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Paying for long-term care always raises the question: “Is it really better to be safe than sorry?” For many people, this kind of insurance would be immensely valuable if they ever found themselves in need of a nursing home, assisted living, or palliative care. Proponents may try to scoop up these policies no matter what, with the familiar kafkaesque chorus of “better have it and not need it, than need it and not have it.” However, there’s a mighty cost issue. If you never need this type of attention or treatment, then you have, quite frankly, wasted thousands of dollars. Luckily, Orange County Register’s Barbara Marquand reports on a policy that combines long-term care with life insurance.
Basically, these combination packages allow you to take the safe route, as your money goes towards long-term care not generally offered by Medicare or health insurance. If you don’t actually wind up using these benefits (or if you don’t max them out), the policy will pay out a benefit to your beneficiary. Marquand provides a very understandable breakdown in her article, but as you’re reading this, keep in mind the key takeaways:
- The average cost of these policies is around $75,000, and the benefits of long term care are several more than your premium payments.
- The long-term payout and the beneficiary’s payments will be in some sort of equilibrium. The less long-term care you receive, the more money is paid in the death benefit, and vice versa.
- Your current state of health will play a role in the overall cost for coverage, or whether you can receive it at all. Some issuers require a physical, for example.
Although these combination policies offer a number of benefits– like acting as solid investment and potential money back guarantees– keep in mind that they are expensive. That $75k includes the long-term care, so if you don’t actually think you’ll need it, you’re probably better off passing over the combination for a life insurance-only policy. In that case, it is better to search for a more traditional life insurance policy. It is also ill-advised to opt for a combination plan if you are only in need of temporary life insurance. Lastly, if getting this combination means going broke, stay away. There’s no need to risk everything when you’re not even sure if you’ll need the offerings.
Marquand parts with a few words of advice for those who may decide on the combination. In addition to comparing quotes from various agencies, definitely be sure to look into their financial strength ratings. You don’t want to wind up depending on your policy if they can’t pay out!