We get older every day and as we do, we have our eye on retirement. However, along with retirement, there is also a concern over the possibility of getting sick and needing long-term care.
To rest assured you’ll be taken care of when that time comes, the team at Hyers & Associates can help you sort through long-term care insurance options. We’ll help you compare costs and benefits of the best plans available.
Who Needs an LTC Insurance Policy?
At age 65 one in four individuals will need up to 2 years of long-term health care. Some people may need up to 5 years of long-term care. Still others will need care for many years.
Nursing home rates continue to rise and can run up to $100,000 a year, so having a long-term care plan is a smart thing to have in place. These popular policies also pay for care in your own home or an assisted living facility.
What is a ‘Hybrid Policy?’
Hybrid insurance combines a long-term care policy as a part of another permanent insurance policy product, such as a whole life insurance policy or annuity.
With most hybrid policies, when long-term care is needed the policyholder would withdraw funds to cover the needs from the hybrid insurance policy. Once that money has been exhausted the insurance company would then take over the long-term care coverage.
Policies provide benefits until your pool of money runs out, but some plans available for purchase will pay benefits for a lifetime. You can also add inflation protection to most plans in order to keep pace with the rising cost of care in the U.S.
Advantages of a Hybrid Policy
If you decide to want to cancel your hybrid policy, there is usually an opportunity to recover some – or all – of your premiums paid. With most traditional LTC care policies, should the policyholder pass away before using the policy, the premiums paid would be lost.
The money would just be gone and that’s bothersome, but not so with hybrid LTC. These plans can provide monetary benefits to you, your heirs or your estate.
These are the benefits of a hybrid policy:
1) Receive Premiums Back
With a hybrid policy usually, you can get most – or all – of your premiums back after the surrender charge period.
2) Tied to Whole Life Insurance
Also, with a hybrid policy tied to a whole life insurance policy, in the event of an early death, the value of the policy will be left to the named beneficiary. Annuity plans work the same way.
If you are not in need of the care, you or your beneficiaries will benefit from the polcu and any growth it provides. This brings great peace of mind. And hybrid life plans can avoid income taxes as well.
3) Greater Chance of Being Accepted
Lastly, a hybrid policy can be advantageous in that underwriting ca be avoided. Someone having minor health problems may have a difficult time qualifying for a traditional long-term care policy – or their premiums may be increased.
If long-term care is made a part of another insurance policy there is a greater chance that the person will be accepted.
4) No Future Premiums
The best part about hybrid plans is you can pay for them in one lump sum – or just a few fixed premiums. You’ll know exactly what your total costs will be up front.
This is much different than traditional plans that can (and will) raise your rates in the future. Many consumers have had to later surrender their old, traditional plans because of cost increases.
When Should You Start Looking for LTC?
The best time for looking for a long-term care insurance policy is when you are in your 50’s or 60’s. You must be healthy enough to qualify for the insurance, however.
The older you get, the greater your chances are of being rejected for this type of insurance. You want to apply before any signs of poor chronic health conditions occur.
We Can Show You Several Options
The team at Hyers & Associates can show you many options that are available for long-term care hybrid insurance policies. Give us a call and we can help you to choose the best policy for your situation. Don’t wait until you have no options available.
The longer you wait to make a decision on your long-term care, the fewer options you’ll have. Call us today and we can help you find peace of mind knowing you’ll be taken care of.