Life Care Funding has been a Senior Care Rights advocate for years fighting to make sure seniors know they have the right to use a life insurance policy to pay for Elder Care services 

Life Care Funding was founded with the sole purpose of helping seniors remain financially independent so they can choose the form and setting of elder care services they want.  Whether it is Private-Duty Homecare, Assisted Living, Nursing Home Care, Memory Care, or Hospice Care; seniors have the legal right to convert a life insurance policy into a Life Care Benefit Plan to cover the costs of any form of care. We will work hard to insure your senior care rights.

For years, seniors have needlessly abandoned life insurance policies in the final years of their lives because they either can no longer afford the premium payments and/or they are looking at eventually qualifying for Medicaid.  Life insurance is a dis-qualifying asset for Medicaid eligibility which must either be surrendered or it is subject to probate recovery action by the state to claw back funds spent on care out of an eventual death benefit.  88% of life insurance policies will either lapse or be surrendered before ever paying out a death benefit.

It is the legal right of every life insurance policy owner to convert their life insurance into a Benefit Plan to pay for elder care services.  The Supreme Court ruled over 100 years ago that life insurance is personal property and the owner has the same property ownership rights with a policy as they do a home or any other asset.  A homeowner would not abandon their home for nothing in return and the owner of a life insurance policy does not need to either.  A policy owner has numerous guaranteed rights for the use of their policy including changing the beneficiary, using it as collateral, selling it, or converting the policy into a Long Term Care Benefit.

The Supreme Court ruled over 100 years ago that life insurance is personal property and the owner has the same property ownership rights with a policy as they do a home or any other asset.

Life Insurance policy owners have been in the dark for years that a policy can be sold and converted to pay for senior care services.  Life Care Funding clearly saw this unfair lack of information for seniors and launched the Life Care Benefit in response.  Our mission is to give seniors an alternative to lapsing or surrendering a policy and going straight onto Medicaid.  Seniors don’t want to become a ward of the state and go onto Medicaid.  We knew we could help seniors in a time of difficulty maintain financial independence and dignity when it comes to making Elder Care decisions.  We also knew that by delaying the time before a person would go onto Medicaid, we would be helping tax payers save money and states struggling with ballooning Medicaid budgets.

In 2010, the National Conference of Insurance Legislators (NCOIL) unanimously passed the Life Insurance Consumer Disclosure Model Law endorsing the conversion of a life insurance policy into a Long-Term Care Benefit Plan.  This national body of state legislative leaders instituted a consumer protection law to help seniors who abandon billions of dollars’ worth of life insurance receive information about their legal rights with a policy and that they can convert a life policy into a Long-Term Care Benefit. Read more about the Life Insurance Consumer Disclosure Model Law – here.

By 2013, as many as 10 states had legislatively endorsed the conversion of a life insurance policy through a “Medicaid Life Settlement” into a Life Care Benefit or Long-Term Care Benefit Plan.  The goal of this new law is to make sure consumers are informed of their legal right to convert policies to pay for eldercare services by mandating that Medicaid department notify and educate citizens.  The law also endorses a specific Long-Term Care Benefit Plan structure based on Life Care Funding’s irrevocable; FDIC insured Benefit Plan to protect the seniors’ money and make sure it is only spent on Senior Care services.In June 2013, Texas was the first state in the nation to pass this law endorsing “Medicaid Life Settlements” converting life insurance into a Medicaid qualified Long-Term Care Benefit Plan. The enactment of this new consumer protection law prompted Moody’s Investor Service to issue a “credit negative” rating in their most recent Moody’s Credit Outlook Report (June, 2013) analyzing the financial implications of current events.

 This will result in life insurers ultimately paying death benefits to investors instead of a much smaller surrender value amount to policyholders. 

According to the Moody’s report: The law is credit negative for life insurance companies because the state’s endorsement and potential expansion of life settlements will pressure life insurers’ profitability as life settlements keep in force policies that would otherwise have been surrendered.  This will result in life insurers ultimately paying death benefits to investors instead of a much smaller surrender value amount to policyholders.  With similar bills in seven other states pending, an expansion of life settlements on a large scale would produce fewer lapses and more covered deaths than life insurers originally priced for, hurting their profitability.

According to the Wall Street Journal article, States Ease Use of Life Policies to Pay for Elder Care (June 17, 2013): State lawmakers are encouraging elderly residents to use life insurance as a way to pay for long-term care—and lower the Medicaid tab in the process. Texas Gov. Rick Perry signed a law that gives state Medicaid officials the authority to tell people applying for help they can sell long-held life-insurance policies to a third party to pay for custodial health care of their choice. Those who do so would remain eligible for Medicaid when those funds run out. The states hope to stop people from dropping their life-insurance policies in order to qualify for Medicaid. To keep policy owners from spending settlements frivolously, the bills generally require that the money go straight to an irrevocable bank account used solely to pay for long-term care.  In most cases, there is nothing to prevent life-insurance owners from selling their policies now to pay for long-term care, but the new laws will help publicize and regulate the strategy. “This focuses on middle-class policyholders with coverage worth $100,000 on average,” said Chris Orestis, chief executive of Life Care Funding LLC of Portland, Maine. “They’re not wealthy enough to pay for long-term care for a long time, and they’re not poor enough to qualify for Medicaid right away.”

 “This focuses on middle-class policyholders with coverage worth $100,000 on average,” said Chris Orestis, chief executive of Life Care Funding LLC of Portland, Maine. “They’re not wealthy enough to pay for long-term care for a long time, and they’re not poor enough to qualify for Medicaid right away.”

Life Care Funding CEO spoke more about the importance of informing seniors of their legal right to convert a life policy to pay for elder care services in a follow up Wall Street Journal article, New State Law Threatens Insurers (June 27, 2013): ”Seniors have been abandoning policies needlessly, and the insurance companies have been benefiting at the expense of the policy owners and taxpayers who have been picking up the tab with Medicaid to cover long-term-care costs,” says Chris Orestis, chief executive of Life Care Funding of Portland, Maine.  “Now that the word is really starting to spread, more seniors will understand they have this option to help them, and it is a much better option than abandoning their life policies to go on to Medicaid,” he adds.

Legislative action taken up by national groups like NCOIL and introduced as laws in states across the country, national media attention from news outlets such as the Wall Street Journal, and the most recent Moody’s negative credit rating report all point to an important new dynamic: less and less policies will be lapsed or surrendered as seniors and their families learn that life insurance policies they have been abandoning for decades could instead be converted into a Benefit to pay for senior care and delay their need to go onto Medicaid.  More and more seniors who have paid premiums for years will learn that they have always had the right to convert a death benefit into a living benefit so that they can use the policy’s present day value to help pay for elder care expenses.  This means less policies will be abandoned, but what might be lost in insurance profits will be more than made up for by a true public good for seniors and their families struggling with the costs of eldercare, as well as the millions of dollars in annual savings for tax payers and relief for overly burdened state Medicaid budgets.  Over time the insurance industry will embrace the rights of policy owners to decide for themselves the best use of an asset they have been paying for over many years and help them to better understand the hidden value of a life insurance policy as a Benefit to pay for senior care.  In the meantime, Life Care Funding will continue to fight to make sure that consumers are educated about their rights as a life insurance policy owner; we will continue to tell this story in the press; we will continue to work at the grassroots level with advisors and providers of elder care services; we will continue to work with law makers to enact consumer protection laws across the United States; and Life Care Funding will continue to work with seniors and their families day-in and day-out to help them pay for the costs of eldercare.

 We will continue to work with law makers to enact consumer protection laws across the United States; and Life Care Funding will continue to work with seniors and their families day-in and day-out to help them pay for the costs of Senior Care Services.