Our Professional Opinion on the Global Atlantic ForeCare Annuity
ForeCare is a good long-term care annuity for someone using nonqualified money who wants to multiply existing assets into a dedicated care pool. Unlike an ordinary annuity waiver or temporary living-benefit enhancement, ForeCare provides qualified long-term care insurance benefits and can continue paying after the original contract value has been exhausted.
Forethought Life Insurance Company is a good annuity company. It is part of Global Atlantic and is rated A by AM Best, which meets our minimum financial-strength standard.
The strongest feature is the 2x or 3x ForeCare Multiplier. Depending on underwriting, the contract can create long-term care coverage equal to two or three times the contract value. The original contract value funds the accelerated benefits first; the insurer-funded extended benefit continues afterward for the remaining covered duration.
The multiplier should not be confused with cash growth. The additional amount above contract value can only be used for qualifying care expenses. It cannot be surrendered, does not become part of the death benefit, and is paid subject to a maximum monthly reimbursement.
ForeCare is best for someone with taxable money that would otherwise remain in CDs, savings, or a fixed annuity and who can qualify through simplified underwriting. It is not available for qualified IRA money. Someone seeking an indemnity benefit with fewer receipts or a larger legacy should also compare a hybrid life and long-term care policy.
The monthly long-term care rider fee is locked for life, which is a positive. However, the fee reduces the realized fixed-account return, and the declared interest rate resets annually. This is not a product to buy for accumulation performance.
Bottom line: ForeCare is a legitimate hybrid LTC solution, not a gimmicky annuity waiver. We recommend it when the client has nonqualified assets, can qualify for the desired 2x or 3x multiplier, accepts reimbursement-based claims, and finds the monthly benefit and total care duration competitive with hybrid life/LTC and traditional LTC insurance.
What We Like
- True qualified long-term care benefits: ForeCare is more than a surrender-charge waiver or temporary annuity income doubler.
- 2x or 3x multiplier: Underwriting can create a care pool several times larger than the deposited premium.
- Extended benefits after account depletion: Coverage can continue after the accelerated contract value has been used.
- Single- and joint-life coverage: One contract can protect one person or eligible spouses.
- Broad care settings: Covered services can include home care, adult day care, assisted living, nursing facilities, respite, and hospice.
- No waiting period before eligibility begins: The contract does not impose a separate years-long waiting period before a covered event can qualify.
- Home-care elimination-period advantage: The elimination period can be waived for qualifying home health care with an approved plan of care.
- Rider charge locked for life: The monthly long-term care fee rate does not reset annually.
- Optional inflation protection: The care benefit can be designed to address rising costs.
- Death benefit: Unused contract value passes to beneficiaries.
What We Don’t Like
- Nonqualified money only: IRA and other qualified retirement funds cannot be used.
- Reimbursement design: Benefits are based on qualifying expenses and documentation rather than an unrestricted cash indemnity.
- Monthly benefit cap: A large total care pool does not mean the entire amount is available immediately.
- Rider fee reduces interest: The realized contract return is lower than the declared fixed rate.
- Annual fixed-rate renewal: The interest rate is declared each year and may decline.
- Nine-year surrender period: Ordinary access is restricted for a long period.
- Non-care withdrawals reduce benefits: Ordinary withdrawals can proportionally reduce the future LTC pool.
- Medical eligibility still matters: Simplified underwriting is easier than full underwriting but does not guarantee approval or the 3x multiplier.
- Additional LTC pool is not a death benefit: Beneficiaries receive unused contract value, not the unused insurer-funded extension.
- MVA on excess withdrawals: Ordinary non-care access can be affected by market interest rates.
What Is the Global Atlantic ForeCare Annuity?
ForeCare is a single-premium fixed annuity with a qualified long-term care insurance rider. It accepts nonqualified after-tax money and combines a contract value, annual fixed-interest crediting, and a separate pool of benefits for qualifying care expenses.
The product is designed under the federal rules for qualified long-term care insurance. When requirements are met, benefits used for qualifying care expenses are typically received free from federal income tax.
ForeCare Product Details
| Issuing company | Forethought Life Insurance Company |
|---|---|
| Product type | Single-premium fixed annuity with qualified long-term care benefits |
| Funding | Nonqualified money only |
| Insured ages | Generally 50 through 80 |
| Owner or annuitant ages | Generally 0 through 85 |
| Premium range | Generally $35,000 to $600,000 single life and $35,000 to $900,000 joint life |
| Interest | Declared fixed rate renewed annually |
| LTC multiplier | Two or three times contract value, depending on underwriting |
| Claims method | Reimbursement up to the maximum monthly benefit |
| Benefit trigger | Unable to perform two ADLs for the required period or qualifying cognitive impairment |
| Withdrawal-charge period | Generally nine years; state variations apply |
| Normal free withdrawal | Up to 10% of beginning-of-year contract value |
| Death benefit | Unused contract value |
How the 2x or 3x ForeCare Multiplier Works
The multiplier determines the total pool available for qualifying long-term care expenses.
- 2x approval: A $200,000 contract can create up to $400,000 of qualifying LTC coverage, subject to the monthly limit and contract rules.
- 3x approval: The same contract can create up to $600,000 of qualifying LTC coverage.
The multiplier does not increase the owner’s cash account. The amount above contract value exists only as insurance coverage for qualified care.
Accelerated and Extended Long-Term Care Benefits
ForeCare pays benefits in two stages:
- Accelerated Benefit: Qualifying reimbursements are paid from the contract value first.
- Extended Benefit: After contract value is exhausted, the insurer-funded extension continues for the remaining covered duration.
This is the major difference between ForeCare and an annuity that merely waives surrender charges. The insurance company can pay benefits beyond the amount originally deposited.
Single-Life and Joint-Life Coverage
Single-life coverage provides a pool and monthly benefit for one insured. Joint-life coverage can protect two eligible spouses under one contract.
The current design provides different accelerated and extended durations for Standard and Premier underwriting classes. Joint coverage can provide a longer total duration, but both insureds share the same overall pool. If both spouses receive care simultaneously, the pool is used faster.
Compare the monthly benefit per insured, total shared pool, and duration under one- and two-claim scenarios. A large total pool can still be inadequate when the monthly reimbursement limit is too low.
What Care Does ForeCare Cover?
Eligible services can include home health care, home health aides, homemaker services, personal care, respite care, adult day care, assisted living, bed reservation, nursing-home care, and hospice, subject to the plan of care and contract definitions.
The benefit is reimbursement-based. The insured incurs a qualifying expense, submits documentation, and receives reimbursement up to the monthly maximum. This is different from an indemnity policy that pays a stated cash benefit regardless of the exact expense.
How You Qualify for Benefits
A licensed healthcare practitioner generally must certify that the insured is chronically ill because the person cannot perform at least two activities of daily living without substantial assistance for the required period or has a qualifying cognitive impairment requiring substantial supervision.
Covered services must follow a written plan of care. The standard elimination period is based on days of covered care within a stated window. The elimination period can be waived for qualifying home care under the contract’s requirements.
Simplified Underwriting
ForeCare uses simplified point-of-sale underwriting rather than a full traditional medical process. That can make the application faster, but health history, prescriptions, cognitive status, mobility, and existing care needs can still affect approval and whether the applicant receives the 2x or 3x multiplier.
Do not transfer an existing annuity until the new coverage is approved and the final monthly benefit, multiplier, fee, and exclusions are known.
The Long-Term Care Rider Fee
ForeCare deducts a monthly fee for the long-term care protection. The fee rate is locked for the life of the contract and is waived while qualified LTC reimbursements are being paid.
The fee reduces the realized interest credited to the contract. ForeCare should therefore be judged by the insurance value—the care pool and monthly benefit—not by comparing its net accumulation return with a MYGA.
Optional Inflation Protection
An optional inflation benefit can help the monthly care benefit keep pace with rising costs. The feature generally requires an upfront charge deducted from contract value.
Inflation protection can be important for a younger purchaser because care may not begin for decades. Compare the future monthly benefit with projected local home-care and facility costs rather than focusing only on today’s benefit.
Optional Nonforfeiture Benefit
The optional nonforfeiture feature can preserve a reduced level of benefits after specified contract circumstances. It also requires an upfront charge and should be evaluated against the amount of protection it preserves.
Withdrawals, Surrender Charges, and MVA
ForeCare generally uses a nine-year declining surrender-charge schedule. Up to 10% of beginning-of-year contract value can normally be withdrawn annually.
Money taken for purposes other than qualified LTC benefits can proportionally reduce the future care pool. An excess withdrawal can also be reduced by a Market Value Adjustment.
Someone expecting significant ordinary withdrawals should not fund the contract with all available liquid assets. The annuity is intended to reserve capital for care, not serve as a substitute for a liquid retirement account.
Death Benefit and Money Left to Family
Any contract value not used for long-term care expenses passes to beneficiaries. The insurer-funded extended care amount does not become an enhanced annuity death benefit when unused.
This creates a practical tradeoff: the contract preserves some legacy when care is not needed, but it is not designed to maximize the death benefit. A hybrid life/LTC policy may provide a stronger income-tax-free death benefit when legacy is a major goal.
Tax Treatment
Contract interest grows under ordinary annuity tax rules. Benefits received for qualified long-term care expenses are generally federal income tax-free when the contract and claim satisfy the applicable requirements.
Nonqualified withdrawals, surrender, annuitization, and death benefits can create taxable income. Taking ordinary withdrawals can also reduce future LTC benefits. ForeCare is not designed for IRA or other qualified retirement money.
Who Should Consider ForeCare?
- Someone age 50 to 80 with nonqualified money set aside for future care.
- A buyer who wants to multiply an existing fixed asset into a larger LTC pool.
- Someone who can qualify for the desired 2x or 3x underwriting class.
- A married couple seeking shared joint-life coverage.
- A consumer comfortable submitting qualifying expenses for reimbursement.
- Someone who values a death benefit equal to unused contract value.
Who Should Avoid It?
- Someone trying to use IRA or other qualified money.
- A buyer who wants unrestricted cash indemnity rather than reimbursement.
- Someone whose primary objective is the highest fixed-annuity return.
- A consumer who may need substantial ordinary liquidity.
- Someone whose health does not qualify for a useful multiplier or monthly benefit.
- A buyer whose primary objective is maximizing the death benefit.
Other Insurance Coverage to Consider
- Traditional long-term care insurance: May provide stronger leverage, broader benefit designs, or lower initial premium for someone willing to accept ongoing premiums.
- Hybrid life and long-term care insurance: Can combine care benefits with a larger guaranteed life insurance death benefit.
- Medicare Supplement coverage: Helps with medical cost-sharing but does not pay for most custodial long-term care.
- Life insurance: May be more efficient when leaving money to family is more important than care leverage.
Alternatives to Compare
Hybrid life/LTC: Compare ForeCare with policies offering indemnity or reimbursement benefits, guaranteed premiums, and a larger death benefit.
Traditional LTC insurance: May provide more benefit per premium when the buyer accepts ongoing payments and possible rate increases.
A different LTC annuity: Compare multiplier, monthly benefit, accelerated and extended durations, rider fee, inflation options, and underwriting class.
Self-funding with a MYGA or investment account: Preserves full control but does not create insurance leverage beyond the amount saved.
Our Final Recommendation
We recommend ForeCare when the client has nonqualified assets, qualifies for a useful 2x or 3x multiplier, and accepts reimbursement-based claims. The product provides real extended long-term care benefits after contract value is depleted. It should be purchased for the care coverage—not for the fixed interest rate.
Contact The Annuity Expert for free quotes and a no-obligation comparison of ForeCare with long-term care annuities, hybrid life/LTC policies, and traditional long-term care insurance. We will compare underwriting, multiplier, monthly benefit, single- and joint-life duration, inflation protection, rider fees, reimbursement rules, liquidity, death benefits, and insurer strength before you buy coverage.
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Frequently Asked Questions
Is ForeCare real long-term care insurance?
Yes. It is a fixed annuity with a qualified long-term care insurance rider, not merely a surrender-charge waiver or temporary income enhancement.
What does the 2x or 3x multiplier mean?
It means the total qualifying long-term care pool can equal two or three times the contract value, subject to underwriting, monthly limits, and contract rules. It does not multiply the cash surrender value.
Can I use IRA money?
No. ForeCare is designed for nonqualified after-tax funds.
Does ForeCare pay cash regardless of expenses?
No. It uses a reimbursement design. Benefits are paid for qualifying expenses up to the maximum monthly amount.
What happens after the contract value is exhausted?
The insurer-funded Extended Benefit can continue paying qualifying reimbursements for the remaining covered duration.
What do beneficiaries receive?
Beneficiaries receive unused contract value. Unused insurer-funded extended care coverage does not become a death benefit.