Forethought Life Insurance
Forethought Life Insurance is a relatively new company, having been founded in 1985 as a subsidiary to Hillenbrand Industries. It quickly grew from there, becoming independent in 2004 and later joining Global Atlantic Financial Group, which it remains a part of to this day. Forethought got its start by focusing on providing pre-need coverage for funerary expenses and it is still considered one of the best burial life insurance companies in the industry. In addition to various insurance products that help to cover final expenses, Forethought offers annuities for retirement, long-term care, and more.
Annuity with Long-Term Care Benefits
While many people still choose to purchase traditional long-term care insurance policies, recent years have seen increased interest in hybrid products that combine long-term care coverage with other features or services. ForeCare, the hybrid offered by Forethought, is a fixed annuity with a long-term care rider. ForeCare provides a steady stream of funds that can be used to pay for qualified long-term care expenses. Any money that is left over when the annuity’s owner passes away can be turned into a death benefit instead, thus ensuring that nothing goes to waste regardless of how much or how little long-term care is required. However, it is worth noting that hybrids typically cost more than traditional long-term care insurance, and the ForeCare annuity requires a single, upfront premium of at least $35,000.
ForeCare provides a guaranteed minimum interest rate along with principal protection and 2-3x contract value for qualified expenses. There are also tax benefits, as contract growth is tax-deferred and qualified withdrawals for long-term care are typically exempt from federal income tax. Joint benefits for couples are also available, allowing qualifying spouses to each make long-term care withdrawals as needed. The long-term care rider comes standard with this annuity, but others can be added as well, including a nonforfeiture benefit and inflation protection. If you are considering purchasing a ForeCare annuity, it is a good idea to do so sooner rather than later, as the monthly fee associated with the long-term care rider will vary depending on your age at the time the annuity is issued.
Reputation and Financial Strength
Forethought is a financially sound company and has received good scores from three major independent ratings agencies: an A- (excellent) from A.M. Best, an Aa3 (excellent) from Moody’s Investors Service, and an A- (strong) from Standard & Poor’s. While a company should not be judged on financial strength alone, these scores are important because they help to predict the company’s ability to pay out future claims. As for its reputation with customers, it is worth noting that while Forethought does have many positive reviews, data collected by the National Association of Insurance Commissioners does show that it has a higher than median rate of complaints for a company of its size. Such complaints focus primarily on negative interactions with customer service representatives and difficulty receiving answers or help from them.
Be sure to take a look at our other articles to learn more about the various companies offering traditional LTC insurance and hybrid policies. You can find further information on the benefits and drawbacks of hybrids in our first article on alternatives to traditional long-term care insurance. Remember – these policies and the companies that issue them can differ greatly, so it really does pay to do your research and shop around.
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