There are variations between the policy language and benefits between the many companies that offer Long-Term Care Insurance; however, the primary features and benefit choices are comparable from company to company. Premiums and underwriting criteria vary dramatically between insurance companies.
New York Life has multiple product offerings, and the AARP endorses one.
When comparing long-term care insurance, you should recognize the differences between New York Life plan and other companies.
The AARP-endorsed New York Life Long-Term Care Insurance plan is available to AARP members who are health eligible for the program. New York Life pays a royalty fee to AARP for the use of its intellectual property, and these fees are used for the general purposes of AARP.
New York Life has one of the most expensive Long-Term Care Insurance options available. While they offer the possibility of earning plan dividends, it is improbable ever to offset the high premium.
Because of the high cost of the policy, some advisors design plans without crucial features like inflation benefits or include benefit increases that increase the premium regularly.
Otherwise, the policy features and benefits compare well with all the leading companies. Plus, New York Life is a highly rated and well-respected insurance company.
Premiums are calculated based on the benefits and options you select at the time of application. This calculation also includes your age, health, gender, tobacco use, and other factors.
New York Life is certified as a partnership policy in most states if you have the state-required inflation option. You can get the current and future cost of long-term care services where you live, along with the availability of partnership plans and tax incentives by clicking here.
Features available with New York Life Long-Term Care
- Daily Benefits from $50 to $400 a day
- Option for Monthly Home Care Benefit
- Shared Care Benefit featuring a third pool of money
- Return of Premium Minus Claims
- Five different Inflation options including 3% simple, 3% compound, 5% compound, CPI, and options to buy additional benefit based on CPI
- Three elimination periods – 90, 180, or 365 days
- Caregiver training
- Home modifications
"My Care" is New York Life's third traditional Long-Term Care product. The two significant differences in this product are the use of "deductibles" instead of elimination period days and an 80/20 co-insurance built-in.
Most Long-Term Care Insurance policies use "elimination periods," which are once-in-a-lifetime deductibles based on days, not dollars. Many companies use calendar days, not dates of service, so that you would be eating your deductible days with little or no costs in some situations. However, there are no elimination periods with "My Care," but there are cash deductibles.
Deductibles range from $4,500 to $21,000 of incurred costs, and the deductible also GROWS with inflation.
The 80/20 co-insurance means the policy pays only 80 percent up to the monthly benefit.
For example, you have a $5000 a month benefit, and your bills are $5000 – the policy will pay up to $4000 after the deductible.
Remember, New York Life is typically sold without guaranteed inflation (like 3% compounded) but rather with future purchase options (or no inflation at all) since the price is much lower without guaranteed inflation benefits. However, options stop at age 70 and are not available at the time of claim. Plus, NY Life charges for the extra purchased benefit at your attained age – so the premium increases each time you purchase and gets more expensive over time.
Note, New York Life agents talk about dividends. They have only awarded dividends once with long-term care. Don't depend on future dividends to ever come close to paying back the cost differences between New York Life and other companies.
If you own a New York Life Long-Term Care policy and seek help submitting a claim, LTC NEWS offers free - no-obligation assistance - including help finding quality caregivers and facilities. Since most agents have little or no experience in this area, this assistance can be beneficial for the entire family - Filing a Long-Term Care Insurance Claim | LTC News
Federal Regulation and Consumer Protections
All Long-Term Care Insurance contracts are regulated under IRS regulations §7702B(b)(1). Any insurance contract that meets the guidelines set by the Internal Revenue Service is considered long-term care. All insurance products that meet these federal guidelines contain consumer protections and regulated benefit triggers, in addition to tax advantages.
New York Life's long-term care products meet the Section 7702(b) guidelines. Any insurance contract that falls under Section 101(g) cannot call itself 'Long-Term Care Insurance' and generally should be avoided as a long-term care solution. Federal law prohibits insurance companies from marketing these policies as "long-term care" policies.
New York Life's 'preferred' rate is actually a blended rate for all non-substandard health. In other words, their preferred rate is not comparable to other companies' preferred rates and includes a much wider group comparable to other companies' standard or select rates.
New York Life's 'standard' rate is a substandard health rate that adds cost with more limited benefits.
Every company has its own underwriting rules which determine insurability and rate class. An experienced Long-Term Care Insurance specialist will understand these underwriting rules when helping you select the best company and policy options.
You can find a trusted and qualified specialist representing the major insurance companies that offer these products by clicking here.
Find the current and future cost of long-term care services where you live, along with the availability of partnership plans and tax incentives - Cost of Care Calculator - Choose Your State | LTC News
Keep in mind, numerous state and federal regulations impact Long-Term Care Insurance. Each state's department of insurance regulates premiums. Because of regulation, an insurance agent or financial advisor cannot give a consumer a special discount which is not available otherwise.
There are more similarities than differences when it comes to features and benefits. However, options and benefits do vary from company to company. Premiums can vary between companies by over 100% when comparing equal benefits.
Be sure to seek the assistance of a qualified Long-Term Care Specialist to compare the features, benefits, and costs of each policy.
Since your health is a primary consideration in determining your eligibility for coverage, it is always best to start planning before retirement when health is usually better. An experienced Long-Term Care Specialist will ask you several questions about your health to provide you with accurate quotes and professional recommendations.
Please note: Since every company has different underwriting rules, you could be eligible for coverage with one company and not another.
Because Long-Term Care Insurance is custom-designed, you can design the plan to fit your specific needs, concerns, and budget. A specialist will help you develop your plan to address your concerns. Generally, you can design a plan to meet some or all of these common goals:
- Safeguard income and savings
- Protect the lifestyle of your spouse/partner
- Provide options for quality care
- Reduce the stress and burdens otherwise placed on family members
- Give your adult children time to be family
- Provide a legacy for loved ones
State variations may apply.