What is a LTC-Benefit Account A Long-Term Care Benefit Account is a bank-trust account funded by a LTC-Life Settlement set up to make monthly payments towards any form of senior living and long-term care services the owner wants. Any form of medical and long-term care is covered including: home care, assisted living, skilled nursing care, memory care and hospice. The LTC-Benefit Account is not long-term care insurance or an annuity, and an insurance company does not issue it. It is a bank trust account similar to a Health Savings Account (HSA), and there are no wait periods and no claims to file; the account is ready to start making payments towards care as soon it is funded by the LTCLife Settlement. The account is flexible so payments can start at a designated amount, and for any form of care, and then can be adjusted ongoing to meet changing care needs. The bank trust account is a no-cost, non-interest-bearing account held with Bank of Utah, a federally insured bank, based in Ogden, Utah. It is part of the Utah Bankers Association, the American Bankers Association, and the Federal Deposit Insurance Corporation. The funds realized through the LTC-Life Settlement are tax-free as defined by the HIPAA for a policy owner diagnosed as chronic or terminal (2 ADL’s or more). If the insured passes away before the funds in the account are spent-down, any remaining balance will transfer to the named account beneficiaries tax-free (if they are below the estate-tax limits). The use of the funds in the account paid towards medical expenses and long-term care are recognized as a Medicaid qualified spend down. This means that the person benefiting from the account will be private pay for as long as there are funds in the account; but once the account has been depleted, they can make an immediate transition to Medicaid. The National Association of Insurance Commissioners (NAIC) supports the use of life settlements to pay for long-term care and have specifically cited the use of an LTC-Benefit Account as an innovative consumer option. Congress introduced a bi-partisan bill into the House of Representatives to create a “Senior Health Planning Account” (SHPA) based on the LTC-Benefit Account, which would allow anyone who executes a life settlement to then shelter the proceeds tax-free in the SHPA exclusively to pay for the use of health and longterm care related expenses. LCX Life is the only company today that offers a Long-Term Care Benefit Plan.
Questions and Answers Q: What forms of long-term care qualify? A: The Benefit Account will pay the following monthly expenses directly to the health care provider: • Home Care • In-Home Nursing/Health Care • Assisted Living • Memory Care • Nursing Home • Hospice Care
Q: Is the Benefit Account like Long-Term Care Insurance A: No, they are very different. A person who would qualify to settle their policy for the Benefit Account would be an automatic decline for any form of insurance coverage. Also, there are no wait periods, claims, or limitations on forms of care or the amount that can be spent on a monthly basis from the Benefit Account. The settlement can be split between a lump-sum and what is put into the LTC-Benefit Account.
Q: Are there any fees or premiums for the Benefit Account? A: No, there are no fees associated with the Long-Term Care Benefit Account. Once a policy is settled by the owner, the LTC-Benefit payments begin immediately, and the enrollee is relieved of any responsibility to pay premiums.
Q: What happens if the enrollee dies before all of the Long-Term Care Benefits are paid out? A: Should the enrollee pass away with additional funds remaining in their LTC-Benefit Account, the remaining balance is paid directly to the enrollee’s named beneficiaries (tax-free if they are below the estate tax exemption level of $11.58M). Enrollees and/or their beneficiaries are assured to receive the full Benefit amount even if the client dies before all monthly payments have been made.
Q: Is the enrollee actually exchanging the ownership of the life insurance policy? A: Yes, the enrollee will exchange all ownership and beneficiary rights to the life insurance policy to enroll in the LTC-Benefit Account. From the moment the Account is established, it will begin making monthly payments to the selected health care provider. The enrollee is no longer responsible for premium payments, and the policy is no longer considered an asset that will count against them for future Medicaid eligibility.
Q: How is a Long-Term Care Benefit Account regulated? A: The policy transaction is specifically designed to conform to the secondary market regulations that govern life settlements; and the Benefit is administered specifically to be a Medicaid qualified spend-down of the asset proceeds. By obtaining the fair market value for the life policy, and then at the direction of the policy owner putting the funds into an irrevocable, FDIC insured bank account which can only be administered third-party to pay for Medicaid/Medicare qualified long-term care services; the LTC-Benefit Account is a regulated financial transaction, and it's a Medicaid qualified financial vehicle to help cover the costs of long-term care.
Q: How is the Long-Term Care Benefit Account safe-guarded? A: The LTC-Benefit Account is an irrevocable; FDIC insured bank trust account held by a nationally chartered Bank & Trust administered to ensure that the funds are protected and only used for the recipient of care. The account charges no fees, and it is non-interest bearing. The account also has the added protection of paying any remaining balance to a named account beneficiary.
Q: Is the Long-Term Care Benefit Account available today? A: Yes, first introduced into the market in 2007 by Life Care Funding, the Long-Term Care Benefit Account is available in all 50 states, enjoys tremendous support from political leaders across the country, is accepted by all forms of senior living and long-term care providers, and has been used to pay millions of dollars in senior care.
Q: Is the Long-Term Care Benefit Account the basis for legislation introduced in the states and Congress? A: Yes, over the last decade there has been legislative action in the states and Washington D.C. to propel forward the use of life settlements to pay for senior living and long-term care. Laws have been introduced in the states to mandate disclosure to policy owners about their legal right to a life settlement and uses for long-term care, the NAIC has endorsed life settlements to pay for long-term care, and Congress has introduced a bill to create an LTC-HSA called a Senior Health Planning Account (SHPA) to pay for long-term care funded with the tax-free funds from a life settlement.
LCX Life: LCX Life is the only Life Settlement Marketing Organization (LSMO) in the insurance industry. Our mission is to work with agents, advisors, and our IMO/BGA partners to build a network of Appointed Referral Agents who are educated and supported to offer the life settlement option to policy owners contemplating lapse or surrender. We also work with independent agents, financial advisors, lawyers, accountants, and long-term care industry service providers. With LCX Life, we can rescue thousands of policies every year, and in the process, deliver a recurring revenue stream to your organization. www.lcxlife.com