How to Get Life Insurance With Long-Term Care Benefits
New types of hybrid policies combine life insurance with long-term care benefits. This can be attractive to people who are not interested in buying a separate long-term care insurance that they may not even use.
This combined policy provides coverage for long-term care that is not included in regular health insurance or Medicare. Moreover, a death benefit is given to your beneficiary if you do not max out the long-term care benefit. Below is a more detailed explanation on how this combination policy works.
- Payment is either one lump-sum or a few large annual premiums over 10 years.
- A pot money is scheduled for long-term care equal to several times your premium payments.
- The death benefit is reduced depending on how much long-term care benefit you use. However, some policies guarantee a small percentage of the full death benefit even if you use up the allocation for long-term care.
- To qualify for a combination policy, you need to take a medical exam and provide medical records. You pay less for the coverage if you are healthy.
Advantages of life insurance with long-term care benefit
It is a good investment. If you have money to spare, placing it in this combined policy is better than in a low-yield account, or worst, just spending it.
Also, there are no premium hikes when you pay a lump sum or with a limited number of payments. This is a lot different than traditional long-term care policies where premium hikes happen often. You have the option of a money-back guarantee for a certain period of time, too.
Disadvantages of a combined policy
This is not for you if you only need life insurance. A regular term or permanent life insurance policy will suffice. Also, combined policies work with permanent life insurance. In case you only want term life, then go for this coverage, which happens to be much cheaper, too. Finally, if you cannot afford to pay the lump sum, then it is best to check out other options.
Always consider your needs before applying for a combination policy. Check with insurance companies and shop around to see what is available. Life insurance with long-term care benefits is a complex product and its cost and benefits vary. Take your time to study it and work with an advisor to make the right decision before you buy.