Brighthouse Financial is a relative newcomer to asset-based 'hybrid' long-term care solutions. However, their connection to MetLife gives them inherited experience in this area.
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 understand the differences between Brighthouse Financial and other companies.
Connection with MetLife
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 a separate company.
Financial Strength Ratings are strong for Brighthouse with AM Best - A, and Standard and Poors - A+.
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.
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.
The Brighthouse policy meets 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.
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 not to 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 additional language.
The policyholder must prove satisfactory to Brighthouse that they are Chronically Ill and are 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 the plan of care.
Plus, Brighthouse reserves the right to have the policyholder examined by yet another Physician, this time of their choice.
With "hybrid" policies, you are guaranteed to receive benefits for long-term care, death, or both. You have access to your money as well in three ways:
- You require long-term care services. You receive tax-free 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 traditional Long-Term Care Insurance policy. Because this is a true Long-Term Care policy, you do not need to have a 'permanent or "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. If for any reason, you need money, you can receive the cash surrender value. While very few people will ever consider doing that, it gives many people additional peace-of-mind, knowing you have access to the money in the policy.
The Brighthouse policy's premium can be paid with a single premium or guaranteed premium payments over a period of time that can NEVER increase.
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
- Pays full cash benefit at the time of claim
- International benefits - full benefits anywhere in the world
- 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
When you select the indexed benefit increase, your benefits increase based on the S&P 500. Benefits could decrease, but never below your initial benefit level. At the time of claim, your benefits are frozen from that point. Remaining benefits no longer increase.
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.
Brighthouse offers a hybrid policy and is not traditional long-term care insurance; it will not qualify as a partnership policy under state and federal law.
You can learn more about the federal/state partnership program and other state-specific information on long-term care by finding your state on the LTC NEWS Cost of Care Calculator.
Find State-Specific Information
You can learn more about the federal/state partnership program by going to the LTC NEWS Cost of Calculator. Each state has a state-specific page that includes the current and future cost of long-term care services, available tax incentives, information on care providers, and other important information - Cost of Care Calculator - Choose Your State | LTC News.
If you own a Brighthouse 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, and claims with Brighthouse could be more complicated, this assistance can be beneficial for the entire family - Filing a Long-Term Care Insurance Claim | LTC News
Shopping for Long-Term Care Insurance?
When shopping for Long-Term Care Insurance coverage, keep in mind, numerous state and federal regulations impact Long-Term Care Insurance. Each state's department of insurance regulates products and premiums. Because of regulation, an insurance agent, agency, or financial advisor cannot give a consumer a special discount that is not available otherwise.
Be sure to use all the tools and resources available on LTC NEWS to help you in your research - Resources for Long-Term Care Planning | LTC News.
There are more similarities than differences when it comes to features and benefits. However, options and benefits vary from company to company, and premiums can vary between companies by over 100% when comparing equal benefits.
Long-Term Care Insurance is medically underwritten, and 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 - Work With a Specialist | LTC News.
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 Insurance 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.