Below are some frequently asked questions about Long-Term Care with Life Insurance.
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What is long-term care (LTC)?
Long-term care is the personal care and/or supervision (custodial, supervisory, or skilled care) needed by persons of all ages for an extended period.
Often this is because of conditions associated with the effects of aging, but LTC may be needed at any time due to an accident or illness. At some point in our lives, it is estimated that more than 60 percent of us will need assistance with things like getting dressed, driving to appointments, or making meals.
Is LTC covered by health or disability insurance?
It is a common misconception that LTC is covered by health or disability insurance. LTC services are typically not covered by Medicare, Medicaid, private health or disability insurance.
How does this program cover LTC costs?
This program is a Universal Life Insurance Policy with Long-Term Care (LTC) Benefits. It provides dual protection for the cost of LTC and financial support for your beneficiaries after you are gone.
When you elect a life insurance benefit amount, you will also get LTC coverage. The LTC coverage amount is a percentage of the Life Insurance benefit amount and is paid out in monthly increments.
Should I consider this if I already have LTC insurance?
If you already have LTC insurance, great! You may want to use this enrollment as an opportunity to review your coverage. It is often recommended to keep your original coverage because of the value it provides. However, if you would like to review your existing plan in more detail, you can meet with one of the LTC insurance specialists supporting this enrollment to review your coverage and options.
Can you explain in more detail how I might use the policy?
There are generally two ways you might use the policy:
If you don't need LTC in your lifetime, there is still a death benefit available to your beneficiaries. As an example, if you buy $100,000 of life insurance and don't use any LTC expenses, your beneficiaries would still be able to receive up to $100,000 in death benefits*.
If you need LTC coverage, the benefit will pay a monthly benefit of 4% of the total amount of Life Insurance you buy once you qualify for benefits. Again, using the example of $100,000 in Life Insurance coverage, you will receive $4,000 a month for up to 50 months (about 4 years) for a total potential benefit of $200,000*.
*Death benefits reduce to one-third at age 70 or on the 15th policy year, whichever is later.
Are there different types of coverage available depending on age?
There are two types of Universal Life policies available, depending on your age at the time of enrollment:
Trustmark’s Universal LifeEvents® plan applies to enrollees ages 18-64. It pays a higher death benefit during the working years when expenses are typically higher, and families need maximum protection. The death benefit reduces to one-third at age 70 or the beginning of the 15th policy year, whichever occurs last. (The death benefit reduction does not impact premiums or LTC benefits.)
Trustmark’s Standard Universal Life plan applies to enrollees ages 65 – 70. It is important to note LTC is not available for applicants over age 70.
How much does it cost?
The premium is based on how much death benefit you select, the age that you are at the time of application and your smoking status.
The best way to see your pricing is to click "Check Your Rate" and login to begin the enrollment process. You are under no obligation to purchase once you start the enrollment process and can exit anytime.
You will enter some personal information and choose a death benefit from $25,000 - $300,000, in increments of $25,000.
Can I increase my Universal Life Insurance policy at a later date?
Yes, you can request to increase your existing Universal Life Insurance policy at a later date (after your 30-Day Free Look Period) with medical underwriting. If approved, the increase in coverage will be based on your current (attained) age.
Can I obtain coverage without providing evidence of good health?
Yes, if you select a death benefit within the program’s Guaranteed Issue amount and are between the ages of 18 and 64, there are no medical questions and acceptance is guaranteed. Guaranteed issuance is unique to special enrollment periods and does not re-occur every year.
If I apply for coverage beyond the available Guaranteed Issue amount for my age, what are the medical questions?
There are two sets of potential questions you will be asked if you apply for coverage beyond your available Guaranteed Issue amount:
Within a certain benefit range (called the Modified Guaranteed Issue) you need to answer a shortened health questionnaire consisting of two questions:
If either of these questions is answered “yes” or you select a death benefit amount above the Modified Guaranteed Issue range, additional health questions will be asked which includes a full health questionnaire, height/weight evaluation, Medical Information Bureau (MIB) screen, and a prescription drug screen. Additional medical questions may be asked based on findings.
This is called simplified issue - here are some examples of the types of questions asked at this stage:
Has any person to be insured:
Questions may vary depending on your state and benefit amount selected. The best way to see the questions specific to your coverage is to begin the enrollment process.
If I apply for more than the Guaranteed Issue amount of benefit but am denied, do I still receive the full amount up to my Guaranteed Issue limit?
Yes. If you do not qualify for an amount beyond the GI limit you will still be able to receive a policy up to the full amount of the Guaranteed Issue.
How do you qualify to receive LTC Benefits?
To receive LTC benefits, you must be receiving assistance with two (2) or more activities of daily living (transferring, continence, bathing, dressing, eating, toileting) or you have cognitive impairment expected to last more than 90 days. You also need to be receiving care from a licensed professional in a LTC facility, nursing facility or receiving home health care. Benefits are payable after you meet your 90-day elimination period, meaning, benefit payments will start 90 days (about 3 months) after your LTC needs begin.
A qualified health professional will need to certify that you meet the activity of daily living or cognitive impairment requirement.
Does family-provided care qualify me to receive LTC benefits?
No, you must be receiving care from a qualified, licensed professional in order to receive LTC benefits under the plan. Once your claim is approved, the full monthly benefit amount is paid regardless of the actual professional care expenses incurred. If the benefit amount is not entirely consumed by professional LTC expenses, any remaining benefit can be used at your discretion.
Are there any limitations on where care is received?
If you qualify for LTC benefits, where you receive care is up to you (at home, assisted living, adult day care, nursing home). However, the policy will only pay LTC benefits for care received in the United States or Canada.
Death benefits are paid anywhere in the world.
What if I have a pre-existing condition?
The plan includes a 6/6 pre-existing condition, meaning if a claim is filed within the first 6 months from the enrollment date due to a pre-existing condition 6 months immediately prior to the enrollment date, the claim would not be paid. If a claim is filed after 6 months from the enrollment date, the pre-existing condition clause is void. Refer to your policy for the pre-existing condition definition.
Once I am receiving LTC benefits under the plan, do I continue to pay premiums?
No, premium payments will be waived while you are receiving payments under the LTC benefit.
What happens if I stop paying my premium?
Coverage will remain in force as long as there is sufficient cash value to cover the monthly expense, rider and cost of insurance charges. If insufficient, the coverage will lapse.
What happens if cancel my plan at a later date?
If you cancel the policy after the 30-Day Free Look Period, you will receive any Cash Value minus any applicable policy surrender fees.
How long does this policy last?
Coverage is designed to mature at age 100. If you are living and the coverage is in force on that date, the cash value will be payable, and the coverage will terminate.
The illustration provided when you receive your coverage certificate will demonstrate the projected coverage period at the selected planned premium rate under both the current and guaranteed scenarios.
You will also receive an annual statement on the anniversary date of your policy to review your coverage period.
What if I leave my employer or retire?
This policy is completely portable – meaning you take the coverage with you if you change jobs or retire from your current employer. You should contact Trustmark to arrange for direct billing, and you can continue coverage without any change in premium or benefit amounts.
Can policyholders take a loan from the cash value? If yes, what are the terms?
Yes, the interest rate is 8% on policy loans.
Are my premiums guaranteed or will the costs increase with age?
Your premium will be based on your age at the time of issue and will not increase as you age. You will receive an annual statement on the anniversary date of your policy that will explain the details of your coverage and your policy activity.
How do I pay my premium?
The premium will be deducted from your paycheck based on your pay schedule (monthly, bi-weekly…etc.).
Are premiums paid on a pre-tax or post-tax basis?
The premiums are paid post-tax.
Why does the application require my SSN, height, and weight?
The insurance company requires SSN to set up the policy as it is used for tax purposes and claims. Height and weight are used in underwriting if you are ineligible for Guarantee Issue underwriting and are required to answer health questions.
Are my LTC benefits taxable?
Benefits paid may or may not be taxable. Whether or not you or your beneficiary incur a tax liability when benefits are paid depends on how the IRS interprets applicable portions of the Tax Code. As with all tax matters, you should consult your personal tax advisor to assess the impact of this benefit. The insurance company has no responsibility for any tax consequences of any benefits paid under this policy. The rider for LTC insurance is not intended to be a federally qualified LTC insurance contract.
How do I cancel my policy?
To cancel, contact Trustmark directly at 800-918-8877 or customercare@trustmarkbenefits.com