Long-Term Care Insurance is used for an individual that may have a disability or needs daily care over an extended period. It is difficult to predict your future long-term care needs. Long-Term Care Insurance can help you financially afford more extensive care, should you need it. Insurance plans offered through most employers do not cover this type of assistance and Medicare only covers a temporary stay in a nursing home or a limited amount of in-home care.
It is important to keep in mind that if you purchase a Long-Term Care Policy while you are in good health you can purchase the plan at a reduced cost. If an individual is in poor health, it can be difficult to get underwriting approval for Long-Term Care coverage.
Additionally, the premiums often increase as you age and income often decreases. Having a Long-Term Care Policy incorporated into your estate plan can ensure that you are able to afford the care you may eventually need.
Stand-Alone Long-Term Care – Stand-Alone policies work the same way as an auto or home insurance policy. With numerous providers and options, it is important to select an affordable plan best suited for your needs.
Fixed Annuity with Long-Term Care Benefits –This is a hybrid plan that combines an annuity with Long-Term Care benefits. You pay extra (usually 2-3%) for Long-Term Care benefits which are included in the annuity. A hybrid plan can be less expensive than a Stand-Alone policy. You retain access to the funds you’ve invested into the plan. If you’ve been denied for coverage under a Stand-Alone Long-Term Care Policy you may be able to get coverage without health underwriting.
Life Insurance with a Long-Term Care Rider –This is also a hybrid plan and is great for those who have already decided a Life Insurance Policy is right for them. Basically, it is a Life Insurance Policy that allows you to pay a fee or percentage to receive Long-Term Care coverage. Should your assets become exhausted, the death benefits are accessible for Long-Term Care (usually on a prearranged schedule). At death, your beneficiaries will receive the unused portion of the benefits.