September 14, 2019
Long Term Care insurance is an invaluable insurance product for an aging individual, but unfortunately by the time a person thinks they may in fact need such a policy it is far too late to take a LTC insurance policy out. At that point, even if the individual can pass the medical underwriting, the premiums will be unaffordable. Here are some ways to cover Long Term Care needs with a LTC insurance policy isn’t an option:
Life Insurance With A Long Term Care Rider
Some life insurance products have the option to add a rider to the policy that will allow the policyholder to utilize the death benefit for long term care, should the insured qualify for the services. A benefit of this option is that in the event that the insured does not require LTC services, the policy still pays out a death benefit just like a typical life insurance policy would.
If an individual was in the market for a LTC insurance policy but found they couldn’t pass the medical underwriting, an annuity may be an option. This solution has the added benefit of not being at risk of the (likely, and steep) premium increases that burden so many LTC insurance policies—but an annuity does require a lump sum investment at the outset of the contract.
A Life Settlement may be able to help an individual in need of LTC services and who has a life insurance policy. Many life insurance policies have a premium that rises as we age and when LTC services are required many policy holders feel stuck between a rock and a hard place. Not only are LTC services needed now, but the increasing premiums on the life insurance policy are eating up funds that can pay for the LTC services at an ever increasing rate. With a life settlement the policy holder may be able to sell their life insurance policy, through a licensed life settlement provider or broker, to a third party buyer. The buyer pays the policy holder an amount less than the death benefit of the policy but more than the cash surrender value (if there is any), and in exchange the former policy holder no longer has any premiums to pay.