Hybrid/LTC Options Now Available & Overview of New Upcoming Changes at OneAmerica
The popularity of Hybrid or Linked LTC/Chronic Care solutions continue to grow as carriers increase product flexibility and improve options and as consumers prioritize the need for this kind of coverage.
Earlier this year, AgencyONE launched a series of ONE Ideas featuring our carrier partners who offer Hybrid LTC products. Our first Hybrid Product ONE Idea dated April 22 briefly discussed the specific carriers in our portfolio – Lincoln, OneAmerica, Nationwide, and Securian. Our second ONE Idea from May 22 was a deep dive into the features that Lincoln Moneyguard offers. Feel free to review the previous ONE Ideas linked above for a recap on the carriers and products.
This week’s ONE Idea will focus on OneAmerica’s current Hybrid/LTC options available to our AgencyONE 100 advisors. They include individual and joint life products that offer excellent premium design flexibility. The products have a unique option for a lifetime benefit period and are the only product that allows for ratings on the client. For clients who are 65-85, OneAmerica also has an annuity-based option called Annuity Care which is appealing to older age clients. (Find the Asset Care Product Overview HERE)
We just learned this past week that OneAmerica is coming out with pricing and benefit changes on their Asset Care (Life/LTC product line). The change will take effect on October 21, 2024. AgencyONE will send a product idea update as soon as these changes are in effect and able to be presented.
Thank you to our OneAmerica Representative Brian Shepard, CLTC and Regional Account Director Care Solutions for agreeing to be interviewed for this ONE Idea. Please note that in the time since this interview, OneAmerica has appointed a new Regional Vice President, Brad Shepard (this is not a typo, Brad and Brian are brothers), who will assist us with ongoing business.
OneAmerica – 2024 Progress
Sales remain strong year-over-year with the Care Solutions products. OneAmerica has been an industry leader in Asset-Based LTC solutions for over 35 years. Asset Care, the flagship product, is a single premium whole life insurance chassis with LTCI benefits released to market in 1989. Since then, OneAmerica has created additional versions of Asset Care that can be funded with qualified money and ongoing premiums, and an entirely different product called Annuity Care. Collectively, the product suite has become known as OneAmerica Care Solutions.
What sets OneAmerica’s Individual and Joint products apart from other Hybrid LTC options? (Learn more about Asset Care differentiators HERE)
There are four things that make Care Solutions products unique:
1) The joint life option allows for two people to be covered under one policy and to share the LTC benefit pool. Of course, OneAmerica insures single clients as well.
2) These products can be funded with virtually any type of premium – from single premiums of cash or qualified money to recurring and limited pay options, and even 1035 exchanges from existing life insurance policies or annuities.
3) The products offer an optional “Continuation of Benefits rider” (COB) that guarantees LTCI benefits will be payable to the insured(s) for as long as they need care, with an unlimited benefit pool. Limited durations are also available.
4) OneAmerica offers some of the most reasonable underwriting guidelines in the industry and is often able to make offers to people who would not be insurable with other companies.
Who is OneAmerica’s target market for each product option?
The target market for Asset Care is 50-70 years old. The reason is the life insurance component as the base policy. The younger and healthier the client, the better leverage and the less invasive the underwriting. This product allows underwriting through table 8 which can be appealing to clients with health concerns. More traditional underwriting is expected when health is a concern and over age 60.
Annuity Care offerings are a hit with clients 65-85 years old (age 87 with home office approval)
This clientele tends to be older and wealthier with possible health complexities. Most clients are in the distribution phase of their life with the ability to reposition assets. The underwriting is non-invasive (no paramed or medical records). It is a pass/fail interview if the LTCI rider (COB) is elected.
What is OneAmerica’s most popular design when illustrating individual and joint products? (Learn more about qualified funds for LTC HERE)
The Asset Care concept using qualified money is a packaged product with a 25% bonus applied to the premium which takes every dollar transferred and spends like $1.25 to fund the base and rider. The client appreciates this as there is no additional premium owed and OneAmerica does the clerical work. The client just receives a 1099 each year for 10 years on the distribution of pre-tax money. This is a hot topic as it opens the conversation about using qualified money to fund LTC coverage even if the advisor wants to manage the asset moving forward and accounts for the distributions to fund an ongoing premium.
What about Annuity Care?
OneAmerica recently announced instant approval with Annuity Care when putting premium into the deferred annuity only (base only coverage). Why do this? The client already has a non-qualified annuity with gain. With Annuity Care being a Pension Protection Act compliant annuity, any funds used for LTCI claim are distributed tax free. We say, “Tax Deferred to Tax Free for LTC”!
Stay tuned for the updates coming out on October 21. OneAmerica will launch enhanced long-term care protection options for Asset Care which will include:
• Added and enhanced benefits to support informal caregiving, independent caregiving and care received at home;
• Simplified benefit period options to make tailoring a plan and designing coverage easier;
• Expanded inflation protection options to help safeguard against rising costs of long-term care over time;
• An enhanced benefit that provides direct physical, financial and emotional support for informal caregivers; and
• Improved value through enhanced pricing for many clients.
With its simple and flexible solutions, OneAmerica’s Asset Care helps your clients cover long-term care expenses if they need it — or leave a financial legacy to their loved ones if they do not.
OneAmerica has a robust marketing site that will help you communicate the product offerings to your clients. Additionally, their regional directors are available to discuss options in more detail if you have specific questions or want more information on their solutions. Again, thank you to OneAmerica for their contribution to this ONE Idea.
The variety of Hybrid and Linked LTC/Chronic Care solutions available today make customizing a policy to your client’s needs easier than ever before. With the continued aging of the population, we will see more clients and their advisors requesting long-term care coverage.
Please contact the AgencyONE Case Design department at 301.803.7500 for more information or to discuss a case!
