Hybrid long-term care insurance policies have increased in popularity these days. It makes sense, because unlike long-term care insurance, if you don’t need the long-term care benefits, the life insurance portion of the policy allows your beneficiaries to get a tax-free death benefit and the premiums are guaranteed not to change. Some of them even offer a return of premium if you change your mind. The Pacific Life long-term care insurance product is a hybrid one and called PremierCare Choice. There are actually two policies of this product:
- Pacific PremierCare Choice Max
- Pacific PremierCare Choice 100
Both policies have a “Live, Die, or Quit” options. You can use the long-term care benefits if you need them, and if you don’t, you can leave a tax-free lump sum to your heirs. The Return of Premium option is there in case you change your mind.
The main difference in these policies is in how the premium in distributed and how much of the premium you get back if you change your mind.
Pacific Life PremierCare Choice Max:
- Initial $100,000 premium gets you $312,565 long-term care benefits on day one, building up to $584,361 in long-term care (LTC) benefits by age 80
- You get 70% of your premium back if you change your mind
Pacific Life PremierCare Choice 100:
- Initial $100,000 premium gets you $270,781 in LTC benefits on day one, building to $506,244 by age 80
- You get 100% of your premium returned to you if you change your mind.
Pacific Life give you the option of choosing to receive your benefits as a reimbursement policy or a cash indemnity policy. If you choose the cash indemnity policy, your monthly benefits will be reduced by an indemnity factor, which means you’ll get about 76% of the value. Basically, by choosing cash, you’re giving up about 20%-24% of your LTC benefits. The other thing is that you choose which way you want to receive benefits when you sign up for the policy. You can’t change it when the time comes and you actually need the benefits—you’re locked in. So be aware of that.
If you select indemnity benefit option, 100% of maximum monthly benefit is also available for international coverage. If you select reimbursement option, you won’t receive any long-term care benefit from the policy if you decide to retire outside of the US. This is another important consideration.
The way these features are designed in Pacific Life’s PremierCare Choice policies is very unique in the world of hybrid long-term care insurance world. Unlike Nationwide’s YourLife CareMatters, Lincoln’s MoneyGuard, Securian’s SecureCare, or OneAmerica’s Asset-Care, Pacific Life provides consumers with flexibility to select how the key features in PremierCare Choice policies would work best for them.
You can choose to pay for either policy as a single premium, or in payments. You can pay for PremierCare Choice 100 for 1, 5, or 10 years and PremierCare Choice Max for 1, 5, 10, 15, or 20 years.
The elimination period is zero days for qualified in-home and community services and 90 days for everything else.
Either policy leaves 5% of the base amount, up to $5,000 for a residual death benefit, to cover final expenses.
Customer Satisfaction Rating of Pacific Life Long-Term Care Insurance
Pacific Life hovers just above the median average score in J.D. Power’s 2019 Life Insurance Study (the report for 2020 comes out in October), with a score of 765 (the median average is 761). This makes them about average, according to J.D. Power.
The BBB gives Pacific Life an A-, even though they are not accredited. There are four complaints on the website in the last three years, and 2 in the last year. There are just five one-star reviews.
The NAIC seems to reaffirm the low number of complaints on the BBB website. Pacific Life has a complaint ratio of .02, which means hardly any complaints at all.
Financial Strength Rating of Pacific Life Long-Term Care Insurance
A.M. Best rates Pacific Life an A+, so it would appear they do have the financial resources they need to pay claims.
Pacific Life offers a solid hybrid policy. The only real glitch is that you have to decide how you want your long-term care benefits paid out to you way before you need them and you can’t change your mind. But the customer service seems decent, so if you’re comfortable with this, Pacific Life is a good choice.