The nature of long-term care and life insurance plans has been quickly changing in these uncertain financial times. Today’s buyers are often reluctant to spend large amounts on items with benefits they’ll see much later, if ever. In order to counter this trend, the insurance industry is now offering hybrid policies which combine long-term care benefits with term life insurance.
Choosing the long term care might be good
Generally mixed life insurance policies utilize universal life, in which a portion of the death benefit might be used early to help pay for long-term care should it become necessary. These mixed policies have been available for a while but have recently been gaining popularity. Having two products in one is a great deal for some. Several consumers like hybrid products for this reason. It may never be necessary to get the long-term care. Still, the policy holder can get life insurance upon death.
Standard policies in decline
Gebworth Financial Inc., states that mixed policies doubled in sales by 2010. There has been, in just the last five years, a decrease of nearly 25 percent on traditional long-term-care insurance plants.
John Ryan is a Colorado-based broker. “Most people who purchase hybrid insurance aren’t getting it because they want life insurance,” he said. “They’re getting it because they need long-term-care insurance, and the sales pitch that you are able to get your money back no matter what is quite compelling,”
Retired class growing rapidly
About 69 percent of Americas turning 65 every single day will need long-term care eventually, according to Washington-based lobbying group for retirement homes, LeadingAge, with those numbers doubling by 2040.
The way to use hybrid policies
Several mixed policies are currently available. There’s a huge variation in them though. Typically an individual is given a cash-value life insurance policy with the choice to use it for long-term care benefits instead. Death benefit values will be reduced though if the long-term care benefits are used.
May not be the choice for you
A two-for-one product does seem nice to several individuals. There are a few things to consider though. With a combined product, you’ve to follow the rules strictly. Generally a hybrid product does not cover home care. It does not change for inflation either. The different long-term care accessible to be covered is typically specialized. It isn’t possible to predict needs for long-term care. Still, life insurance corporations make an effort to do this. It is generally more costly to get a mixed product than it is to just get a long-term care policy, although it is cheaper than getting both goods separately.
Read up on it
As with any large investment, the consumer needs to be cautious and well-informed when shopping for these products. An impartial financial adviser can help you. Get some advice.
Citations
Dail Finance
dailyfinance.com/2011/05/19/term-life-insurance-declines-as-hybrid-policies-gain-ground/
Elder Law Answers
elderlawanswers.com/resources/article.asp?id=7812&Section=4&state=
Bloomberg
bloomberg.com/news/2011-05-18/insurers-pair-long-term-care-with-life-to-entice-older-buyers.html
1 comment:
Term Life is the only way to go to protect your family. Put your money in a separate savings; never combine life insurance with savings. Life insurance companies that sell whole life or combine life with savings is intended only to benefit the companies that sell it!
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