Life Insurance Riders that Pay for Long-Term Care
When you’re planning for the future, life insurance and long-term care will usually come to mind. But did you know there’s a way to get help with both in a single insurance product?
Life insurance helps with income replacement for your family, business continuation, and estate preservation.
Long-term care insurance, meanwhile, helps cover the high costs of long-term care.
And if you think you need both, you may want to consider a life insurance policy that combines a death benefit with a long-term care benefit.
What’s the advantage?
The key advantage here is flexibility, depending on what needs arise. Either you'll use the policy to pay for long-term care expenses, or your beneficiaries will receive the insurance proceeds at your death.
How does it work?
You can pay your premium in a single lump sum, or by making periodic payments. The policy provides a death benefit that can also be used to pay for expenses related to long-term care, should you incur them. The long-term care benefits are generally added to your life insurance policy as one of two types of riders:
Accelerated Benefits Rider
This rider makes it possible for you to access your death benefit to pay for expenses related to long-term care. The death benefit is reduced by the amount you use for long-term care expenses, plus a service charge.
If you need long-term care for a lengthy period of time, the death benefit will eventually be depleted. This same rider also can be used if you have a terminal illness that may require payment of large medical bills.
This option can have tax ramifications, so talk to your tax professional to be sure it’s a good choice for you.
Extension of Benefits Rider
This rider provides long-term care coverage beyond your death benefit. To learn the specifics of the policies available to you, be sure to ask your insurance provider for details.
Things to consider
When deciding whether a combination life and long-term care insurance policy is right for you, talk to your insurance representative about things like:
The kind of long-term care you may want to take advantage of; some forms of care — like home health aids or assisted living — might not be covered.
How the costs compare to purchasing separate policies. Depending on your current age, health status, etc., buying a combination policy could actually cost more.
How it will impact your heirs — particularly if your death benefit is ultimately depleted.
Find Sensible Advice at Horizon Bank
To learn more about the potential offered by these types of insurance policies, or to you review you entire financial plan, call 888-873-2640. Our expert financial advisors will be happy to help! For further details about available policies, talk to your preferred life insurance provider.