Traditional Long-Term Care Insurance

This type of insurance commonly provides the most comprehensive coverage available, and can be designed specifically based on your needs. It requires ongoing premiums with the possibility of rate increases over time. Keep in mind traditional LTC insurance has no premium refund feature. That means if you decide to discontinue the policy, you won’t receive any benefits.

These plans may work best for those who are less liquid, have plenty of income to absorb future rate increases, and have no need for additional life insurance. (Inflation options are available to provide the indexing of the LTC benefit both pre- and post-claim.)

Asset-Based Long-Term Care Insurance

Asset-based products combine life insurance and LTC benefits.

Benefits and premiums in asset-based products are traditionally guaranteed. There’s no possibility of premiums increasing or benefits being reduced. Plus there’s always a benefits payout, whether it’s through a:

• Death benefit
• Long-term care benefit
• Refund feature

Another appealing aspect: A streamlined application process, with no medical exams. Inflation options are also available.

With their various policy designs and funding options, these products offer you an alternative to funding long-term care expenses should they arise.

Life Insurance With LTC Riders/Hybrids

Life insurance policies with LTC riders are an excellent funding source for long-term care expenses, provided your primary need is for life insurance protection. These policies allow you to use all the death benefit for long-term care expenses.

The LTC benefit is the face amount of the policy. The annual LTC benefit is a percentage of the death benefit, typically either 1%, 2%, or 4%. There’s always a payout in the form of LTC, life insurance, or a refund of cash values. These policies require medical underwriting for both life insurance and long-term care. It’s possible for clients with impaired health to be approved for one benefit but not the other.

Many life insurance policies contain critical care riders. While these riders mirror some types of LTC benefits, the benefits are often very restricted and limited.

Life Insurance With LTC Riders/Hybrids

If you’re concerned about qualifying medically for traditional or asset-based policies, you might find annuity-based LTC policies are a good fit.

Joint life policies and lifetime-extension riders are also available, depending on your health or the health of the joint policyholder.

What’s the Best Long-Term Care Strategy?

There’s no one-size-fits-all solution to choosing long-term care coverage. Determining the right strategy depends on your unique set of circumstances, needs, and goals.

We can help you sort through the many aspects of long-term care, and how the issue fits into your overall financial plan.