Minnesota Life Hybrid Long Term Care

CareShield by Securian Financial Group is a hybrid LTS insurance product. The product combines the traditional benefits of a life insurance policy with the LTC benefits to cater for chronic illnesses. This basically ensures that the policyholders will receive benefits whether they end up requiring long term care or not. According to the company’s CEO, the product is aimed at aging citizens who are concerned that they may need long term care but who are skeptical about the usual ‘use-it-or-lose-it’ nature of traditional long-term care insurance policies. The premiums for the product are guaranteed to never increase and a benefit is guaranteed in terms of LTC benefits or a death benefit.

Product features

CareShield is in its essence a universal life insurance policy with accelerated death benefits. With this, the policyholder will receive a tax-free death benefit if they pass on without having needed Long Term Care. The living benefits are built into the policy thus not requiring to be sold as a separate accelerated benefits rider. This is quite unique in the industry. The premium is paid in bits that never increase as long as the policyholder pays in time. This again differs from the industry norm where the premium has to be paid as a single one-time upfront fee. Customers will also receive partial or full refunds for their premiums f they chose to discontinue the policy after some years. This configuration basically addresses the three major concerns that LTC customers always have; What if I purchase a long-term care policy but never require one? What if the rates rise and I cannot afford it? What if I realize later that the policy is just not for me?  Finally, customers are at liberty to choose how to use their policy, whether as living benefits for illnesses or as death benefits for the policy beneficiaries.

CareShield is available in face amounts ranging from $50,000 to $500,000.

Availability

The company operates as Minnesota Life in all states except New York where the product is sold by Securian Financial Group. The product might not be available in all states. The primary reason why people purchase a life insurance policy is the death benefit. This is the one that gets accelerated if the policyholder becomes terminally or chronically ill. The surrender value and death benefit will reduce by the amount paid out to cover the LTC expenses.

Taxation

The rules governing the taxation of LTS benefits are still not clear in regards to whether or not all chronic illnesses qualify for tax exemption. It is advisable to consult with the relevant authorities since the company cannot guarantee that the benefits will be tax exempt. As far as hybrid LTC policies go, Securian’s product is definitely among the best especially due to its unique features such as the inbuilt accelerated benefits rider. However, like every other hybrid LTC, the product is primarily aimed at those who feel they may require LTC within their lives but do not like the ‘use it or lose it’ nature of traditional policies.