Long Term Care – How it Works and Why it’s Important
One of the financial products that I own and I’m proud to share with you is my Long-Term Care plan from Kaiser International.
Kaiser is an HMO (Health Maintenance Organization) company registered as a health care provider in the country. While traditional HMOs cater only to short-term healthcare needs, Kaiser addresses the long-term health care needs of individuals especially after their employment ends and during retirement years.
I got this product through IMG back in 2011, I got the lowest plan I could afford at that time.
If you’re wondering why I got another health care product when I already have an HMO provided by my company, here’s why:
I’ve seen most of my retired relatives still dependent on their children to cover their medical expenses. Even though they have pensions, a big chunk of it goes to their maintenance medicines and health expenses. I don’t want to put that burden onto my children when I’m old. That was enough reason for me to get my own long-term care savings plan.
What is Kaiser Ultimate Health Builder?
This is the long-term care product of Kaiser. It’s an innovative HMO with a savings account and life insurance coverage in one product.
The main intent of this product is to provide health care funds even beyond the age of 60 years old during which you can no longer be covered with traditional HMO.
How does Kaiser Ultimate Health Builder work?
First, choose a plan you desire that matches your budget.
The options vary according to the Long Term Care Benefit Value, it’s one of the cash benefits that you will receive upon maturity along with the interest and dividends. The Long Term Care Benefit value varies from Php 45,000 as the lowest plan to Php 1,000,000 as the highest.
It’s payable for 7 years and it will mature after 20 years. The product progresses according to its stages, namely; the (1) accumulation period, (2) extended period and the (3) long term care period.
Accumulation Period. The first seven years of your policy is the paying period. Your responsibility is to keep your plan enforced and updated so you are covered with the following benefits:
- Annual Physical Exam
- Dental Benefits
- Member’s Choice of Room and Board
- Annual Benefit Limit (depending on the plan)
- Waiver of Fees Due to Death or Total Permanent Disability
- Life Insurance, Accidental Death and Dismemberment Coverage
- Access to Doctors and Hospitals Accredited to Kaiser
Extended Period. This is where your payment stops, and the investment part of your Kaiser plan will start. At the 8th to 20th year, Kaiser will allocate a Yearly Health Care funds amounting to 10% of the Long Term Care Benefit Value. You have the option to use it in case a medical need arises.
If it is unused, your Yearly Health Care fund will be fund-managed by Kaiser with a minimum return of 3% and maximum return of 10% per year depending on the fund management performance. On top of the interest from the unused funds, Kaiser will also give dividends in a form of Additional Yearly Health Care funds if the management will earn at least 7% ROR in a year.
They will also provide to you a certificate of full payment and an application form for a VISA debit card in the 8th year.
So if there’s a need for you to use the funds for medical expenses during this period, just call Kaiser so they can activate your card and use the funds for medical bills.
Here’s my own VISA card I got a year after having fully paid my plan.
You also have these following benefits during the extended period:
- Annual Physical Exam (deductable from Yearly Health Care fund)
- Dental Benefits (deductable from Yearly Health Care fund)
- Member’s Choice of Room and Board (limited to the unused funds)
- Annual Benefit Limit (limited to the unused funds)
- Life Insurance, Accidental Death and Dismemberment Coverage
- Access to doctors, dentist, clinics and hospitals accredited to Kaiser
Start of Long Term Care Period
This is the maturity period and it will occur in the 21st year. This is where you start to reap the benefits of your plan. Personally, this is where I will revisit and touch my policy after making the full payment.
At this point you now have the Total Maturity Money which is composed of;
- Long Term Care Benefit Value
- Total Yearly Health Care funds
- Total Additional Yearly Health Care funds
- Long Term Care Experience Incentives
The Long Term Care Experience Incentives is a bonus fund that you can have as a reward of being healthy. It will be given by Kaiser to you in the 21st year if you have not utilized the hospitalization benefit during the 7 years accumulation period. The fund amount is 85% of the contract price of your plan.
During this period, you have four settlement options to decide on how you are going to use your matured policy.
- Leave the total maturity funds to Kaiser
- Widraw the yearly interest only of the total maturity funds
- Partial widrawal up to half of the total maturity funds
- Full withdrawal of the total maturity funds
If you decide to choose either of the options 1 to 3 above, you will have the following benefits from Kaiser:
- Continued Life Insurance coverage until age 80
- Coverage of all pre-existing condition up to the available fund balance
- Access to the doctors, dentists, clinics, and hospitals accredited with Kaiser
- Continuous growth of the funds with 3% to 10% ROR per year
Option number 4 will terminate your plan and prevent you from accessing the benefits I mentioned above.
I hope I was able to share clearly with you an investment option that addresses one of our basic needs when we live too long and we don’t have to depend on somebody else financially.
Interested to have your own Kaiser Long Term Care plan? You can actually try to have a DIY proposal. If you want to get a plan, you can sign up using the button below and pay online.
About the author: This article was written by Bill Harris Asignar. He is a full time electronics engineer in one of the Research and Development Companies in Cebu. He became one of the Senior Marketing Directors of International Marketing Group (IMG), a company which caters to the financial needs of every individual and families who wish to attain financial independence. Together with his team, he is teaching financial literacy to Filipinos, especially the young ones who enrolled in IMG’s program called Wealth Academy. Outside work, he enjoys traveling with her girlfriend Gie, locally and outside the country.
Read more on: bit.ly/img-ph
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