Collins Aerospace offers employees a voluntary benefit through Allstate that combines life insurance and long term care (LTC) protection in one plan. This type of hybrid coverage is designed to protect both your family and your retirement savings.
How the Policy Works
This is one policy with two benefits. The life insurance provides money to your loved ones if you pass away, and the long term care benefit gives you monthly payments if you ever need help with daily living activities or face a cognitive illness. Employees choose a life insurance amount between $25,000 and $250,000. If you need long term care, you can access six percent of your selected amount each month until you reach twice the original life insurance benefit.
For example, if you choose $100,000 of life insurance, your monthly LTC benefit would be $6,000 and your total LTC benefit would be $200,000.
When Long Term Care Benefits Apply
You can use the LTC benefit if a doctor certifies that you are unable to perform at least two of the six daily living activities which are bathing, dressing, eating, toileting, transferring, or continence. The benefit also applies if you are diagnosed with a cognitive condition such as dementia that requires supervision. These benefits can be used for care at home, in assisted living, or in a nursing facility.
Key Features Employees Should Know
This policy offers guaranteed acceptance during designated enrollment periods, meaning employees ages 18 to 70 can enroll without medical exams or health questions. Outside of these enrollment windows, coverage may require standard underwriting. The coverage is fully portable so you can keep it even if you retire or leave Collins Aerospace, with premiums and benefits staying the same.
A unique feature of this plan is the death benefit restoration rider. In most hybrid life and long term care policies, using part of your life insurance benefit for long term care reduces the death benefit dollar for dollar. However, this policy restores the death benefit back to its original amount for your beneficiaries, even if you have drawn on it for care. Not all hybrid policies offer this option, which makes it an important benefit to understand.
Premiums are based on your age and the coverage amount you choose, and once you have the policy, your rates are guaranteed not to increase. Spouses or partners between ages 18 and 70 are also eligible for coverage.
Things to Consider Before Enrolling
While this benefit offers valuable protection, it may not be right for everyone. Think about whether permanent life insurance is something you need or if term insurance might be a better fit. Consider whether you are comfortable committing to the premiums long term, especially as you get older. Compare this policy to any existing life or LTC coverage you may already have, and decide whether you would prefer to self fund care or include LTC coverage as part of your retirement plan.
The Bottom Line
The Collins Aerospace life and long-term care benefit can provide peace of mind by combining protection for your loved ones with financial support if you ever need long term care. Guaranteed acceptance and portability make it especially appealing for many employees. Still, it is important to evaluate whether it fits your overall financial plan before enrolling.
At Custom Fit Financial, we specialize in advice only, fee only retirement planning for individuals and couples age 55 and over. We offer hourly and project based financial planning with no sales pressure or product commissions. Whether you are in Cedar Rapids, Iowa City, or working with us virtually across the United States, we help you make confident and informed decisions about your retirement.
Want to see how this benefit fits into your financial plan? Schedule your free intro call today.
