Archive for November, 2015

LTC Insurance Discounts for Couples?

November 23, 2015

Everyone wants to pay less.  Long term care insurance premium discounts are generally available for anyone who is part of a couple (married or otherwise).  These discounts, while varying by insurance company and sometimes by state, are substantial.  They can often make the difference between a policy being affordable or not.  Continue reading as we explore what is available.

All that follows is based upon individual policies currently available for sale to Colorado residents.  Discounts may have been different for readers with older in-force policies.  Different discounts apply to employer-based (work site) policies.  The differences among states are usually minor, but do check to be sure.

Genworth. 15% discount for an applicant who is married, in a Domestic Partnership/Civil Union or: “…are and has been living together for the past three consecutive years in a committed domestic relationship as partners”.  The 15% discount is effective if only one applies, both apply & both are approved, or both apply & only one is approved.

John Hancock.  30% discount if both are married/Civil Union/Registered Domestic Partnership, both apply & both are approved.  No discount if only one applies, or both apply & only one is approved.  Same 30% discount for couples who have lived together in a committed relationship for the past 12 months.

LifeSecure.  30% discount if both apply & are approved.  No discount if applicant is single or if a couple with both applying, only one is approved.  The discount also applies to someone “…with whom you have been living together in a common household for at least three years and have an exclusive mutual commitment, including financial interdependence, similar to that of marriage.”.

MassMutual.  15% discount if applicant is part of a married couple or in a civil union, but only one applies (or if both apply but only one is approved).  30% discount if both apply & both are approved.  Same discounts apply if living together for the past 3 consecutive years in a committed relationship & sharing basic living expenses.

MedAmerica.  5% discount if applicant is part of a married couple/Civil Union & only one applies, or both apply & only one is approved.  30% when both apply & are approved.  Same discounts apply if both “…have a single dedicated relationship of at least 12 months duration and intend to remain in the relationship indefinitely…and they share the same permanent residence and have done so for at least 12 months…and they are financially interdependent”.

Mutual of Omaha.  15% discount if applicant is part of a married, or registered domestic partnership or civil union, couple, but only one applies (or if both apply but only one is approved).  30% discount if both apply & both are approved.  Same discounts apply if: Living together on a continuous basis for the most recent three years and sharing “…a serious and committed personal relationship…intended to be lifelong”.

Transamerica. 15% if part of a married couple but only one applies (or if both apply but only one is approved).  30% if both apply & are approved.  Same discounts apply if living together unmarried, and sharing expenses for at least two years.

For unmarried couples, all insurance companies have provisions that say in effect: “Neither of the two people can be married to anyone else”.  “…are not related by blood or a degree of closeness which would prohibit marriage in the state of their residence”.

For all companies, to get the two-person discount: both policies must be applied for, and approved, and issued, and accepted, and remain in-force for a stated minimum time.  No gaming the system.

To my knowledge, all company discounts apply to opposite gender as well as same gender couples.

Now you know as much about couple’s discounts as I do.  Does this mean that you should focus on discounts?  Not at all.  If price is a major concern for you (as it is for me), you should look at the comparative total monthly or annual premium…not whether or not a discount is offered.  Different insurance companies have different age, gender, and couple status demographics that they are more interested in than others.  Quality of the insurance company, availability of particular policy riders, reputation for hassle-free claims payment & underwriting issues are often more important than price.

With regard to price, I subscribe to a powerful software program that allows me to compare premiums for virtually every company (and policy design) that offers long term care insurance.  When preparing a recommendation I always look at the total cost of a number of comparable policies.  For a higher cost yet comparable policy, I evaluate whether other considerations outweigh the difference in cost…

So when does a particular discount become important?  Remembering that discounts are but one component of a policy’s total cost:

  1. A couple should almost always buy long term care insurance policies from the same company.  (Genworth would be the exception).
  2.  Insurance companies have different minimum”living together” time requirements ranging from 12 months to three years.  This could come into play in determining the lowest cost long term care insurance policy(ies).

Now you know why I ask “are you married or otherwise in a committed relationship” during my pre-qualification questioning.  It is not me being nosy, but rather trying to save you some money.

 

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence. Long term care insurance policies vary widely from company to company & often within the same company. Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice. Consult your tax advisor or attorney for these matters.

 

© Raymond Smith, The Long Term Care Specialist, 2015