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Reasons to Avoid MassMutual’s CareChoice One

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MassMutual is a well-known insurance company offering a diverse suite of products for everyday insurance needs . They are one of the few companies that offer hybrid long-term care life insurance. “CareChoice One” is the name of their hybrid product.

Is CareChoice One Worth Considering?

Senior African American couple in a meeting with female financial advisor at home

CareChoice One offers the same type of coverage and guarantees as any other hybrid long-term care policy. It offers long-term care benefits and a death benefit, if you never need coverage, all for a guaranteed premium. It also gives you the option to get your money back if you ever change your mind.

However, CareChoice One is lacking in quality and performance in some areas. Quite frankly, its design and features fall short in a number of ways. In order for you to see if its worth considering we should compare the reasons to avoid the policy vs the reasons to consider it.

Reasons to Avoid CareChoice One

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As always, when considering any hybrid long-term care policy, it is recommended our readers familiarize themselves with the “5 things to review in every Hybrid Long-term Care Insurance Policy.”

These 5 things are essential to the makeup of a hybrid policy and its performance for your needs. The 5 things to review in every policy are:

  • LTC Benefit Amount
  • Benefit Period
  • Elimination Period
  • Inflation Protection
  • Premium Payment Options

Let’s address the following shortfalls of CareChoice One:

  1. No flexible premium payment options
  2. Extremely expensive inflation protection option
  3. Overpriced benefit coverage
  4. Lack of benefit period selection
  5. No Couples Discount

1. No Flexible Premium Payment Options

No symbol over flexible payment stamp

For starters, CareChoice One is a single premium Option Only. It offers no flexible premium payment options.

For some individuals, this is not a problem. However, not everyone is inclined to put a portion of their savings into a product all at once. Some individuals prefer to pay overtime. If that is you, then Carechoice One’s single premium option will be a red flag.

Case Study: “Nancy”

Retirement age woman doing home improvement standing in a kitchen

For example, let’s consider a case study of a lady named “Nancy.” Nancy is a 62 year-old female with $75,000 in savings that she can move into a CareChoice One policy.

However, Nancy has two problems. First, for her to get adequate coverage, she will need to place at least $100,000 into that policy.

Secondly, Nancy will be the caregiver for her father who was just diagnosed with Alzheimer’s. He has no long-term care insurance in place. Therefore, she wants to allocate a third of her savings to cover some of his expenses.

This leaves Nancy with only $50,000 to place into the CareChoice One policy for her needs.

In Nancy’s case, with no flexible premium payment options, CareChoice One would not be a favorable choice for Nancy. Nancy cannot afford to buy the coverage she needs due to CareChoice One being a “single premium payment policy” only.

Even if she didn’t need to pay for her father’s expenses, she still couldn’t afford the $100,000 premium for the coverage she needs. Hence, leaving Nancy with two options:

  1. Settle for less than her desired coverage or go without any coverage at all OR
  2. Take the risk of having a long-term care event and no insurance coverage like her father.

CareChoice One Is A Poor Option For Nancy

Retirement age woman standing in garage

If you are like Nancy, and for whatever reason cannot get and adequate policy with a single payment, than you are left with no good options if you are considering a CareChoice One policy.

You will either have to settle for less, get no policy at all, or get a CareChoice One policy and save to buy an additional hybrid long-term care policy – which makes absolutely no sense!

2. “Significantly” Expensive Inflation Protection Option

Scale price outweighing value

Inflation protection is so important to have in your policy. Unfortunately however, CareChoice One just outright drops the ball on this feature. Its inflation protection option is significantly expensive in general and compared to its competitors. Let me use another case study to explain why.

Case Study: “Frank”

Married couple sitting on couch

“Frank” is a 60 year old married male looking to get a CareChoice One policy. He wants a policy that can cover the cost of home healthcare in his home state of Texas. The median cost of home healthcare in Texas is about $46,000 a year

A CareChoice One policy with NO inflation protection to meet this need would require an $80,000 single premium deposit. This would give Frank a $244,840 long-term care benefit pool (a $5,101 maximum monthly benefit) and a 48 month benefit period.

However, as we know from history, “a dollar today is not a dollar tomorrow. The cost of care services will increase due to inflation.

Consider this point: Genworth Cost of Care Survey shows that the cost of care in an assisted living facility has almost doubled since 2004!

Therefore, the way to ensure your coverage will meet future cost of care increases is to have inflation protection added to your policy.

Realizing this, Frank requests inflation protection be added to his policy. As stated in CareChoice One’s revised illustration (which is posted below):

“If you would like to have inflation protection with an initial LTC Benefit Pool of $244,840, you will need to purchase a substantially larger policy with a significantly higher premium.

CareChoice One Revised Illustration (Narrative Summary Inflation Protection Paragraph 3)

Here is a copy of the revised illustration page we are referencing:

Better Options For Frank Than CareChoice One

Hand writing the text: Price x Value

So for Frank to get the same level of coverage with inflation protection, it would cost Frank $271,000 – that’s over 3 times the amount of his original deposit!

However, Frank can get the same amount of coverage and inflation protection from Lincoln’s MoneyGuard II for $109,228!

That’s a cost savings of up to 60 percent!

Not only is CareChoice One overpriced on the inflation protection, it is also overpriced on the benefits.

3. Overpriced LTC Benefit Coverage

Value for Money chalkboard

Another reason to avoid MassMutual’s CareChoice One is due to its overpriced coverage. When we compare CareChoice One to its competitors, it is normally very high on price but very low on coverage.

Without its overpriced inflation protection, CareChoice One seems competitive. For example, for $100,000 Frank can get a Total LTC Benefit Pool of $306,000.

Here is a copy of the revised illustration reflecting this point:

However, with MoneyGuard II for example, the same $100,000 deposit will get Frank a Total LTC Benefit pool of $359,000 with no inflation protection. That’s an extra $60,000 in coverage!

That’s 120% more coverage than the CareChoice One policy.

Here is a copy of the revised illustration reflecting this point:

Other Companies Offer More Options For The Same Price

White wooden signpost/ crossroads sign with three arrows - "good", "better", "best".

In addition, here is another point which shows just how overpriced CareChoice One can be:

If you were to include the inflation protection option in the MoneyGuard II policy (which is an additional cost) Moneyguard II still works out to provide the practically same amount of LTC Coverage benefits as CareChoice One.

60 Year Old Male $100,000 Premium

Total LTC Benefit Pool
CareChoice One (No Inflation Protection)$306,050
MoneyGuard II (With Inflation Protection)$302,386

Here is a copy of the revised illustration reflecting this point:

Not only do you get over $300,000 in coverage with MoneyGuard II but you also get inflation protection. This means at age 80, for example, your Total LTC Benefit Pool will be $546,143 guaranteed!

Therefore, not only does CareChoice One “miss the mark” in its inflation protection pricing, it also “misses the mark” most importantly, in the LTC coverage pricing as well.

4. No Benefit Period Selection

Modified one way sign indicating Only Way To Go

Unlike other hybrid long-term care policies which allow you to select your benefit period, CareChoice One chooses yours for you. CareChoice One offers a 48 month benefit period ONLY.

That’s right, you cannot select a longer benefit period. Their minimum guaranteed benefit period is fixed and does not allow you to increase it.

So if you want to ensure that your guaranteed coverage will last for more than enough time, CareChoice One may not be right for you. You can’t select a higher benefit period than 48 months.

Dividends And The Benefit Period

Dividends Stock Market Investments Ticker 3d Illustration

However, this does not mean that CareChoice One does not have the potential to have a longer benefit period. As a matter of fact, once the policy is in-force, the minimum benefit period can actually increase IF the policy receives dividends.

So MassMutual, like other mutual companies, pride’s itself on being able to pay its policyholders dividends. Therefore, with CareChoice One, it gives policyholders to receive their dividends in the form of “paid-up additions.”

Without getting too technical, paid-up additions basically help increase the Total LTC Benefit Pool. Although the Total LTC Benefit Pool increases, CareChoice One does not increase your monthly maximum LTC benefit. It remains the same. Therefore this will cause your benefit period to be lengthened.

Example of Dividends Increasing Benefit Period

Hand drawing growing Dividends investment business graph with blue marker on transparent wipe board.

So, for example, let’s say your initial LTC Benefit Pool is $300,000 and your maximum monthly benefit is $6,000 for the minimum guaranteed benefit period of 48 months.

Let’s also say MassMutual has done well and has paid dividends into your policy for the last 25 years thus increasing your Total LTC Benefit Pool to $400,000.

If the Total LTC Benefit Pool increased but the maximum monthly benefit remains the same at $6,000 then the benefit period will increase. The best way to understand this is dividing 300k / 6k and 400k / 6k. The 400,000 will reflect a longer minimum benefit period.

Here is a revised illustration reflecting this point:

However Dividends Are NOT Guaranteed

The word Risk on a thin rope

Either way, as nice as “your benefit period increases due to dividends while your policy in in-force” sounds it missing one point. Dividends are NOT Guaranteed.

Although MassMutual has been paying dividends consistently for the last 151 years, they are not guaranteed and the future is always unpredictable. A company that is doing well today can sink tomorrow.

Therefore I would not “bank” on the idea of increasing my benefit period over the years with dividends knowing full well that they are not guaranteed.

You are better off getting one of CareChoice One’s competitor’s policy that will guarantee your benefit period up front. One that offers a benefit period over 48 months.

5. No Couples Discount

Senior marriage spreading their arms

Lastly, another shortfall of CareChoice One is that it does not offer you a couples discount. Many CareChoice One competitors offer a couples discount on their policies.

This discount can offer at least 5% savings on you policy. With hybrid long-term care insurance being priced the way it is, any form of savings is appreciated by the client.

Therefore if CareChoice One cannot offer you a discount for being married while similar products do, it makes CareChoice One less competitive for you as the consumer. CareChoice One is not only costly, it also offers no savings to you in any form.

Reasons To Consider CareChoice One

A clipboard

There is only one reason I can think of to consider CareChoice One and its not even related to long-term care insurance. My reason why someone should consider is actually due to its potential as a life insurance policy.

As we know, hybrid long-term care insurance is a life insurance policy with a qualified long-term care insurance rider. CareChoice One, although underwhelming on long-term care insurance, performs pretty well on the life insurance side. This is especially true when dividends are involved.

As a life insurance policy, CareChoice One has the potential to offer a significant death benefit IF the policy is receiving consistent dividends in the form of paid-up additions.

For example, a $100,000 premium deposit from a 60 year old male can double to over $230,000 in death benefit after 20 years of receiving dividends.

Here is a copy of the revised illustration reflecting this point:

Nevertheless, the only reason you should be considering CareChoice One is for its long-term care coverage. Therefore, since my reason to consider CareChoice One is not even long-term care related, CareChoice One doesn’t leave us with much to consider at all.

Conclusion – CareChoice One “Misses The Mark”

3d render of multiple arrows missing target

As we can see, CareChoice One does not give us much to consider as a hybrid long-term care insurance option. Instead, it gives us many reasons to disregard it as an option.

After a thorough review of what this policy does, and more importantly, does Not offer, it is safe to conclude that CareChoice One is not worth considering. Although MassMutual is known as a financially strong insurance company offering quality insurance products, CareChoice One does not live up to the expectation.

Contact Us

If you are or were considering CareChoice One as a possible option, I would strongly recommend considering some other hybrid long-term care insurance products that may be available to you. We can assist you with your options.

Feel free to call us today at (800) 498-3955 or Get A Free No Obligation Quote by clicking the button below!

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