Long-Term Care Insurance

Hybrid Long-Term Care Insurance

Hybrid long-term care insurance and key-person life insurance with long-term care riders have almost completely replaced traditional long-term care insurance options. The main reason is that traditional long-term care insurance policies do not come with guarantees—most importantly, they will not guarantee that premiums won't increase. Even after several years of paying premiums, a policyholder could receive a notice requesting additional annual premiums or an option to decrease benefits at the current premium rate.

Traditional policies are also what we call use-it-or-lose-it policies. If a policyholder does not need long-term care during their lifetime, the policy essentially has no value once they pass away. Hybrid policies, on the other hand, offer guaranteed premiums, guaranteed coverage to age 121, a death benefit should the policyholder pass away even if they have used some or all of their long-term care benefit pool, options for getting premiums back while alive, plus all the other features that come with traditional policies like care coordination. We write a large amount of these policies each year and can provide a detailed plan comparison with some basic client information.

Life Insurance with a Long-Term Care Rider

Another way to purchase long-term care coverage is through a rider on a permanent life insurance policy. These policies typically provide a larger life insurance death benefit than hybrid long-term care products and can be a great way to cover two needs at once.

These policies can be customized in several ways, including the number of years premiums are owed, how long the contract is guaranteed for, and the ability to dial in the death benefit and monthly long-term care payout. If you have been sent an illustration by an agent, it is best to thoroughly review each item or have experts like us explain each detail to you.

Traditional Long-Term Care Insurance

Traditional long-term care insurance has a niche market these days. For most, we do not recommend them because the premiums are not guaranteed and have and will increase over time. The benefit is only available if you are on a long-term care claim, and there is no return of premium or death benefit options with most currently available products.

There is a fair argument to keep grandfathered plans in place, as they were very inexpensive at the time of purchase. One niche remains: the pricing for single men in their early 60s is reasonable, and we should consider this as an option among others when quoting.

Stop-Loss Long-Term Care Insurance

For those with a significant net worth who prefer to self-insure or partially self-insure, we have created a stop-loss long-term care insurance solution that significantly reduces long-term asset exposure when a family member goes on a claim. The total out-of-pocket premiums are less than a hybrid policy and protect against claims going beyond 2 or 3 years. The stop-loss product provides a predetermined monthly benefit amount for the insured's lifetime.