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Earvin

Life Health > Long-Term Care Planning

Magic Johnson's Firm Powers New Long-Term Care Effort

By Allison Bell

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What You Need to Know

  • The Bridge annuity contract is a non-variable indexed annuity with a built-in long-term care rider and a built-in wellness program.
  • EquiTrust Life Insurance Company, a life insurer controlled by Johnson's Magic Johnson Enterprises, teamed up with Assured Allies to create the product.
  • The Assured Allies NeverStop team says it will check in on insureds at least once every two years.

Earvin “Magic” Johnson — an NBA Hall of Fame basketball legend — is helping an aging tech firm enter the long-term care benefits market.

EquiTrust Life Insurance Company, a life insurer controlled by Johnson’s Magic Johnson Enterprises, teamed up with Assured Allies this week to introduce the Bridge annuity contract.

The product is a non-variable indexed annuity with a built-in long-term care rider, and a built-in wellness program. Clients who participate in the NeverStop health coaching program can earn extra long-term care benefits.

What It Means

Insurers, tech companies and investment firms know your clients need more help with long-term care planning, and they have products in the pipeline.

The Players

EquiTrust is a Chicago-based life insurer that was once a subsidiary of FBL Financial Group.

In 2011, FBL sold the company to investment firm Guggenheim Partners. Magic Johnson Enterprises bought a controlling stake in 2015.

EquiTrust has $26 billion in assets. It reported $150 million in net income for the first quarter on $503 million in revenue, according to a statement filed with state regulators.

Assured Allies is a Boston-based company that started up in 2018. It analyzes older people’s health conditions and offers recommendations for maximizing their independence.

Assured Allies has raised $43 million in funding from an investor group that includes Wilton Re, according to Gallagher Re.

The Product

The Bridge annuity is available to people ages 55 through 80, with a $50,000 minimum premium and a first-year coverage maximum of $1 million, and benefits payable monthly for 60 months.

The current version is available only to individual purchasers, not to couples or other joint owners. It offers an index menu that includes crediting-rate strategies such as the S&P 500 index and the Barclays Focus50 index.

EquiTrust is selling the contract through agents and brokers, utilizing a guaranteed-issue process that requires the client to go through a video interview with an underwriter. Clients who are already living in a nursing home can buy the contract.

The minimum guaranteed contract value is 87.5% of the premium, minus withdrawals and monthly long-term care rider charges.

EquiTrust is supporting the Bridge program with a microsite that includes an online product performance illustration system.

The Assured Allies NeverStop team says it will check in on insureds at least once every two years, but insureds who want to participate in wellness activities can contact their wellness coaches as often as they want.

The LTC rider pays benefits when a client is unable to perform two of six activities of daily living for at least 90 days or suffers from severe cognitive impairment.

The Future

Larry Nisenson, Assured Allies’ chief growth officer, said in an interview that the company hopes to license the NeverStop program to more insurers.

Investment firms want to avoid the kinds of problems that have faced the traditional stand-alone long-term care insurance market, but they are keenly aware of the need for LTC solutions and interested in backing firms with possible solutions, Nisenson said.

Pictured: Earvin “Magic” Johnson. (Photo: Jonathan Alcorn/Bloomberg)

Allison Bell

Think_Allison

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