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.
When comparing long-term care insurance, you should recognize the differences between Brighthouse Financial and other companies.
Brighthouse Financial was established in 2017 by MetLife as a separate entity. MetLife will continue to sell insurance products to employer groups, while Brighthouse will focus on individuals living in the United States. MetLife owns 20% of Brighthouse, with Brighthouse being otherwise a separate company.
The Brighthouse SmartCare plan is a "hybrid' policy that pays 100% of the long-term care benefit in cash. You enjoy both a tax-free life insurance death benefit along with tax-free long-term care benefits. If you are looking for a hybrid, experts recommend limiting your review to those that meet the federal regulations for Long-Term Care Insurance.
This policy is a combination of a life insurance policy with comprehensive benefits for long-term care services and supports. Brighthouse SmartCare's premium can be paid with one single premium or guaranteed premium that can NEVER increase.
The Brighthouse product is an Indexed Universal Life (IUL) policy. These have non-guaranteed elements that you should be aware of before you purchase a policy. IUL policies tend to not perform well in volatile markets and in declining or low interest rate environments.
ONE MAJOR DIFFERENCE
While the trigger for long-term care benefits is generally the same as any tax-qualified Long-Term Care policy, it adds substantial language.
The policyholder must provide proof satisfactory to Brighthouse that they are Chronically Ill and is receiving covered Qualified Long-Term Care Services under a Plan of Care prescribed by a Physician.
Chronically Ill means you require substantial assistance with at least two of the six primarily activities of daily living OR require supervision due to a cognitive impairment.
You will need two doctors - one that certifies you need care and another to develop of plan of care.
Plus, Brighthouse reserves the right to have the policyholder examined by yet another Physician, this time of their choice.
There are two types of these policies. A qualified Long-Term Care Insurance contract is defined under IRS regulations § 7702B(b)(1) as any insurance contract that meets the guidelines set by the Internal Revenue Service.
The Brighthouse plan is considered a 7702B policy.
The other type of combination life insurance with benefits to pay for some extended care services are regulated under Section 101g. Federal law prohibits insurance companies from marketing these policies as "long term care" policies.
With "hybrid" policies, you have guaranteed benefits for long-term care, death, or both. Brighthouse gives you access to your money as well in three ways:
- You require long-term care services. You receive tax-free cash benefits to pay for all levels and types of long-term care either at home or in a facility of your choice. The traditional trigger for benefits is the same as any conventional Long-Term Care Insurance policy. Because this is a qualified Long-Term Care policy, you do not need to have a "terminal" health condition to trigger the benefit, in addition to your need for extended care.
- You die. Like any life insurance policy, when you die, you get a tax-free death benefit.
- You change your mind. you have a limited return of some of the premium.
Brighthouse SmartCare Features and Benefits
- An accelerated death benefit in two years or extended long-term care benefit period of 4 or 6 years
- Inflation options - none, 5% compound or market indexed
- Pay one single premium or in 2, 3 4, or 5 years
- Terminal illness benefit allows you to obtain 50% of the death benefit in advance
- 90-day elimination period
- Both long-term care and death benefits are tax-free
Since Brighthouse is a hybrid policy and not a traditional long-term care policy, it will not qualify as a partnership policy under state and federal law.
Find 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.
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.
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.
Be sure to seek the assistance of a qualified Long-Term Care Specialist to compare the features, benefits, and costs of each policy. You can find a trusted and qualified specialist representing the major insurance companies that offer these products by clicking here.
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.