Transamerica Corp. has introduced a flexible long-term care insurance rider, the Cedar Rapids, IA-based holding company announced Monday. The rider is meant to provide an extra layer of savings when the time comes for consumers to finance their long-term services and supports needs.
“Private and public insurance products have important complementary roles to play in offering meaningful alternatives to Medicaid that are widely affordable and accessible and preserve and strengthen essential safety nets,” LeadingAge previously said in “Perspectives on the Challenges of Financing Long-Term Care Financing.” LeadingAge, along with the Bipartisan Policy Center and the Long-Term Care Financing Collaborative, among other groups, have issued reports with recommendations for LTSS financing.
The new rider for Transamerica’s universal life insurance adds long-term care benefits to employers’ existing life insurance plans for their workers. The rider allows for early access to death benefits to help beneficiaries pay for licensed long-term care expenses at home, in a facility, or at an adult day center or specialized treatment center.
The rider does not cover services related to alcohol or drug addiction or attempted suicide.
The minimum amount of coverage under the rider is $100,000, and the maximum amount is $2 million. Benefits will be paid monthly in the amount the policy owner chooses with a minimum withdrawal of $500. The maximum amount in any calendar month is the lesser of 2% of the amount specified at the time benefits are activated or “the monthly amount allowed by HIPAA, which is the per diem amount times the number of days in the calendar month,” the company said.
Transamerica advises that choosing an amount less than the maximum monthly benefit could extend the life of the benefits.
Once the monthly withdrawals are set up, they remain in effect for the remainder of the current calendar year. The payout amount can be changed each subsequent calendar year by providing written notice 30 days before the beginning of the next calendar year.
“Our goal is to help employees plan for the future with confidence. The introduction of our long-term rider is a vital step towards empowering individuals to manage their long-term care needs proactively,” John Stanley, senior managing director for employee benefits at Transamerica, said in a press release.
