Long-Term Care Insurance

Long-Term Care Insurance has come a long way since the 1980’s.  We’ve all heard the horror stories of people buying LTC policies only to have their premiums skyrocket over time. 

These days LTC insurance comes in a variety of different ways:

• Single Premium. Single premium is when you dump a lump sum of money into a policy and never have to make another payment again.  This option is good for someone who has a lot of money sitting in CD’s at a bank earning very little.  Putting a portion of that money into an LTC policy can offer protection.  These policies will allow you access to your money in case you need it in the future as well as offer a death benefit.   With the death benefit, if you never use it, your family will get the money back.
• Traditional Long-Term Care. Traditional LTC is a pay-as-you-go type of policy.  Think of it like your car insurance.  You can pay monthly, semi-annual or annually.  These policies come with a variety of riders that you can add such as protecting your premium payments.  Traditional LTC policies can be structured to cover you for a specific number of years as well as the specific amount of coverage you think you might need. 
• A rider that is built on another investment product.These days many annuities and life insurance policies are offering an optional LTC rider much like the single premium type we described in #1.  Some of these are competitive and some are not however it allows you to somewhat “knock out two birds with one stone” if you need life insurance and LTC coverage.

Chances are 50/50 that you’ll need some type of long-term care during your lifetime.  The difference these days is if you buy a policy and don’t use it, then your family members can get the money back through a death benefit.