AARP’s Cornerstone Advantage : Analysis
Cornerstone Advantage is the newest long-term care insurance offering by Genworth Financial and AARP. The biggest drawback about Cornerstone Advantage is that it has limited benefits compared to, say, Privileged Choice or Classic Select (both Genworth products as well). Let me elaborate.
With Cornerstone Advantage, you do have the positive features such as coverage for long-term care at home, in an assisted living facility or even in a nursing home. As our statistics show, only 12% of claims are paid for nursing homes, and we think this is important for consumers to know. Long-term care insurance is not “nursing home insurance” anymore!
Specifics on Cornerstone Advantage
So I decided to look into some specifics on Policy Form Series 7048, I.E. Cornerstone Advantage. One key disclaimer that pops out immediately is the fact that Assisted Living Facility rent, room and board is available only as a rider for Cornerstone Advantage. Make sure you keep this in mind if you are considering this coverage! The plan has many advantages and disadvantages, depending on your needs. If you are considering the coverage, continue reading for further analysis on CA.
First, A Few Advantages of AARP/Genworth Cornerstone Advantage
The plan has automatic return of premium built in to the plan in many states, and for policyholders under the age of 75. With this built-in feature of Cornerstone Advantage, should you pass away, your estate, o someone you designate, can receive all or a portion of the premiums you’ve paid through Cornerstone Advantage’s return of premium benefit. This is a nice way to know that each time you pay your LTC bill, you are building something for your heirs, be it asset protection through use of benefits, or the benefit account setup upon death. We liken this to life insurance built in with a LTC policy. Be sure to read the outline of coverage and insurance contract carefully to ensure you understand this benefit.
Return of Premium can be added to virtually any policy as a rider, but is buit in to Cornerstone Advantage by default. It cannot be removed from the policy, so make sure you are comparing apples and apples if you are looking at alternatives to Cornerstone Advantage.
Cornerstone Advantage Provides 80% Coinsurance.
This is the kicker. This is why CA is so much less expensive than traditional LTC policies. There’s an effective 20% deductible. So while these plans can help offset the huge cost, they do not eliminate it at all. For this reason, this plan is not for everyone. In fact, it is ideal for those who have financial stability and want a hedge against the large liability of having to pay for long-term care in the future.
For those who may depend on their long-term care insurance policy for future protection, other alternatives should be investigated. It may be impossible for many to make the coinsurance payments in the future, rendering the policy issues.
Should you have any comments, please leave them here in the comments section and I’ll try to respond!
For more details, download the Cornerstone Advantage Brochure.