What are my options for long-term care insurance?

There are three main options when it comes to long-term care coverage. They are:

  • Traditional long-term care insurance: Also known as standalone long-term care insurance, traditional policies exclusively cover long-term care expenses in your home or a facility.
  • Hybrid long-term care insurance: Also known as linked benefits or combo policies pair long-term care with life insurance or an annuity. A hybrid policy provides coverage for both extended care in your home or a facility along with a death benefit. If you never need long-term care, your loved ones would benefit from a life insurance payout after you pass away. Hybrid policies have become increasingly popular in recent years.
  • Life insurance with a long-term care rider: Some life insurance policies let you add on additional coverage for long-term care via a rider. A long-term care rider lets you use some of the life insurance policy’s death benefit to pay for long-term care needs while you’re still alive.

The best policy for you will depend on your goals and circumstances. Here are some questions to consider when choosing which long-term care insurance policy is best for you:

  • Which type of coverage is most important to you? Think about how much life insurance, long-term care insurance or both matter to you.
  • How do you want to pay your premiums? Some policies let you pay every year for a set amount of time while others let you pay a lump sum
  • Do you want the option of locking in your premium? Many linked benefits long-term care insurance policies let you lock in your premium. This means you never need to worry about premium increases while you own the policy.
  • How is my health? If your health isn’t great, you may want to consider policies with more relaxed underwriting guidelines.
  • What are the tax advantages? Life insurance benefits are almost always paid out tax free while premiums paid for long-term care insurance can sometimes be deducted from your state and federal taxes. Different policies let you reap different tax savings.

A licensed insurance professional can help you find the long-term care insurance policy that works best for you and your budget. Learn about the three main ways to get long-term care insurance.

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