Long Term Care Rider

If you sell a case with an LTC rider, a health license and long term care CE training is required. Most states have this requirement, to find out more about state education requirements, you can download Long-Term Care Education Requirements Prior to Selling.

Most insurance agents are familiar with the concept of underwriting for mortality, which is the likelihood of someone passing away. However, when selling the LTC Rider, morbidity must also be taken into consideration. Morbidity is a better indicator of how likely someone is to need long term care.

Undewriting considers both. Mortality risk is used to make a determination for the death benefit and a separate assessment of morbidity is used to determine the risk class for the LTC Rider.

In some cases, applicants can receive an offer for an FFIUL policy and be declined for the LTC Rider. This can happen if the proposed insured has a condition that is considered a high risk for loss of the ability to perform normal activities of daily living or loss of cognitive ability.

It's important to understand what impairments may affect morbidity and cause issues with eligibility of the LTC Rider. We have created a common impairment guide that can help you when field underwriting cases.

Transamerica Underwriting Primer: Tips, FAQs and Common Impairment

The Chronic Illness Rider is inherent on the policy, though it needs to be selected on the application and requires underwriting, there is no cost to add the rider to the policy. The Chronic Illness Rider generally pays out a lump sum and can be exercised once a year. There are administrative fees taken upon an acceleration of the Chronic Illness Rider.

The LTC Rider is an optional rider that has additional underwriting requirements, separate from the base policy. There is an additional monthly cost for the LTC Rider. Unlike the Chronic Illness Rider that has a lump sum, the LTC Rider normally has a monthly payout, typically a percentage of the death benefit or the HIPAA per diem.

The Chronic Illness Rider and LTC Rider are not available on the same policy. The LTC Rider can be elected and underwritten for every policy when appropriate for the client’s needs. However, if the client does not qualify for the LTC Rider, you can still add the Chronic Illness Rider at no additional costs. There are key differences between the two riders. For more details, download the brochure:

Chronic vs LTC side by side comparison

There are important income tax implications of exercising any living benefit or LTC Rider. We have created a guide to help you better understand the impacts.

Living Benefits Tax Guide

The best way for your client to initiate an LTC Rider claim is to call 866-745-3545 Monday through Friday 8 a.m. – 5:30 p.m CT. An LTC Rider claims packet will be mailed to the insured after they call to initiate claim. The insured will receive a brochure that explains what they can expect.

Claims processing time depends on the length of time it takes the insured to return the completed claim to our office and provide proof of loss. Once the claim and proof of loss is received, the claims department has ten business days to review and make a final determination.

The claims department will communicate with the insured primarily by mail. However, after a couple of follow-up mailings, if the customer has not responded, a call will be made. If a determination is made to deny a claim, an examiner will make a call to explain the decision. If the insured has questions about the claims they can use the same number provided above.

Filing a LTC Rider Claim