Updated ExtendCare Per Diem Beginning in 2024

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The Internal Revenue Service (IRS) recently announced upcoming changes to the per diem limitations for periodic payments received under qualified long-term care insurance policies and certain life insurance policies which offer accelerated death benefits for chronic illness care. 

The 2024 per diem limitation for periodic payments from these types of policies will decrease from $420 to $410. This per diem change will provide clients the opportunity to access up to $12,300 of their policy’s death benefit each month through ExtendCareSM, a chronic illness protection rider available with the purchase of new universal life insurance policies from Protective. The new per diem limitation will apply to policies issued with a 2024 effective date. For policies issued in 2024, the policy can still be issued with the 2023 maximum benefit if the illustration as submitted shows the higher amount. For claims actually submitted in 2024, the max amount that can be paid out tax-free is $12,300. 

About ExtendCare
ExtendCare is an optional rider that allows clients to advance their policy’s death benefit to use for any potential chronic illness needs. Should the insured become chronically ill1, as certified by a licensed physician, the policy death benefit can be accessed after a waiting period of 90 days.2 This rider is only available at policy issue for applicants at an additional cost. 

With ExtendCare, clients can:

  • Access a monthly benefit amount, up to $12,300
  • Receive monthly benefit payments directly
  • Pay for family and informal care
  • Use their benefit for medical or non-medical expenses
  • Cover expenses without providing proof of care
  • Leave any unused portion of the death benefit for loved ones 

1 Chronically ill is defined as being unable to perform at least two of six Activities of Daily Living without assistance for 90 days, or requiring supervision for protection against health and safety threats due to severe cognitive impairment.

2 A 90-day waiting period must pass between the time the company receives written certification of the insured’s chronic illness status and the time the first accelerated death benefit (ADB) payment is made.