Long Term Care (LTC)
Long-term care insurance is a specific type of insurance policy designed to cover the costs of long-term care services that are generally not paid for by standard health insurance or Medicare.
Stand Alone LTC Policy
Single Focus: Its sole purpose is to provide a pool of money to pay for long-term care expenses, such as care in a nursing home, assisted living facility, or your own home.
"Use-It-or-Lose-It" Nature: If you pay premiums for many years and never need long-term care, the policy expires, and you do not receive a return on the premiums paid.
Premiums: Premiums are typically paid on an ongoing basis for the life of the policy. It's important to note that these premiums are not always guaranteed and can potentially increase over time with the insurer's approval.
Customization: You can typically customize the policy by choosing the daily or monthly benefit amount, the benefit period (e.g., 2, 5, or 10 years), and the elimination period (a waiting period before benefits begin).
Annuity with LTC
Dual Purpose: It serves two primary functions. It can provide a steady stream of income for retirement, but if you need long-term care, it can also provide a leveraged pool of money to cover those costs.
Funding: It is typically funded with a single, large lump-sum payment, which can come from savings, an existing annuity, or a qualified retirement account.
Leverage: The long-term care benefit is often a multiple (e.g., two or three times) of the initial investment. This means a relatively modest investment can provide a much larger amount of money for long-term care.
Downside Protection: If you never need long-term care, the money in the annuity can still be used for retirement income or passed on to your heirs, so you don't lose the money you put in.
Hybrid Life with LTC
Dual-Purpose Coverage: The policy is designed to address two financial risks. It provides a death benefit to your beneficiaries if you pass away, and it allows you to access a portion of that benefit while you're still living to pay for long-term care services like in-home care or assisted living.
"Use-It-or-Lose-It" Solution: This type of policy solves the main concern with traditional long-term care insurance. With a traditional policy, if you never need care, the premiums you've paid are generally not returned. With a hybrid policy, if you never use the long-term care benefit, your beneficiaries still receive a death benefit, so the money is not lost.
Funding Options: Hybrid policies can often be paid for with a single, large premium or with a set number of payments over a period like 5, 10, or 20 years, instead of paying premiums for the rest of your life.
Guaranteed Premiums: Unlike some traditional long-term care policies, the premiums for a hybrid policy are typically guaranteed not to increase.annuities is complicated. With decades of experience helping clients and brokers understand crediting methods, caps, participation rates and all nuanced features of indexed annuities, Verity Underwriting Partners is your one stop indexed annuity shop.
Life with LTC Rider
Life insurance with LTC is essentially the same as Hybrid Life with LTC but with a few key differences.
Level Premium Options: Most hybrid life with LTC uses short pay options such as single pay, 5 pay or 10 pay. Life with an LTC rider usually be paid in any number of years to suit your needs
Equal death benefit to LTC: While hybrid life with LTC maximizes the LTC benefit, life with an LTC rider would focus on equal amounts of LTC and life insurance
LTC Rider that can be added to many policies: There are a wide number of products in the industry that have LTC or chronic illness riders that can be simply added to the policy, generally for a cost.
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