(March 26, 2014)— Led by Representative Rob Damron, the Kentucky legislature unanimously passes policy conversion disclosure mandate into a Long Term Care Benefit by a vote of 38-0. This consumer protection and tax payer savings measure, introduced so far in CA, FL, KY, LA, MA, ME, MD, NJ, NY, PA, TX and WA, goes to Governor Steve Beshear to sign into law. Kentucky now joins Texas in enacting this law to help families pay for long term care services.
Rep. Damron has been a tireless champion for life policy owner rights and a vocal advocate for the conversion of life insurance policies into Long Term Care Benefits. The owner of a life insurance policy has the legal right to sell their policy via a life settlement into a Long Term Care Benefit Plan that will protect the money to make sure it is used to cover long term care expenses. Once an irrevocable, FDIC-insured Benefit Plan is in place, the owner remains “private pay” for as long as possible and can choose the form of care they want: Home Care, Assisted Living, Memory Care, Nursing Care or Hospice. A Long Term Care Benefit Plan is a Medicaid qualified spend-down; and once the account owner has spent through the tax-advantaged funds, they are able to immediately transition to Medicaid if necessary for ongoing care. By delaying entry onto Medicaid for owners of a life policy, people are able to remain financially independent and in control of their long term care decisions and tax payer dollars are saved helping to preserve already stressed Medicaid budgets in every state.
The Kentucky bill calls for:
…the sale of a life insurance policy with a face value in excess of $10,000 in exchange for a life settlement contract to provide for long-term-care services;
proceeds of the life settlement contract are to be held in an irrevocable state or federally insured account for the benefit of the recipient of the long-term-care services;
the recipient shall be the only person authorized to select a provider and any attempt to require the use of a provider is prohibited and constitutes an unfair or deceptive act in violation of KRS 304.12-010;
require the contract to include a provision that reserves for final expenses to authorize five percent of the face amount of the life insurance policy, not to exceed $7,500, or $5,000, whichever is greater; require that any reserve be payable to the owner’s estate.
Life Care Funding thanks Rep. Damron, the Kentucky legislature, Governor Beshear, and Michael Freedman of Sentinel Solutions for their tireless work and support for consumer rights and preserving tax payer dollars.
“We are extremely proud that twelve states have introduced legislation to ensure consumers are notified of their rights to use a life insurance policy conversion into a Long Term Care Benefit Plan based on the Life Care Funding model,” said CEO, Chris Orestis, “and now the momentum is really picking up steam with Kentucky joining Texas as the second state to pass this measure into law to help owners stay private pay and save Medicaid dollars in the process.”
Founded in 2007, Life Care Funding (LCF) specializes in converting the death benefit of an in-force life insurance policy into a Long Term Care Benefit Plan to cover the costs of Homecare, Assisted Living, Memory Care, Skilled Nursing, and Hospice. LCF is the originator and market leader of this innovative approach to funding Senior Living and Long Term Care.