Securing long-term care coverage with guaranteed returns.
Long-term care insurance is important because it covers the costs of an ongoing or chronic health condition. However, if you don’t end up needing long-term care services, then the money you spent on this type of insurance goes to waste. This is why so many people are hesitant to invest in a long-term care insurance policy. To address this concern, a new type of insurance policy was introduced. Here’s what you need to know about combination insurance policies; policies that combine long-term and life insurance coverage.
- Combination Policies
Insurance policies that offer coverage for long-term care and life insurance are known as combination policies. These policies cover the long-term care expenses that regular health insurance or Medicare will not. If you do not end up needing your long-term care coverage, then the insurance company will convert the money into a death benefit payable to your beneficiaries.
Depending on the specifics of your policy, you will pay a lump-sum premium or several large annual premiums (usually over the course of ten years or less). Your policy will set aside a pot of money that you can use to pay for long-term care expenses. Typically, this amount is equivalent to several times your premiums. If you access your long-term care insurance, then your death benefit is reduced. Some policies will guarantee a percentage of the full death benefit (usually around 10%), even if you use all the money allocated for long-term care.
- The Benefits of Combination Policies
The most obvious advantage of securing a combination policy is that you will get a return for your investment, whether that be long-term care coverage or life insurance coverage. Additionally, because combination policies require a lump-sum premium or a limited number of premium payments, you usually do not need to worry about premium hikes.
- The Disadvantages of Combination Policies
Before you decide to secure a combination policy, it’s important to consider the downsides of this coverage, as well. To start, if you only need life insurance coverage, then you are better off securing a dedicated life insurance policy. This is because life insurance policies typically offer more coverage than combination policies are designed to do. Additionally, combination policies are seen more as a supplemental form of coverage. This means they work best for people who already have a life insurance policy in place.
This is what you need to know about combination policies. Do you have questions regarding your long-term care or life insurance needs? If so, then contact the experts at Randy Jones Insurance Services in Pleasanton, California. We are ready to get you the coverage that you need today.