Long Term Care Insurance - Hybrid Advantages

While many Long Term Care traditional insurance policies offer initial lower premiums, there are several reasons to consider Hybrid (or combo) policies. Hybrid (or combo) policies are creative alternatives for traditional Long Term Care insurance that many people don't know about or don’t bother to research. 

  1. One reason that Hybrid's may appeal to many folks is that their premiums are locked in and won’t increase. Whereas with a traditional Long Term Care insurance policy, the premiums are NOT locked in. Meaning that your traditional Long Term Care insurance policy premiums may increase significantly (and have done so in the past!) For example, in the past they have typically increased approximately 35% to 50% every 5 to 7 years! However with a Hybrid type policy, you can rest assured that you will have level premiums throughout your entire policy, with no increases.

  2. With traditional Long Term Care insurance, many people feel like it is a “use it” or “lose it” situation. If you paid premiums for decades, and you never had to use the long term care benefits, finally you passed away, then your loved ones would not have anything to show for for all that money you invested in that traditional Long Term Care policy over the years. However with a Hybrid Life Insurance / Long Term Care insurance policy any Long Term Care coverage not used remains in a death benefit pool, so you don’t "lose it!" For example, if you have a $250,000 death benefit and only use $50,000 for Long Term Care, the remaining $200,000 goes to your beneficiaries as a tax free death benefit when the insured passes away.

  3. Long Term Care payments can go to the proposed insured and not directly to the caregiver. Some insurance carriers offer indemnity, rather than reimbursement. Basically this means that if a family member or even a friend is providing you care, you can pay them directly rather than the insurance company paying a nursing home, or traditional caregiver directly.

  4. There can be an inflation protection built into the policy.  If an individual uses a permanent product with an Long Term Care or a Chronic Illness Rider, an increasing death benefit option can be provided, which then also provides additional long term care coverage. If you don't use that option for additional LTC coverage, it may lead to a larger death benefit or cash value in the case you want to surrender the policy.

  5. Some Hybrid policies allow you the option to cover “both” spouses in the same policy.

  6. Some Hybrid policy types can even guarantee to allow you to get all your premium money you paid into the policy returned to you at a later time down the road, if you decide you don't want the policy any longer.

The gist is that a Hybrid policy covers you while you are living with Long Term Care coverage, has a death benefit if you die for the people most important to you, and sometimes even allows you can get all your premium money paid into the policy back, if you choose not to continue the policy at a later date. So in other words, with a Hybrid policy you have extra options and you don't have to lose all your money paid into the policy if you never get to use the Long Term Care benefits, like you would with a traditional Long Term Care Insurance Policy!

Contact me at (941) 404-5334 to discuss your long term care options and/or get you started on the right track of getting yourself insured.

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