What are Long Term Care Hybrid policies, and are they right for you?
by Roxie Muñoz, CLU®, FLMI
Clients today have many more options to assist with covering a portion of a chronic illness. In the past, the only option was to purchase a traditional long term care policy and pay annual premiums for insurance coverage you may never use. And, the premiums are not guaranteed so could increase several times.
Newer generation policies are available that blend several types of insurance coverage into a single contract. These Combination or “Hybrid LTC” policies combine the benefits of an annuity or life insurance with long term care protection. If you never need LTC services, these contracts can provide either an annuity cash value or a life insurance death benefit.
You may have mentally “set aside” some investment dollars which you plan to utilize should a long term care illness occur. By repositioning these monies into one of these policies, the amount will automatically increase for long term care needs.
In addition, the cost of the LTC benefits will not be includible in gross income; it will simply reduce your investment in the contract. You may even be able to exchange an existing annuity, life insurance policy or long term care contract tax-free to one of these policies.
Our office can provide more information, and design a personalized plan based on your financial situation.