For years, insurance companies have offered long-term care policies to consumers that provide various benefits for nursing home expenses, as well as coverage for care that can be received in an assisted care facility, at home, and from a variety of other sources. Typically, though, these benefits have been provided via a stand-alone long-term care insurance policy.
Over time, however, new products have been developed in order to meet the changing needs and desires of consumers. Now, in addition to stand-alone long-term care insurance policies, there are also combination product designs. Such products can often involve a qualified long-term care rider that is attached to either a life insurance policy or to an annuity.
One of the biggest benefits to these combination products is that the policy holder (or their named beneficiary) will obtain at least some amount of benefit from their premium payments – regardless of whether or not they need long-term care services.
This can actually be viewed as a win-win situation in that an insured will either use some or all of the long-term care coverage and / or a named beneficiary will receive life insurance death benefit proceeds.
Combining Life and Long-Term Care Insurance Protection
A combination life and long-term care insurance plan allows an insured to obtain two forms of protection – all within just one single plan – and there are actually two ways in which this can be accomplished.
With one option, a policy holder can deposit a single lump sum premium. Here, the insured is able to receive a set amount of long-term care benefits if he or she needs covered care. However, if long-term care benefits aren’t used – or if funds are leftover – a named beneficiary will receive the remaining death benefit proceeds from the policy.
In this case, the long-term care benefit is typically set as a percentage of the amount of dollars in the policy. For instance, if the policy contains $200,000 and the benefit for long-term care is 2% of that, then the insured will have $4,000 per month to use for their care.
The other combination life and long-term care insurance coverage entails placing an optional rider for long-term care coverage on to a base life insurance policy. Unlike the single premium deposit, these policies will generally require ongoing premiums.
These plans work as a regular life insurance policy that pays out a death benefit should the insured pass away. However, the long-term care rider provides “living benefits” to the insured should he or she qualify for a long-term care need.
Is Combining Coverage Right for You?
If you’ve been holding off on purchasing long-term care insurance because you’re afraid that you may pay out thousands in premium dollars, but never make use of the benefits – a combination policy could just be the ideal way to ensure that you or a loved one obtains a return from your paid-in capital.
For more information on how a combination policy can work for you, contact us. We work with more than 40 insurance companies, and we can help you in finding the plan that works best for your specific coverage needs and goals.
Brad Cummins is an independent life insurance agent and owner of Local Life Agents, one of the nation’s leading independent insurance agencies, offering life insurance products in all 50 states. Learn more about Local Life Agents at www.locallifeagents.com. Follow Local Life Agents on Twitter @LocalLifeAgent.