Until recently, seniors were given just 1 option for purchasing life insurance as well as long-term care insurance. They had to purchase and pay for 2 separate policies to gain the peace of mind that comes with having a financial plan for those stages of life. Today, seniors can purchase what is known as a hybrid long-term care insurance policy to simplify the process, improve chances of being approved, and experience cost savings.
Here are some commonly asked questions about hybrid long-term care insurance.
How Does It Work?
Hybrid long-term care insurance policies are generally set up like this: a life insurance plan is purchased and a long-term care insurance rider is added to the plan for an additional premium (usually approximately 50% of the life insurance premium). The premium for the long-term care insurance rider is often less than purchasing a long-term care insurance policy independently, providing benefit to the consumer both now and when they need the policy to cover expenses.
Who Provides Hybrid Insurance?
More companies are getting on board with the hybrid long-term care insurance model, understanding the benefit it offers to consumers and insurance carriers alike. However, those serving the largest market share right now are Nationwide, Lincoln Financial, and OneAmerica.
What Are the Benefits?
Purchasing hybrid long-term care insurance may be less expensive for many seniors. However, the most significant benefit is that it's easier to get coverage despite a pre-existing health condition that may have prevented the senior citizen from getting coverage elsewhere.
What Else Should Seniors Consider?
The most important thing to remember is that many insurance carriers allow the subscriber to add on a long-term care insurance rider when enrolling in the policy, but may not allow them to add the rider later. It's important to ask upfront whether long-term care coverage can be added at a later date or not and then make your decision about coverage accordingly.
To learn more about your long-term care options and insurance, refer to our Roadmap to Long-Term Care.