessment, a 15% discount on Wellthy home care coordination services and a 10% discount on Trust & Will estate planning services.

Advisors and LTC Planning

Tom Beauregard, HCG Secure’s CEO, said in a comment on the LTC planning market that he believes many advisors have focused on use of annuities and ETFs in LTC planning.

Annuities and ETFs “are more easily accessible, compared to traditional long-term care solutions,” he said.

Today, he added, he sees advisors looking at new types of insurance products.

HCG Secure is talking to advisor organizations about the value of the kind of care coordination services that come with a product like the Home Life Secure policy.

HCG Secure is also talking about how a whole life-based product can provide tax-free benefits for a client’s beneficiaries if the client avoids having to pay for home care.

Pictured: Thomas Beauregard. (Photo: HCG)