Lincoln Financial Hybrid Long-Term Care Insurance Review

Lincoln Financial is a Fortune 500 company founded in 1905 that provides financial services and insurance solutions to individuals and businesses across the United States. The company has a comprehensive portfolio of life insurance, annuity, group benefits, asset management, and retirement plans.

Lincoln Financial introduced Money Guard in 1987. The company is well known for its hybrid products that combine life insurance with a qualified rider for long-term health care. The product series provides a policyholder with long-term health care benefits if care is needed or death benefit protection if it's not.

While Lincoln still has high financial ratings from the primary rating services, several of those services have downgraded the company's ratings and added a "negative outlook." The negative outlook reflects pressure on Lincoln's balance sheet strength position due to a change in assumptions in the company's universal life (UL) insurance block of business.

AM Best and Standard and Poors show a stable outlook. AM Best gives Lincoln an "A" rating, and Standard and Poors rate the company with an "A+" rating. Fitch and Moody's give the company a negative outlook, although Fitch gives Lincoln an "A+" and Moody's an "A1" rating.

True 'Hybrid' Policies Meeting Federal Guideline

Several types of long-term care solutions are available to consumers. Lincoln offers a hybrid Long-Term Care Insurance policy that meets federal guidelines under Section 7702(b) of U.S. Code.

Types Of Long-Term Care Insurance Policies & Which Is Best For You.

Federal Regulation and Consumer Protections

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 an actual Long-Term Care Insurance contract.

All insurance products that meet these federal guidelines contain consumer protections, regulated benefit triggers, and tax advantages. 

Lincoln Financial offers policies that meet Section 7702(b) guidelines. 

Remember, any life insurance contract designed to meet Section 101(g) guidelines 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.

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.

Features and Benefits

MoneyGuard Fixed Advantage is the company's latest universal life insurance policy with a long-term care rider that reimburses the policyholder for qualified long-term care expenses. 

• Death benefits from $50,000 to $500,000
• Long-term care benefit period between two and seven years
• Policyholders can choose an inflation benefit that increases the long-term care benefits with a choice of either 3 or 5% compounded.
• Zero-day elimination period for long-term care services
• Comprehensive long-term care benefits include home care, adult day care. assisted living, memory care, and nursing home.
• Alternative care services 
• Bed reservation benefit
• Case management
• Caregiver training for informal caregivers
• Hospice benefits
• Durable medical equipment and home modification benefit
• Respite care
• Applicants must be between the ages of 40-80 on their last birthday
• Cash benefit option allows for 50% of the long-term care benefit to be paid in cash to the policyholder
• International benefits for a maximum of 36 months (for facility care only)

Benefit Transfer Rider 

This is a no-cost rider automatically included at the policy's issue that provides beneficiaries who are also the insured of another Lincoln Financial Money Guard/Fixed advantage policy (that also includes this rider) the option to use death benefit proceeds to increase the long-term care benefit pool, death benefit, and surrender value without additional underwriting. 

The rider, in effect, creates a second-to-die option between two policyholders. Upon the death of the first policyholder, the beneficiary will have three options:

• Take full death benefit.

• Take partial death benefit income tax-free and use the remainder to purchase more benefits for their policy. 

• Use the full death benefit to purchase more benefits for their policy.

Partnership 

Since Lincoln Financials’ Money Guard is a hybrid 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 Lincoln Financial 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.

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 unavailable 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 can vary dramatically when comparing equal benefits.

Underwriting

Long-Term Care Insurance is medically underwritten; every company has its own underwriting rules determining 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 the Ability to Obtain Long-Term Care Insurance?

Lincoln Financial is considered to be a conservative underwriter. Discuss your health in detail with a specialist if you have several pre-existing health issues before applying. 

Comparing LTC Insurance Products

Be sure to seek the assistance of a qualified Long-Term Care Specialist to compare each policy's features, benefits, and costs. 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. A specialist will match your age, health, family history, and other factors to provide accurate quotes.

Please note: Since every company has different underwriting rules, you could be eligible for coverage with one company rather than another.

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.