Americo Financial Life and Annuity Insurance Company has introduced an unusual product: a single-premium long-term care insurance (LTCI) policy aimed at people who already need long-term care (LTC) services.

Americo has designed the new Reliable Living Plan policy to provide a monthly cash indemnity benefit as long as an eligible insured needs qualified LTC services.

To be eligible to have the policy, and to get the benefits, policyholder must be age 65 or older. The policyholder also must already need substantial assistance with at least two “activities of daily living,” or need substantial supervision due to dementia or some other form of cognitive impairment.

The kinds of LTC services that count as “qualified LTC services” include home health care, adult day care, assisted living care and nursing home care.

The “single-premium” provision means that the purchaser needs to pay the full premium at the time the policy is purchased.

Legacy Marketing Group

Legacy Marketing Group has exclusive distribution rights for the new LTCI product.

The Petaluma, California-based distributor says in an announcement of the product launch that the policy has no pre-existing health exclusions or maximum age restrictions.

Consumers can use the policy to pay for LTC services for relatives as well for services for themselves, and they can pay for coverage with 1035 transfers from non-qualified annuities or from cash-value life insurance, Legacy says.

If a consumer buys a policy to protect a relative, the policy benefits will be paid to the insured relative.

Preston Pitts, Legacy’s president, said in a statement that the policy can help address part of America’s LTC crisis.

“For consumers who are paying their own LTC expenses, or the expenses of a family member, and want to maintain choice and control, the Reliable Living Plan can provide a great sense of relief,” Pitts said in the statement. “They will no longer be dealing with the uncertainty of where that money will come from.”

Filing Details

Americo filed the LTCI product through the multi-state Interstate Insurance Product Regulation Commission (IIPRC).

The initial dollar value of the monthly benefit can range from $1,000 to $12,000, according to an outline of coverage in the IIPRC filing packet.

Consumers who want protection against inflation can buy an optional guaranteed purchase option rider when the policy issued, without additional underwriting. The premium for that rider is equal to 2% of the base single premium and is paid along with the single premium, according another document in the filing packet, a public actuarial memorandum. A policyholder who buys the guaranteed purchase option rider can adjust the monthly benefit amount every three years. The adjustment will have the effect of increasing the benefit amount by 5% compounded annually.

If policyholders who have the rider decide to buy more benefits, they will pay an additional benefits premium.

If a policyholder decides not to buy more benefits for any three-year period, the rider will be terminated.

Americo will suspend benefits payments if a policyholder recovers and no longer need qualified LTC services, but benefits payments will resume if the policyholder later deteriorates and returns to using LTC services, according to the public actuarial memorandum.

“The product is intended to be tax-qualified long-term care insurance, per section 7702(B) of the Internal Revenue Code,” according to the public actuarial memorandum.

Jeffrey Katz, the chief actuary at Fort Wayne Intermediaries Inc., signed the public actuarial memorandum.

Fort Wayne Intermediaries is owned by Swiss Re Life & Health America Holding Company.

Americo, a stock company founded in 1946, has its headquarters offices in Kansas City, Missouri. It has Texas as its state of domicile.