OneAmerica/State Life new product & linked-benefit market outside CA

Competition in the Linked-Benefit marketplace is intense. State Life (OneAmerica) is still the go-to insurer for an endless benefit period, for favorable underwriting, and for using an annuity to pay for coverage. Last year, Nationwide was the most competitive product in most other situations. This year, in most jurisdictions, Lincoln National MoneyGuard Fixed Advantage (1-10-year premium periods) and Brighthouse SmartCare (1-5-year premium periods) took the pricing lead for limited-pay linked-benefit, however State Life’s new product is less expensive at ages 70+. Lincoln is best for smokers as its price is the same regardless of tobacco. The new State Life product also has very competitive to-age-95 premiums. Nationwide still has the best joint coverage. Securian sometimes has the most competitive product in some jurisdictions. The new State Life product is available in all jurisdictions but AZ, CA, CT, DC, DE, FL, IN, MT, NY, ND, NJ, SC and SD. Brighthouse is the best linked-benefit product in NY.

WARNING: if you run illustrations through State Life’s Care Solutions Calculator (either directly or through BOSS), you can’t get compounding on the core benefit! That is, until the death benefit is used up (at least 24 months of benefits), the maximum monthly benefit will be the same as at issue. For sales outside CA, use https://login.oneamerica.com/login instead, set up an account, then select “Sales Connection”. (In CA, you can’t get compounding on the core benefit.)

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Key info about State Life/OneAmerica product changes:

1. State Life has shifted from a monthly maximum LTCi benefit of 2%, 3% or 4% of the death benefit to the most common design in the industry, spreading the death benefit over 24 months. They offer continuation of benefit periods of 0, 2, 4, and 6 years and endless. Thus, counting the core period, the BPs will be 2, 4, 6, and 8 years or endless. (Return of Premium is limited to 2-, 4-, and 6-year BPs.)

2. Independent caregivers (non-family) can be approved to receive full reimbursement benefits! With informal caregiving, up to 75% of the monthly maximum can be received until the death benefit is used up. Thus, that can last for up to 32 months, after which the benefit becomes reimbursement. This improves upon LFG’s 2024 MoneyGuard Fixed Advantage approach which allows up to 50% (for up to 48 months).

3. 3 types of people can help claimants: a. The Care Benefit Concierge is a State Life employee who will handle the claim. As I understand it, claimants will get a single, identified contact person. That’s great! I’ve asked some questions, including whether this applies to in force business. This person could contact doctors, if necessary. b. An optional external Caregiver Consultant provides support, at no charge, for informal caregivers. This is a great idea! c. An optional 3rd-party Care Coordinator helps the claimant select a facility, etc. The cost for this service comes out of the pool, thereby shortening the maximum benefit period slightly. I guess it is free with an endless BP.

4. Additional services can be covered to assist the claimant, including human lift, automated medicine dispensers, and medical monitoring.

5. Prices with compounding have dropped significantly. Prices without compounding have dropped less and, in some cases, have increased. Compounding is available at 2%, 3% or 5%, for 20 years or forever.

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