Planning for Long Term Care has evolved over the years. What was once a rite of passage for family has now been mostly outsourced to licensed professionals - caring for our elderly. While most Long Term Care is actually funded via state welfare assistance programs, anyone with assets should be planning for the very real possibility of needing Long Term Care (about 1 in 2 once you live to age 65) and how this will be funded.
After government programs, self pay is the second largest payer of Long Term Care services, followed by insurance. It’s obvious that “most” people have chosen to self insure rather than transfer their personal risk of needing Long Term Care over to an insurance company through the purchase of Long Term Care Insurance.
The Problem: People Forego LTC Insurance
With odds of using a policy much higher than a house fire or car wreck, which most still buy insurance for, why haven’t consumers jumped in to LTC insurance in higher proportions? One impediment for many people is the fact that they may buy a Long Term Care plan and never make a claim - effectively making them feel as if they’ve wasted the premiums paid.
A Solution: Hybrid Policies with Guaranteed Payout
Insurance actuaries determined that they could help people plan for the risk of a catastrophic need for Long Term Care while still guaranteeing a return of premium by combining Life insurance, which often has a linked cash value, with Long Term Care Insurance. The hybrid was born, and is now found in several permutations offered by major insurance companies like John Hancock, One America, Nationwide, Lincoln National, and Pacific Life.
Premium Payment Options
You can opt to pay for these hybrid policies in multiple ways. When doing Long Term Care planning, it’s important to weigh the differences and pros and cons of some of the various payment methods. For some, a single premium is convenient and do-able. For most, an annual premium is more manageable.
When evaluating any insurance policy, but hybrids in particular, it’s important to evaluate the specifics of any policy you’re reviewing. Request quotes from multiple hybrid policies from us today. We’ll be glad to share the options available to you and provide sample policies and descriptions of benefits available versus premiums paid.
"We started with a local agent but quickly realized we may be paying too much for LTC coverage. After a discussion with LTC Tree, we determined that there was a better way. We ended up with a guaranteed premium and could not be happier.David P., Palentine Illinois