John Hancock Long-Term Care Insurance has launched Benefit Builder, a new option on its Custom Care III LTC insurance policy. Benefit Builder is an alternative to a traditional inflation option and provides automatic increases in benefits that occur gradually over time, as well as voluntary buy-up options.
Policyholder's benefits grow through an automatic crediting formula tied to the investment earnings of a segment of John Hancock's general account, without a corresponding increase in premiums. Every three years through age 75, policyholders will have the opportunity to increase benefits by 10 percent without having to answer questions about health or undergo a medical exam, subject to restrictions. Premiums for the additional buy-up coverage will be based on the policyholder's age on the option date.
Custom Care III featuring Benefit Builder includes the same consumer protection features found in John Hancock's other LTC insurance policies.
Marianne Harrison, president, John Hancock LTC Insurance, contends that Benefit Builder will expand the LTC insurance marketplace, by appealing to younger consumers who may have competing financial priorities and cannot afford more traditional policies. She also expects the product will attract older healthy individuals who otherwise could not afford the premiums.
"We view Custom Care III featuring Benefit Builder as a break-through product that will renew consumer interest in LTC insurance by adapting to their unique needs and budgetary concerns," Harrison said.
The policy has been filed nationally and currently is available in 36 states via approval by the Interstate Compact. For individuals who prefer a more traditional LTC insurance policy, Custom Care III can be purchased with a CPI or 5 percent compound inflation option instead of Benefit Builder.