Since more than 40% of Americans needing long term care are under age 65, a long term care (LTC) insurance policy should be part of your financial planning. But LTC insurance can be expensive. Knowing this, some major insurers now offer life insurance that has an LTC option.
These so-called hybrid life/LTC policies often come with a guaranteed return of premium in the form of a life insurance payout to your heirs if you don’t end up using the long-term care portion of the coverage. You may be able to add either an accelerated death benefit rider or a long-term care rider to a hybrid life/LTC policy.
The accelerated death benefit rider is a typical whole life insurance policy, the death benefits of which can be taken in advance payments to be used for long term care of a terminal illness. The LTC rider has long term care built in to your coverage and doesn’t diminish the purchased death benefits.
Though premiums are high on long term care insurance, it’s important to compare that investment to the cost of care, which is about $48,000 (median) annually in an assisted living facility and more than $100,000 a year for a private room. Talk with your insurance agent about options.
