The owner of a policy has the legal property ownership rights to convert a policy based on its fair market value

A policy owner’s legal right to convert an existing life insurance policy into a long term care benefit plan, also known as an Assurance Benefit Plan, is not to be confused with a long term care insurance policy, accelerated death benefit (ADB) rider, annuity, or a hybrid life/LTCi product. This Long Term Care Benefit conversion option allows for the actual private market exchange of a life insurance policy for a long term care benefit plan at the time of care. Any form of life insurance can qualify for conversion: universal life, whole life, term life, and group life. The benefit plan will pay for any form of long term care: home health, assisted living, and nursing home care.

The Long Term Care Benefit plan is a private market funding option and is not issued by a carrier, not restricted to polices that contain a conversion or accelerated death benefit rider, and is not restricted to the issuing carrier. Unlike long term care insurance, there are no wait periods to receive Long Term Care Benefit payments. Once a policy is converted by the owner, the long term care benefit payments begin immediately and the enrollee is relieved of any responsibility to pay any more premiums. The Long Term Care Benefit plan is an irrevocable long term care funding account administered by a third party ensuring the funds are protected for the recipient of care, and the payments are made every month directly to the care provider. Every Assurance Benefit account also has the added protection for the enrollee of providing a final expense benefit to help cover funeral expenses. Lastly, if the insured should pass away before the benefit amount is exhausted, then any remaining balance is paid to the family or named beneficiary as a final lump sum payment.

Visit our White Paper: The Growing Use of Life Insurance Policy Conversions