Life Insurance Vs Long Term Care Insurance

Individuals have purchased long-term care insurances that help them cover the rising expenses. However, some insurers also offer a combination of life insurance with extended features and benefits of long-term care plans. 

A comparison of both the plans is important to understand which option suits you well. 

What is a Long-Term Care Insurance and Combination Life Insurance? 

Long-Term Care Insurance provides funding for long periods. They offer coverage for nursing, health home care, and day care (personal or adults) of individuals of or more than 65 years of age or diagnosed with a chronic or disability that requires regular management. This traditional long-term care insurance is similar to home owner’s insurance. It believes in Use it or you will lose it, which means if you don’t use your insurance during your policy time, then no benefit will be provided to you from the premiums you have paid all those years. On the other hand, Combination life insurance locks in the premiums you pay with the death benefit. Then that amount will be received by the nominee/beneficiary. In this way, the money paid every month will be provided even if you don’t use the policy benefits. 

Combination life insurance is a lasting life insurance policy along with a long-term care rider. The rider helps you in enhancing your coverage and you can tap into your long-term care savings if you require. A policyholder is not required to pay the premiums paid. If you don’t use the savings in this plan, then that amount will transfer to the death benefit. Other riders can also be added to the policy such as accelerated death benefits, critical illness. Combination life insurance and long-term care insurance also share some common benefits. In both policies, the policyholder is required to meet all the health and cognitive standards to get complete life coverage. Both plans are flexible as they pay the claims after the policyholder suffers expenses in long-term care. In the case of long-term care, payments are usually free of income tax. 

Combination riders offer various benefits: 

• They offer an option to extend the rider for a long time or extended care expenses that continuers these benefits after the death benefit of the policy and inflation (option) protection benefit is also there. 
• It also offers to return premiums in case your state changes. 
• It also provides a wide variety of benefits such as home care, personal and adult daycare, and nursing facilities at home. 

What Are The Coverages Under Long-Term Insurance? 

The long term takes care of the expenses of the following: 

• Home care- Nursing 
• Adult and personal daycare services 
• Assists the facilities required for living 
• In-home care 
• Care management 

Comparison Between Combination Life Insurance and Long-Term Care Insurance 

Some differences exist between Long Term Care Insurance and Life insurance plans on the basis of which you can decide your suitable need of life insurance. Here’s a quick laydown of Life Insurance vs long term care insurance:

How To Buy Combination Life Insurance? 

Unlike long-term care insurance, various insurance providers offer hybrid life insurance. You are advised to consult your insurer to add a long-term care rider, in case you have already a permanent life insurance plan. As it is a permanent plan, so it is also possible to add other riders to create a policy that suits you and your requirements. After selecting the right policy, the insurance company will ask some health-related questions. Based on this, the insurer will decide the approval.  

What To Do If Your Selected Long-Term Care Policy Is Expensive? 

Sometimes, you select a policy that does not suit your requirements. So, people who are facing expensive long term care problems have the following options: 

• Always keep the policy, though you have to pay higher rates 
• Ask your insurance agent or advisor about any alternative option. 
• You can also terminate the policy and lose all the money that you paid till that time 
• Terminate the policy and get another one with smaller payout options 
• Drop it and go for a combination life insurance plan 

Wrapping It Up!  

If you want to buy a combination policy, know about your need of life insurance and then compare premium rates from different insurers and moreover, check the financial power of different insurance providers before buying any policy. A combination policy is a quite complex insurance product and their features and benefits vary as per their companies. Always consult a financial advisor who is aware of this product.