Long-Term Care Protection Alternatives

Can hybrid life insurance help to pay the costs of long-term care?

Long-term care insurance is designed to cover a wide range of services for care of the elderly, including personal and custodial care in a variety of settings, such an individual's home, a community organization, or other facility. These insurance policies reimburse policyholders for certain amounts of services to assist them with daily activities such as bathing, dressing, or eating.  

The cost for long-term insurance is based on a number of factors, including:

  • A person's age at the time the policy is purchased
  • The maximum amount that a policy will pay per day
  • The length of time (days or years) that a policy will pay

Currently, the cost of long-term care insurance is becoming more expensive. Moreover, many consumers may not qualify for such insurance, depending on their age and any pre-existing health conditions. In light of these situations, one alternative is so-called "hybrid" life insurance policies.

What is a hybrid life insurance policy?

Hybrid policies are essentially life insurance policies with a long-term care rider, or additional coverage that can be added to an existing policy. Some common riders include the accidental death rider, the guaranteed insurability rider, the waiver of premium rider, and the family income benefit rider.

Do I need a long-term care rider?

Hybrid life insurance policies are well-suited for individuals in their later 40s to early 70s who are concerned about rising long-term care costs as well as protecting the value of their estates. These policies are also more cost effective than traditional, stand-alone long-term care insurance. However, a long-term care rider cannot be added after life insurance has been purchased.

Who is eligible for hybrid life insurance?

In order to qualify for hybrid life insurance, an individual will need to undergo a medical exam and insurers may also require copies of medical records and physician statements. Ultimately a long-term care rider will provide assistance in the event of an illness or injury that prevents an individual from performing daily activities like eating or bathing.

In the end, there are limits to how much protection long-term care insurance and hybrid life insurance can provide. If care is needed for an extended period of time, the policy could be depleted and other assets may be needed to pay for long-term care. The best way to protect the assets of an estate and ensure for long-term care is to consult with a qualified estate planning and elder care attorney.

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