HYBRID LONG-TERM CARE INSURANCE PLANS
Hybrid Long Term Care Insurance Defined
For people who are concerned about their future long-term care needs but not convinced that traditional policies are the solution for them, there’s a newer kind of insurance option that is growing in popularity. They’re alternatively called “hybrid products” and they typically incorporate long-term care benefits with a life insurance policy or an annuity.
Hybrid Long-Term Care Insurance Policy Have Following Benefits:
- Eating – Feeding Oneself
- Bathing – Bathing Oneself
- Getting dressed – Dressing Oneself
- Toileting – Using a toilet and perform associated personal hygiene
- Continence – Control of one’s bladder and/or bowel
- Traditional Long-term care policies are typically designed on a “per day” or “per month” benefit with lifetime maximums. Any money not used during a claim period is typically rolled over to another benefit period until the lifetime maximum of the policy is used.
How can We Purchase Hybrid Long-Term care Insurance?
Hybrid long-term care insurance can be purchased using the cash values of existing life insurance or annuity contracts without incurring a taxable event.
Life insurance may be a very high priority for your family right now. But over time, your need for life insurance will likely diminish and the need to pay for long-term care may become a higher priority. These policies allow you to serve both needs with one policy.
In short, you’d buy a life insurance policy or an annuity, but the policy would include long-term care coverage as a secondary benefit. If a need arises, you can access the policy’s long-term care benefits to pay for long-term care services. If you never need long-term care, there is a death benefit for your heirs and/or an annuity from which you could take regular payments.
Advantages of Hybrid Long-Term Care Policies
- Can be issued to “uninsurable” individuals (annuities)
- They have death benefits if the insured never requires long-term care services
- Can be purchased using other appreciated life insurance and annuity contracts without incurring taxable events
Disadvantages of Hybrid Long-Term Care Policies
- Premiums are not tax deductible
- Lower initial benefit when compared to traditional long-term care
- More expensive per-dollar of benefit that traditional long-term care
- Not eligible for State “Partnership” Plans