Long Term Disability Insurance

Parent Cafe
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<p>LT Disability through IEEE </p>

<p>Frankie…</p>

<p>Where’s any actual information about the policy itself? I’ve clicked through several pages of sales lit without yet coming across the actual summary of benefits. Do you know what you bought? How many ADL’s need to be met for the plan to work? </p>

<p>[ADL’s … different names, but basically aspects of daily life (feeding, dressing, bathing, walking, etc… ) that can no longer be done without assistance.] </p>

<p>I’m not saying your suggestion is bad, I am saying there’s absolutely nothing on the site you listed for several pages that tells me anything about the policy or who the insurance carrier is. </p>

<p>Can you present more details? </p>

<p>What did you buy?</p>

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<p>First Penn Pacific offers a MoneyGuard LTC policy with which I have had good experience, especially if you can put in a large lump sum.</p>

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<p>“large lump sum.”</p>

<p>did you buy an annuity? I am not aware of LTC that take premiums paid in advance without some tax issues. I could be wrong, I’ll check when I get a chance.</p>

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<p>A quick check finds it is a universal life policy with a ltc benefit. It has a good idea in concept. However, crusing around, I found this from the Chicago Sun Times:</p>

<p><a href=“http://www.suntimes.com/business/savage/30973,cst-fin-terry-15.savagearticle[/url]”>http://www.suntimes.com/business/savage/30973,cst-fin-terry-15.savagearticle&lt;/a&gt;&lt;/p&gt;

<p>“This First Penn policy is based on a <code>universal life’’ insurance policy model. Thus, the benefits illustrated today depend on the policy continuing to earn the projected 6 percent to create this level of benefits. If interest rates were to fall significantly and stay low for several years, the policy reserves the right to lower the benefits. In the case of the 55-year-old woman, a sustained period of lower rates could cause the company to reduce death benefits to $79,800 and daily nursing home benefits to $109.32. That’s the true minimum guarantee. Without this reduction, the policy no longer would be able to fund its projected benefits - unless you were willing to add more money to the policy. You have to read the fine print to become aware of this risk. Be sure you look at the other</code>illustrated projections’’ for the policy - especially the one that shows what happens if interest rates do drop to 4 percent. You might not want to face the issue of lower benefits in a decade or so - just when you need to start withdrawing money to pay for your long-term care. Golden Rule’s ``Asset-Care’’ policy, on the other hand, requires a substantially larger initial premium but guarantees that the death benefit and daily care benefit cannot be reduced. In this case, a 55-year-old woman would have to deposit a single premium of $88,000 to get a guaranteed death benefit of $225,000 and; or $150 a day in nursing care benefits for 50 months, a little over four years. But there’s no chance that falling interest rates would cause this policy to reduce its promised benefits. This may seem expensive, but Golden Rule notes that it typically sells this type of policy on a joint life expectancy for husband and wife.”</p>

<p>This is the “what if” I wrote about eariler. What if rates go down? Well, either pump some more money into it to create the lost cash values or expect a reduced benefit. </p>

<p>Still it is a good combination in such a way to kill two birds with one stone. Just plan for the worst and it will always be better.</p>

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<p>I think the advantage to these UL type LTC policies, is that a healthy person who never needs the LTC benefit does not “lose” the premium paid in, instead they get it back as a death benefit. I have an older friend of the family who put in $100k and the policy is still going fine, he hopes never to use it and is almost 90 & still going strong, so I think it is more likely than not that he will NOT use the LTC, but still receive the death benefit.</p>

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<p>This url will bring you right to the insurance options that ieee members can purchase.</p>

<p>There is LTD as well as Long Term Care. I purchased LTD, not Long Term Care. </p>

<p><a href=“http://www.personal-plans.com/product/ieeeinsurance/usa/index.html[/url]”>http://www.personal-plans.com/product/ieeeinsurance/usa/index.html&lt;/a&gt;&lt;/p&gt;

<p>Hope this helps…</p>

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<p>“I think the advantage to these UL type LTC policies, is that a healthy person who never needs the LTC benefit does not “lose” the premium paid in, instead they get it back as a death benefit. I have an older friend of the family who put in $100k and the policy is still going fine, he hopes never to use it and is almost 90 & still going strong, so I think it is more likely than not that he will NOT use the LTC, but still receive the death benefit.”</p>

<p>I totally agree. I do like the concept. </p>

<p>But what I question is the internal mechanics of a Universal Life policy. In most cases as long as there is money in reserve to fund expenses…you have a policy. The day there isn’t… you don’t. </p>

<p>Most UL policies are sold on a minimum premium basis and I’m sure these combo policies also have some sort of minimum lump sum for the benefits. The problem can be since it is a FUTURE prediction of investment return, if the returns aren’t to projection, how long will the policy work at a lower rate of return? When you look at that expense/cashvalue and everything zeros out at the garanteed level… that is when you could have a problem. If I told you it would take $100,000 to fund this policy, but you really should put $150,000 in it, which would you do? :slight_smile: be honest. :slight_smile: </p>

<p>That was my point, look at the worst case, not the best case. If you understand the worst case and accept it and deal properly with it, you’re fine. What’s to understand about the best case? Why would that be a problem?</p>

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<p>All in all, not a bad group voluntary LTD plan. NYL is a good company with strong ratings. I skimmed through the site and copied a few things to be aware of. Understand I think there are some very good things with this policy, especially the payments to age 75. But the good things are the good things, the no worries, so reviewing them wouldn’t necessarily help.</p>

<p>{“Totally Disabled” means you are prevented by accident or sickness from performing the material and substantial duties of your usual occupation, provided you are not otherwise working for pay or profit.}</p>

<p>The last sentence would or could be of concern. By definition, you can’t work elsewhere and receive benefit. So if you couldn’t do this occupation anymore, but could teach it, you wouldn’t continue to collect, even though the income levels might be significantly different. If you have a policy find the definition of disability and read it to see if it changes at any point. </p>

<p>{Premium contributions may be changed by New York Life Insurance Company on any premium due date and any date on which benefits are changed. However, your rates may only change if they are changed for all others in the same class of insureds under this group policy. For example, a class of insureds is a group of people all with the same issue age, Waiting Period, and Plan. Benefit option amounts are not guaranteed and are subject to change by agreement between New York Life Insurance Company and the Trustee under Trust Agreement with The IEEE. }</p>

<p>Not really terrible but you need to be aware. The premium can change, the policy can be dropped. This is a basic of group DI. That is why NON Can, Gar. Renewable are features you look for. </p>

<p>"The Plan limits benefits for disabilities due to Mental Disorders and Chemical Dependency to a maximum of 36 monthly payments. "</p>

<p>It means three years for stress or basically till the arguement that a stress related illness is or isn’t mental. This also is very common in group. </p>

<p>Overall it’s a pretty decent policy. If you can deal with the negatives and there may be more than I listed, you’ll be fine. If anything you should go through the paperwork (policy ) they sent you and dogear, paperclip or highlight. If you come across something you don’t understand…ask.</p>

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<p>Waaaaa. The mattress is sounding better and better.</p>