Since 1905, Lincoln Financial has provided life insurance to many Americans. Today, Lincoln Financial Group not only provides life insurance but long-term care protection as well. Their Hybrid Long-term Care – Life insurance product is called “MoneyGuard II.”
What is MoneyGuard II?
MoneyGuard II is a universal life insurance policy with a qualified long-term care insurance rider. This hybrid LTC-Life insurance product provides multiple benefits to the insured:
- In the event they need long-term care, it provides long-term care coverage
- If they never need long-term care, their beneficiaries can receive a death benefit
- If they ever change their mind, they can receive a return of premium
Using a portion of your savings, MoneyGuard II can provide you the added flexibility for planning for long-term care needs.
How Does MoneyGuard II Work?
MoneyGuard II works by accelerating the death benefit. This means the death benefit is paid out as a living benefit for qualified long-term care expenses on the insured.
In addition, it offers a Long-term Care Extension of Benefits Rider which extends long-term care benefits beyond the accelerated death benefit.
Altogether, you can select up to 7 years of LTC benefits & protection with MoneyGuard II!
What LTC Services Are Covered By MoneyGuard II
MoneyGuard II can cover multiple LTC services. Services include:
- Adult Day Care
- Assisted Living
- Home Healthcare
- Hospice Care
- Nursing Home Care
With MoneyGuard II, you are able to select from a variety of care options. Additional benefits, such as bed reservation benefits and international benefits are provided by the policy as well.
(May Vary by State)
How Can I Qualify for Money Guard II
In order to apply for this policy, you must be between the ages of 40-79. The application process for MoneyGuard II has streamlined underwriting with no medical exams or lab tests required.
Additionally, there are two rates classes: Standard & Couples Discount. A couples discount will apply based on your marital status at the time of issue only.
Let’s breakdown & review MoneyGuard II even more!
A Breakdown of Lincoln Financial’s MoneyGuard-II
Lincoln Financial is one of the few insurance companies that offers a hybrid long-term care life insurance product. Again, MoneyGuard II provides long-term care benefits with a return of premium option or a death benefit in the event you never need care.
(If you want a more in-depth explanation of how hybrid long-term care policies work & their benefits, read our post “What is Hybrid Long-term Care Insurance?”)
Now, in order for you to consider any hybrid LTC policy, you must familiarize yourself with the 5 things that affect the quality of any hybrid LTC policy.
Here are the 5 things:
- Long-term Care Benefits
- The Benefit Period
- Inflation Protection Options
- Elimination Period
- Premium Payment Options
In our review today, we will take a look at how MoneyGuard II compares to its competitors using those 5 factors.
(For a description of each factor and how it affects a hybrid LTC policy, feel free to read “5 Things to Consider When Choosing a Hybrid LTC Policy.”)
First, let’s discuss some of the key features of Lincoln Financial’s MoneyGuard II before we see how it compares to its competitors
No Elimination Period
A key feature of MoneyGuard II is its elimination period. An elimination period of 90 days is generally standard when it comes to hybrid long-term care insurance.
Lincoln Financial’s MoneyGuard II, however, has NO elimination period. Benefits are payable on the first day of care for eligible claims.
This is great because there is huge cost savings for the policy owner when there is no elimination period. Let’s take a closer look why.
No Elimination Period Means Cost Savings
For example, the annual median cost of a private room in a nursing home is $78,475 in the state of Texas. That’s a cost of about $215 a day. If you had a 90-day elimination period, you would have to pay $20,000 out-of-pocket over 90 days before you can receive benefits!
(This money is not reimbursed and there is no retroactive payment of benefits for those 90 days.)
With Lincoln’s MoneyGuard II, however, you would be receiving benefits from the first day you become eligible! You would not have to pay the additional $20,000 before you receive your long-term care benefits.
Now let’s move on to how MoneyGuard II compares to other hybrid LTC products in the marketplace.
Comparison to other Hybrid LTC Products (SecureCare)
For our comparison, we will compare Lincoln Financial’s MoneyGuard II to Minnesota Life’s (Securian) SecureCare.
Lincoln Financial’s MoneyGuard II and Minnesota Life’s SecureCare are both very competitive products. They are two of the strongest products on the hybrid long-term care insurance market.
Using our list of “5 things to consider,” we’re going to look at the long-term care benefit pools and the elimination periods for both of these products. In addition, we will examine their return of premium options and how they pay benefits during claims.
Our comparison will be based on a 60 year old male looking to buy a hybrid LTC policy with a $100,000 single premium from both companies.
MoneyGuard II offers standard benefit periods & inflation protection options. For our comparison, both policies will be designed to offer a 6-year benefit period with 3% compound interest inflation protection.
Below are the illustrations from Lincoln Financial and Minnesota Life reflecting what they can offer this 60 year old Texas male:
(Click the illustration for a larger view. Information for comparison is underlined in red)
Comparison: LTC Benefit Amount and Elimination Period
Based on the illustrations, the first thing we can compare is the LTC benefits:
- The first day maximum monthly benefit of Lincoln Financial’s MoneyGuard II is $5,219
- The first day maximum monthly benefit of Minnesota Life’s SecureCare is $4,876
So from the start MoneyGuard II offers a better day one benefit amount. Their benefit amount from day one is $400 more than SecureCare’s benefit amount.
In addition, 20 years later at age 80, MoneyGuard II continues to offer more benefits than SecureCare:
- At year 20, the maximum monthly LTC benefit amount for MoneyGuard II is $9,425.
- At year 20 the maximum monthly LTC benefit amount for SecureCare is $8,806.
That is now $600 in additional monthly benefits that MoneyGuard II offers over SecureCare.
Now lets compare their elimination periods:
- SecureCare requires a 90 day elimination period to be met in which no long-term care benefits will be paid.
- MoneyGuard II, however, requires no elimination period.
As stated earlier, no elimination period can result in a cost savings of thousands of dollars!
Comparison- Return of Premium Options
So far MoneyGuard II is performs well against its competitors. However, there is something else to be compared – the Return of Premium option.
Both illustrations reflect the least possible return of premium options. This is done in order to display the maximum LTC benefit each company will offer you.
Here are their least possible Return of Premium Options:
- Lincoln Financial’s MoneyGuard II least return of premium option is a built-in 80% return of premium option from day one.
- Minnesota Life’s SecureCare least return of premium option is a 100% return of premium with a 6 year vesting schedule before you receive a full refund.
MoneyGuard II will offer you 80% of your premium from day one. However, SecureCare will offer you a full return of premium at the end of year 6.
MoneyGuard II does offer a %100 return of premium option similar SecureCare but it would reduce your LTC benefit amount. It would actually make the LTC benefit amount almost equal to SecureCare’s benefit amount.
Comparison – Reimbursement Vs. Indemnity
Now let’s compare how MoneyGuard II pays benefits vs. its competitor.
There are two ways benefits are paid for claims – reimbursement & indemnity.
- Lincoln Financial’s MoneyGuard II is a reimbursement policy.
- Minnesota Life’s SecureCare is an indemnity policy.
A reimbursement policy, like MoneyGuard II, pays benefits to you or a long-term care facility. This is done after submission of bills or receipts for long-term care expenses you incurred.
An indemnity policy, however, gives the policy owner a set dollar amount check from their policy benefits. There is no need for submission of bills or receipts reflecting long-term care expenses incurred.
So the question for someone comparing these policies is, “Which is better – Reimbursement or Indemnity?”
Here’s the answer: “It all depends on what you find more suitable for your needs!”
The Pros & Cons of Reimbursement & Indemnity
Let’s say for example if you were diagnosed with Alzheimer’s and need LTC services. In such a situation, you would need a power of attorney as you are incapable of handling your affairs.
Here are the pros & cons of reimbursement & indemnity in such a situation:
|A reimbursement policy provides peace of mind by ensuring benefits are being used solely for your long-term care. It protects against the misuse of policy benefits.||There is no room for flexibility. Benefits can ONLY be received based on qualifying expenses according to your policy.|
|An indemnity policy offers the policy owner flexibility. Benefits can be used for long-term care services or for any additional needs.||It becomes HARD to ensure benefits are being used for your care. Unfortunately, many seniors get taken advantage of financially in our society. Sometimes it is their own loved ones mistreating them.|
Whether you want a policy that pays benefits reimbursement style or indemnity style all depends on you. You must determine what’s more suitable for your needs.
(Note: Some industry experts like indemnity benefits because you can pay a loved one to be your caregiver. HOWEVER, that is not a selling point we support. The point of long-term care planning is to relieve your loved ones from the all-consuming burden of being your caregiver. It is not to give them the option to do so – even if you can afford to pay them.)
Conclusion- MoneyGuard II is a Quality Product
From our review and comparison of Lincoln Financial Group’s MoneyGuard II we find that MoneyGuard II is a quality hybrid LTC product.
Here’s what it offers:
- Very strong long-term care benefits
- No elimination period resulting in huge cost savings
- Standard benefit periods & inflation protection
- Reasonable return of premium options
- Reimbursement payment of benefits that can make sense for the right person
Honestly, overall MoneyGuard II does well across the board!
If an individual is considering a Hybrid Long-term Care policy, Lincoln Financial’s MoneyGuard II is worth considering.
If you are interested in MoneyGuard II or you are looking to plan for long-term care in general, reach out to us now! Request a Free No Obligation Consultation or give us a call to start the conversation today!Get Your Free Consultation