MoneyGuard® Reserve Plus ?

[CAwireman]

Would like your opinions or experience with this.

My parents (in their 80’s) are looking for some way to help cover costs of long term care when the time comes.

Here’s what appears to be an insider brokerage/seller document. (Not meant for the public):

http://brokerage.berkadvisor.com/pdf/moneyguard-presubmission-uw-tool.pdf

My Parents told me this out of the blue on Sunday, and I advised them to wait until I could check it out. They feel that they have to sign up immediately, not a good indication of the bank trying to sell the policy.

Anything you can point me to, or share with me about this kind of a policy would be greatly appreciated.

[ljinvestor]

I am in the industry and in general the Lincoln MoneyGuard product has been a good option for many individuals because the insured has the ability of money back guarantee, death benefit, and/or LTC benefits. Its not a “use it or lose it” LTC policy. They either use LTC benefits during lifetime or beneficiary gets a death benefit.

Unfortunately, I think your parents waited too long to address LTC and won’t get much (if any) bang for their buck. MoneyGuard only issues to age 80 and this Reserve product only offers the money back guarantee if issued by age 65. An example for a 65yo female in good health putting $100k single premium into the product is as follows.

$100,000 money back guarantee,or
$166,339 death benefit, or
$499,017 in reimbursment LTC benefits (max $6,931 a month)

Much more fine print to the product but that is the basic premise. They would also have to be healthy enough to get it issued

[CAwireman]

ljinvestor

Much appreciated. I did find in the fine print:
Not FDIC insured, nor insured by any government entity. The seller (in this case, a bank) isn’t responsible for gains/losses, only Lincoln. Value
can drop.

The insight you have as to being late to the party is what I was also wondering about.

I called them this morning and believe I have talked them into hitting the pause button, and to look at all the options avaialbe before making a decision.

My Dad is retired govt/military. We believe he’ll be able to leverage VA for nursing home needs, but still looking into it.

This is largely for my Mom. I’ve asked them to start researching options where they live (back east).

If you ljinvestor or anyone else has some thoughts, let me know. Again, much appreciated!

[ljinvestor]

What is her actual age and any know health conditions or tobacco use?

Also, are they looking to put in a specific single premium amount or just pay annually?

[UCGal]

[quote=HiggyBaby]
My Dad is retired govt/military. We believe he’ll be able to leverage VA for nursing home needs, but still looking into it.
[/quote]

This is a good plan. Especially if he has any percentage of disability due to his service. (My father in law’s issues are partially (a small part) due to injuries that got him a purple heart in WWII.) The VA system has improved dramatically in the past few years.

[CAwireman]

[quote=ljinvestor]What is her actual age and any know health conditions or tobacco use?

Also, are they looking to put in a specific single premium amount or just pay annually?[/quote]

My Mom is 80 and turns 81 this November.
Very good health.

She was looking at a lump sum payment.

Thanks!

[ljinvestor]

If she is looking at single premium then it is still worth getting quote to see how much LTC & death benefit that MoneyGuard Reserve offers. I did notice that single premiums offer money back guarantee regardless of issue age, but they do put the age 65 restriction on flexible premiums.

“Lincoln MoneyGuard® Reserve Plus has a money back guarantee, through the Enhanced Surrender Value Endorsement (ESVE) available at issue on all single premium policies and flexible premium policies for ages 35–65. The amount received will be adjusted for any benefits paid and/or any loans and withdrawals, it may have tax implications. See Endorsement for complete terms and conditions.”

Other options are Universal Life or Whole Life Policies with LTC riders on them but the ULs will have little to no cash surrender value in case they needed the cash for other reasons. Hartford, Genworth, John Hancock, Protective, & Nationwide all offer these types of policies. Have agent get quotes from a couple of these carriers also, but my guess is that they won’t offer much more in death benefit & LTC benefit than MoneyGuard and they certainly don’t have the money back guarantee.

You are right that the guarantee is only backed by the insurance company but Lincoln Life has a pretty good history & reputation. She also needs to hurry up and make a decision because all of these only issue to age 80 when using the LTC benefits. Might be smart to start underwriting process with Lincoln National Life to make sure she qualifies, and then she can make decision to go forward or not. No out of pocket costs if she decides not to accept the offer.

[CAwireman]

[quote=ljinvestor]If she is looking at single premium then it is still worth getting quote to see how much LTC & death benefit that MoneyGuard Reserve offers. I did notice that single premiums offer money back guarantee regardless of issue age, but they do put the age 65 restriction on flexible premiums.

“Lincoln MoneyGuard® Reserve Plus has a money back guarantee, through the Enhanced Surrender Value Endorsement (ESVE) available at issue on all single premium policies and flexible premium policies for ages 35–65. The amount received will be adjusted for any benefits paid and/or any loans and withdrawals, it may have tax implications. See Endorsement for complete terms and conditions.”

Other options are Universal Life or Whole Life Policies with LTC riders on them but the ULs will have little to no cash surrender value in case they needed the cash for other reasons. Hartford, Genworth, John Hancock, Protective, & Nationwide all offer these types of policies. Have agent get quotes from a couple of these carriers also, but my guess is that they won’t offer much more in death benefit & LTC benefit than MoneyGuard and they certainly don’t have the money back guarantee.

You are right that the guarantee is only backed by the insurance company but Lincoln Life has a pretty good history & reputation. She also needs to hurry up and make a decision because all of these only issue to age 80 when using the LTC benefits. Might be smart to start underwriting process with Lincoln National Life to make sure she qualifies, and then she can make decision to go forward or not. No out of pocket costs if she decides not to accept the offer.[/quote]

ljinvestor,

One big part of the plan was something like – pay $50K up front, get $91K in total payments made to LTC provider. How would that pencil out? Does the plan need to simmer without deductions for some time to allow the $50K to be invested? What if the investment vehicle used for that fund does poorly, I assume the $50K could drop, and the other ~ $41 K would not materialize?

Thanks again

[ljinvestor]

Higgy,

That is a good question regarding how they are able to leverage $50k into $91k in LTC benefits for an 80yo. Ask that same question to the agent and they should be able to get a detailed answer from the Lincoln sales rep or home office. You will also want to ask if both the death benefit and LTC benefit amount is guaranteed or if it can drop because of poor interest rate performance.

My guess is that actuaries have looked at the life expectancy and also the likelihood of one going on a LTC claim at this age. They know the odds are in favor that an insured dies without any LTC claims therefore they are paying out that smaller DB amount. Even if they have someone go on LTC claim, only so much is paid out a year. That gives tinsurance company even more time to invest the original $50k premium in their bond portfolio.

[njtosd]

I know nothing about this provider specifically. But one thing that I learned (earlier this year when both my mother, father and mother in law suddenly had health issues that triggered their LTC policies) is this: be sure to understand very clearly what is required to trigger the policy, and how long the health problem has to go on before the insured qualifies for payment. My Dad had a very fast moving cancer (diagnosed in Nov. 2010, passed away in Mar. 2011). I believe that he did not qualify for benefits until 90 days after the policy was triggered. So for 75% of the time that he needed the policy, he was waiting to qualify for benefits (even though he had brain surgery and needed home care from almost the moment he was diagnosed). My mom (83 years old), on the other hand, didn’t have Alzheimers (one triggering event) but had mild mental impairment that made it difficult for her to care for herself. It was a bit of a struggle to get the company to pay benefits, although they eventually did.

One thing, it seems to me, that the LTC companies bet on is that the insured with die quickly or will die before enough time elapses to allow them to collect. I’m not saying that the companies are not honorable, but I’m going to look into the statistics before we buy for ourselves.

[CAwireman]

Really appreciate the info you guys!!

[CAwireman]

[quote=njtosd]I know nothing about this provider specifically. But one thing that I learned (earlier this year when both my mother, father and mother in law suddenly had health issues that triggered their LTC policies) is this: be sure to understand very clearly what is required to trigger the policy, and how long the health problem has to go on before the insured qualifies for payment. My Dad had a very fast moving cancer (diagnosed in Nov. 2010, passed away in Mar. 2011). I believe that he did not qualify for benefits until 90 days after the policy was triggered. So for 75% of the time that he needed the policy, he was waiting to qualify for benefits (even though he had brain surgery and needed home care from almost the moment he was diagnosed). My mom (83 years old), on the other hand, didn’t have Alzheimers (one triggering event) but had mild mental impairment that made it difficult for her to care for herself. It was a bit of a struggle to get the company to pay benefits, although they eventually did.

One thing, it seems to me, that the LTC companies bet on is that the insured with die quickly or will die before enough time elapses to allow them to collect. I’m not saying that the companies are not honorable, but I’m going to look into the statistics before we buy for ourselves.[/quote]

njtosd – did the beneficiary recieve the lump sum remainder of the policy? (I know it must be a difficult subject) If the LTC doesn’t activate in the Lincoln policy, the remainder is provided to the beneficiary upon the policy holder’s death.

[njtosd]

Higgy Baby – I read the policy and don’t remember there to be a lump sum payout, but there also wasn’t a lump sum pay in. I’m sure there are zillions of types of these policies these days, and I assume that the one that you are describing has a different set up than the one that my parents used.

After really thinking about all of this, I am somewhat convinced that if you start early and set aside your own investment for long term care, you are likely to come out ahead. Hard to say though.

It doesn’t seem that the following applies to you, but the other difficulty that I see with these policies (almost by definition) is that they have to be enforced by someone other than the insured (since the insured is presumably ill enough to require long term care). In our case, my brother and sister and I (in the middle of what was already a very difficult time) had to find and figure out how these policies worked and what needed to be submitted to get benefits. I am certain that without our help my parents would not have been able to jump through all the hoops that were necessary. So, if you do get this sort of policy, you need to be sure that you’re going to have someone (or better yet a number of people) who will be able to figure this all out for you.

And thinking about this is very depressing. Good luck with your efforts.

[CA renter]

[quote=njtosd]I know nothing about this provider specifically. But one thing that I learned (earlier this year when both my mother, father and mother in law suddenly had health issues that triggered their LTC policies) is this: be sure to understand very clearly what is required to trigger the policy, and how long the health problem has to go on before the insured qualifies for payment. My Dad had a very fast moving cancer (diagnosed in Nov. 2010, passed away in Mar. 2011). I believe that he did not qualify for benefits until 90 days after the policy was triggered. So for 75% of the time that he needed the policy, he was waiting to qualify for benefits (even though he had brain surgery and needed home care from almost the moment he was diagnosed). My mom (83 years old), on the other hand, didn’t have Alzheimers (one triggering event) but had mild mental impairment that made it difficult for her to care for herself. It was a bit of a struggle to get the company to pay benefits, although they eventually did.

One thing, it seems to me, that the LTC companies bet on is that the insured with die quickly or will die before enough time elapses to allow them to collect. I’m not saying that the companies are not honorable, but I’m going to look into the statistics before we buy for ourselves.[/quote]

Sorry to hear about your dad, njtosd. That’s such an awful and depressing thing to have to deal with.

My mom also went through the same thing. By the time she qualified for the LTC insurance that she had been paying for over many years, she was well on her way toward the end. She also died within that 90-day window, and never got to use a single cent of those benefits.

Guess that’s how insurance companies make their money. They’ve got their actuarial tables down to a science.

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