New York Life and AARP Long-Term Care Insurance Review

New York Life Insurance Company is the third-largest life insurance company in the United States and the country's largest mutual life insurance company. The company has outstanding financial ratings and has maintained a solid reputation since 1841.

The company's core product is whole life insurance, although New York Life offers multiple Long-Term Care Insurance options, including one with a sponsored endorsement with AARP.

The AARP-endorsed New York Life Long-Term Care Insurance plan is available to AARP members who are health eligible for the program. New York Life pays a royalty fee to AARP for the use of its intellectual property, and these fees are used for the general purposes of AARP.

New York Life - An Expensive LTC Insurance Option

New York Life has one of the most expensive Long-Term Care Insurance options available. While they offer the possibility of earning plan dividends, it is improbable ever to offset the high premium. 

Because of the high cost of the policy, some advisors design plans without crucial features like inflation benefits or include benefit increases that increase the premium regularly. 

The company has three traditional Long-Term Care Insurance products and asset-based "hybrid" options. These products are only offered through captive agents who work for New York Life.

Otherwise, the policy features and benefits compare well with all the leading companies. Plus, New York Life is a highly rated and well-respected insurance company.

Like any other Long-Term Care Insurance product, premiums are calculated based on the benefits and options you select at the time of application. This calculation includes your age, health, gender, tobacco use, and other factors.

Features and Benefits with New York Life Long-Term Care

(both Secure Care and AARP Plan)

• Partnership

• Daily Benefits from $50 to $400 a day

• Option for Monthly Home Care Benefit

• Shared Care Benefit featuring a third pool of money

• Return of Premium Minus Claims

• Five different Inflation options, including 3% simple, 3% compound, 5% compound, increases based on the Consumer Product Index (CPI), and options to buy additional benefits based on CPI

• Three elimination periods – 90, 180, or 365 days

• Caregiver training

• Home modifications

• International benefits - pays for care outside the United States, up to 100 times the facility services daily benefit.

• Alternate plan of care - this allows the policyholder to request benefits or services not listed in the policy, per the company's approval

"My Care"

"My Care" is New York Life's third traditional Long-Term Care product. The two significant differences in this product are the use of "deductibles" instead of elimination period days and an 80/20 co-insurance built in.

Most Long-Term Care Insurance policies use "elimination periods," which are once-in-a-lifetime deductibles based on days, not dollars. Many companies use calendar days, not dates of service, so you would be eating your deductible days with little or no costs in some situations. However, there are no elimination periods with "My Care," but there are cash deductibles. 

Deductibles range from $4,500 to $21,000 of incurred costs, and the deductible also GROWS with inflation. The 80/20 co-insurance means the policy pays only 80 percent up to the monthly benefit. 

For example, you have a $5000 monthly benefit, and your bills are $5000 – the policy will pay up to $4000 after the deductible. 

Inflation Benefits - Be Careful

The biggest downside of New York Life is the cost making it non-competitive with most other products. The inflation options are part of what makes NY Life non-competitive and often undesirable for most consumers. 

Remember, New York Life is typically sold without guaranteed inflation (like 3% compounded) because of the very high cost. Generally, agents or advisors recommend the company's future purchase options (or no inflation at all) since the price is much lower without guaranteed inflation benefits. However, these options stop at age 70 and are not available at the time of claim. Plus, NY Life charges for the extra purchased benefit at your attained age – so the premium increases each time you purchase and gets more expensive over time. 

"Guaranteed Purchase Options," "Future Purchase Options," or "CPI Offers" should not be confused with automatic inflation protection. The New York Life purchase option is called "CPI Offer." The policyholder would have the option to buy more coverage based on the Consumer Product Index. If the policyholder accepts the offer, it will increase the premium with every option exercised. The policyholder would be buying an increasing premium Long-Term Care Insurance policy. Plus, the offer is not available once you start receiving benefits.

If the policyholder continues to purchase additional benefits to keep up with the increasing cost of long-term health care, they will inevitably be paying more in premium over time had the policyholder started with the automatic inflation option.

An automatic inflation protection option will be the best option for most consumers.

Dividends

Note, New York Life agents talk about dividends. They have only awarded dividends once with Long-Term Care Insurance. Don't depend on future dividends to ever come close to paying back the cost differences between New York Life and other companies. 

Claims

If you own a New York Life Long-Term Care policy and seek help submitting a claim, LTC NEWS offers free - no-obligation assistance - including help finding quality caregivers and facilities. Since most agents have little or no experience in this area, this assistance can be beneficial for the entire family - Filing a Long-Term Care Insurance Claim.

Federal Regulation and Consumer Protections

All Long-Term Care Insurance contracts are regulated under IRS regulations §7702B(b). Any insurance contract that meets the guidelines set by the Internal Revenue Service is considered long-term care. All insurance products that meet these federal guidelines contain consumer protections and regulated benefit triggers, in addition to tax advantages.

New York Life's Long-Term Care Insurance products meet federal guidelines. 

Partnership

New York Life offers Partnership Long-Term Care Insurance policies in available partnership states. Partnership policies provide additional dollar-for-dollar asset protection. Remember, asset-based "hybrid" products are not partnership certified.

• What is a Long-Term Care Partnership Policy?

Find State-Specific Information

Each state has a state-specific page that includes the current and future cost of long-term care services, available tax incentives, information on care providers, and other important information - LTC NEWS Cost of Care Calculator.

Shopping for Long-Term Care Insurance?

When shopping for Long-Term Care Insurance coverage, remember that numerous state and federal regulations impact Long-Term Care Insurance. Each state's department of insurance regulates products and premiums. Because of regulation, an insurance agent, agency, or financial advisor cannot give a consumer a special discount that is not available otherwise. 

Remember, New York Life products are only offered by captive agents.

Use all the tools and resources available on LTC NEWS to help you in your research - Resources for Long-Term Care Planning.

There are more similarities than differences when it comes to features and benefits. However, options and benefits vary from company to company, and premiums can vary between companies by over 100% when comparing equal benefits.

Underwriting

Long-Term Care Insurance is medically underwritten, and every company has underwriting rules that determine insurability and rate class. An experienced Long-Term Care Insurance specialist will understand these underwriting rules when helping you select the best company and policy options.

What is Underwriting? How Does Current Health Impact Ability to Obtain Long-Term Care Insurance?

New York Life underwriting is considered "moderately conservative" compared to other insurance companies. The company offers three rate classes, preferred, select-standard, and standard.

The company's preferred rate is very broad. It includes health issues other companies would place into a more traditional "standard" rate. The effect of this means there is no discount for having excellent health. 

On the other hand, New York Life's "select-standard" and "standard" rates have even broader underwriting criteria at an even higher cost. The company's "standard" rate is more comparable to a "sub-standard" rate with other companies, and, in addition to being very expensive, it reduces the percentage of benefits available for in-home care to 80%.

A Long-Term Care Insurance specialist can assist you in determining insurability and which rate class you would likely fall into.

Be sure to discuss your pre-existing health issues with a specialist, agent, or advisor before applying with New York Life. Make sure they are quoting the correct underwriting rate class.

Comparing LTC Insurance Products

Since your health is a primary consideration in determining your eligibility for coverage, it is always best to start planning before retirement when health is usually better. An experienced Long-Term Care Insurance specialist will ask several questions about your health to provide accurate quotes and professional recommendations.

Please note: Since every company has different underwriting rules, you could be eligible for coverage with one company and not another.

When comparing Long-Term Care Insurance, you should understand the differences between New York Life and other companies. 

There are variations between the policy language and benefits between the many companies that offer Long-Term Care Insurance; however, the primary features and benefit choices are comparable from company to company. 

Premiums and underwriting criteria vary dramatically between insurance companies. 

State variations may apply.