Brighthouse Financial Long-Term Care Insurance Review

Brighthouse Financial is a relative newcomer to asset-based 'hybrid' long-term care solutions. It joins several other "all cash" benefit plans in this product category. What that means is when you qualify for long-term care benefits, you get the total amount you're entitled to in cash - no matter the actual bill.

The Brighthouse connection to MetLife in the past gives them inherited expertise in this area, making the company an option to consider when planning for future long-term health care.

Connection with MetLife

Brighthouse Financial was established in 2017 by MetLife as a separate entity. MetLife continues to sell insurance products (not long-term care) to employer groups, while Brighthouse will focus on individuals living in the United States. 

MetLife owned 20% of Brighthouse, with Brighthouse being a separate company. MetLife has since divested most of those holdings in Brighthouse. 

Brighthouse Financial is now included on the FORTUNE® 500 list starting in 2019, ranking 342. Financial Strength Ratings are strong for Brighthouse with AM Best - A, and Standard and Poors - A+. The COMDEX rating is 77 (out of 100).

Indexed Universal Life (IUL) policy

The Brighthouse product is an Indexed Universal Life (IUL) policy. These have non-guaranteed elements you should be aware of before purchasing a policy. IUL policies tend not to perform well in volatile markets and in declining or low-interest rate environments.

One of the popular options is their indexed inflation option. Your long-term care benefit increases are linked to the performance of a stock market index, like the S&P 500. If the index is doing well, you receive a higher percentage increase in your long-term care benefits. However, there is a guaranteed rate, and you can never "lose" benefits.

Remember, your policy is not directly invested in the market, but they use the performance of the market to determine your inflation benefit. Your long-term care monthly benefits will potentially increase with market gains, but they fluctuate.

The indexed linked long-term care option is one of three available options that Brighthouse will offer you when you design your policy. The policy has guaranteed long-term care inflation option of 5% compound inflation, a no inflation option, plus the indexed inflation method.

ONE MAJOR DIFFERENCE

While the trigger for long-term care benefits is generally the same as any tax-qualified Long-Term Care policy, it adds substantial additional language. The policyholder must prove satisfactory to Brighthouse that they are Chronically Ill and are receiving covered qualified long-term care services under a plan of care prescribed by a physician. 

'Chronically Ill' means you require substantial assistance with at least two of the six primary activities of daily living OR require supervision due to cognitive impairment. You will need two doctors - one that certifies you need care and another to develop the care plan.

Plus, Brighthouse reserves the right to have the policyholder examined by yet another Physician, this time of their choice.

The reality is this is not expected to adversely impact claims - but it could increase the time to get a claim approved. Having a specialist or some other help at the time of claim will reduce the time to it takes to process a claim.

Guaranteed Benefits 

With "hybrid" policies, you are guaranteed to receive benefits for long-term care, death, or both. You have access to your money as well in three ways:

• You require long-term care services - You receive tax-free benefits to pay for all levels and types of long-term health care, either at home or in a facility of your choice. The traditional trigger for benefits is the same as any traditional Long-Term Care Insurance policy. You do not have to have a 'permanent or "terminal" health condition to trigger the long-term care benefit in addition to the traditional benefit trigger.
• You die - Like any life insurance policy, you get a tax-free death benefit when you die.
• You change your mind - If, for any reason, you need money, you can receive the cash surrender value. While very few people will ever consider doing that, it gives policyholders additional peace of mind, knowing they have access to the money in the policy.

The Brighthouse policy's premium can only be paid with a single premium or guaranteed premium payments over a five-year period (which can never increase). Other companies offer options to pay over longer periods of time, which is not available with Brighthouse. 

Brighthouse SmartCare Features and Benefits

• An accelerated death benefit in two years or an extended long-term care benefit period of 4 or 6 years
• Inflation options - none, 5% compound or market indexed
• Pay one single premium or in five years
• Pays full monthly cash benefits at the time of claim
• Receipts are not required for reimbursement - you get the full available benefit in cash
• International benefits - full benefits anywhere in the world
• Terminal illness benefit allows you to obtain 50% of the death benefit in advance
• 90-day elimination period
• Both long-term care and death benefits are tax-free

International Benefits Key Feature

The Brighthouse policy offers full international benefits - in cash. If you expect to travel extensively or live internationally, this is a big feature to consider. 

Inflation Benefits

When you select the indexed benefit increase, your benefits increase based on the S&P 500. There are no guarantees with the success of the index. Also, be careful with “projected” index increases printed in the illustration. Benefits could decrease, but never below your initial benefit level. At the time of claim, your benefits are frozen from that point. The remaining benefits no longer increase.

The 5% compound inflation benefit increases all your benefits by 5% compounded guaranteed. 

You can also select no inflation benefits. Some policyholders select a high initial benefit without inflation.

Partnership 

Since Brighthouse is a hybrid policy and not a traditional long-term care policy, it will not qualify as a partnership policy under state and federal law.

You can learn more about the federal/state partnership program - 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.

Claims

If you own a Brighthouse 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 and claims and with Brighthouse claims could be more complicated, this assistance can be beneficial for the entire family - Filing a Long-Term Care Insurance Claim.

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. 

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 its own underwriting rules which 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?

Brighthouse underwriting is considered more "moderate" compared to other insurance companies. However, if you have several pre-existing health issues, be sure to discuss your health in detail prior to applying. 

Federal Regulation and Consumer Protections

The Brighthouse SmartCare plan is a "hybrid' policy that pays 100% of the long-term care benefit in cash. You enjoy both a tax-free life insurance death benefit along with tax-free long-term care benefits. If you are looking for a hybrid, experts recommend limiting your review to those that meet the federal regulations for Long-Term Care Insurance.

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. 

The Brighthouse policy meets Section 7702(b) guidelines. Remember, any insurance contract under Section 101(g) cannot call itself 'Long-Term Care Insurance and should generally be avoided as a long-term care solution. Federal law prohibits insurance companies from marketing these policies as "long-term care" policies.

Comparing LTC Insurance Products

Be sure to seek the assistance of a qualified Long-Term Care Specialist to compare the features, benefits, and costs of each policy. You can find a trusted and qualified specialist representing the major insurance companies that offer these products - Work With a Long-Term Care Insurance Specialist.

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 you several questions about your health to provide you with 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 Brighthouse Financial 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.