With the costs of healthcare and, in particular, long-term care ever rising, many are left wondering how they can afford to access the coverage they may need later in life. Rest assured, there are options available. If you’re just getting started with your search, check out these potential ways to pay for care. Long Term Care Insurance has become increasingly popular in recent years, largely due to the flexibility it can provide when choosing a preferred care option. However, many worry that this type of policy may be a poor investment if they end up not needing its full benefits. If you find yourself sharing this concern, yet seeking an option that can provide both the flexibility and coverage you need, it may be time to think about a combination life and long-term care insurance policy.
What is Combination Life and Long-Term Care Insurance?
Unlike traditional long-term care insurance, combination policies guarantee that you or your beneficiaries will receive the full benefits of your policy. Essentially, the policy allows its holder to choose whether or not to receive some or all of the long-term care benefits. Any amount that is not used in the policyholder’s lifetime will then be paid to his or her beneficiary in the form of a death benefit much like a traditional life insurance policy. This can provide peace of mind by ensuring that regardless of circumstance, you will recuperate your money in some way.
How Does a Combination Policy Work?
Regardless of whether or not you eventually see your policy benefits in the form of long-term care or a death benefit to your beneficiaries, the benefit you receive will be greater that the amount that you pay. Most often this payment comes in the form of a single, large premium paid once. However, several smaller but still large premium payments over a series of predetermined years, or smaller perpetual annual payments are possible as well. The cost of these policy varies depending on the amount of coverage that you desire, though average between $75,000 to $100,000. Although not all policies are identical, consider the following example. A 65-year-old woman pays a single $100,000 premium. This could entitle her to nearly $600,000 in long-term benefits paid in monthly installments of roughly $8,000 over six years or a death benefit of nearly $200,000 to her beneficiaries if she never uses long-term care. Any amount of care that she does use would be subtracted from the total amount paid in the death benefit. It is important to remember that not all policies are the same and does not represent all combination policies. However, combination life and long-term care insurance policies do typically provide up to six times the premium amount in long-term care benefits and nearly two times the premium amount in death benefits.
Is a Combination Policy Right for Me?
This is a great question that is highly dependent upon your personal situation. Always speak with an insurance professional prior to purchasing any policy. This said a combination life and long-term care insurance policy may be right for you if you worry that you may need care in the future and have the assets available. This type of policy can be costly. According to the American Association for Long-Term Care Insurance, these policies typically require a minimum of $50,000 in order to provide the sufficient coverage for most people. However, if you have money that can be moved from a low-interest account and think that you may need long-term care down the road, take a look at some resources that can help you find the care you deserve.