Long-Term Care Insurance Options | Frequently Asked Questions

Long-Term Care Insurance

A recent survey indicated that 90% of Americans do not have a practical plan to pay for long-term care. Almost half mistakenly believe that health insurance or a government program, for example Medicare, will pay the long-term care costs.

Long-term care insurance pays for nursing-home care and other expenses not covered by Medicare, supplement plans, or health insurance – for policyholders who cannot live independently. Long-term care insurance has grown in popularity as policy holders don’t want to burden their loved ones if they fall ill.

Insurance Options

Traditional

The basic policy is a product similar to term life insurance. Buyers pay a set premium that increases as they age, capping at a maximum amount spelled out in the policy. Buyers have the opportunity to select how much money they would like to receive each month for long-term care, and how long the benefits would last.

Hybrids – Life and Long-Term Care Combination

One option is to include a rider allowing policyholders to receive advance payments (from their life insurance policy), using these funds to pay for long-term care. Another hybrid option offers a rider to extend the death benefits – once they’re exhausted – to continue to pay for long-term care. All these proceeds are tax-free.

 

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