In last week’s blog, we discussed how vital long-term care insurance is. We described a story in which a woman in her 70’s had to go back to work full-time. The cost of putting her ailing husband in a nursing home ate away at the couple’s savings. The story is devastating but happens often. There is so much information to share about long-term care insurance that we couldn’t fit it all in one blog. Here is more information about long-term care insurance. Today we’re going to focus on what types of long-term care insurance exist.
Traditional Long-Term Care Insurance
This type of policy ensures that regardless of where you need care, you’ll have money to cover some portion of the bill. It typically kicks in when you can longer perform at least 2 out of 6 of your daily activities or more. Benefits usually have a 30-90 day wait period before they become effective. Because the cost of staying at a nursing home is so expensive, traditional long-term care insurance is necessary to combat wiping out a savings account, especially if the stay is lengthy. Traditional long-term care insurance can cover your time at a nursing home facility for a set amount of years. Four years is typically the average.
Another benefit of this type of insurance policy is that you can add an inflation rider onto the plan. An inflation rider can adjust your benefits over time, which allows for inflation. Inflation increases your daily benefits over time.
Long-Term Care Insurance and Life Insurance Combined
Another option that has become prevalent over the years is combining long-term care insurance with life insurance. A hybrid policy allows you to access the death benefit (money that beneficiaries would receive if you passed). Even while you are alive, this money goes towards paying for long-term care. If you don’t end up using long-term care, your heirs would still get the full payout. These premiums are typically fixed or noncancellable, and usually, the payout is a large, one-time lump sum. Hybrid policies are generally the last resort option and work best if you’re ineligible for traditional long-term care insurance due to medical underwriting.
How To Go About Investing in Long-Term Care Insurance
Contact us! Our insurance brokers have your best interests at heart. Insurance agents typically represent a company and want what’s best for the company, but we want what’s best for you. That’s the difference.
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