Long Term Care Insurance - Asset Based Hybrid Policies
A hybrid long term care insurance policy is a type of life insurance policy that also provides benefits for long-term care services if you need them¹⁴. The long-term care benefits are linked to the death benefit, which means that whatever you use for care is deducted from the amount that your heirs will receive¹². Hybrid long-term care insurance can be a universal or whole life policy, which usually have cash value and guaranteed death benefit features¹⁵. Hybrid long-term care insurance may also be called chronic illness benefits¹⁴.
Some advantages of a hybrid policy over a traditional long term care plan are:
- You don't have to worry about paying premiums for a policy that you may never use, since the policy will pay out either as long-term care benefits or as a death benefit²³.
- You may have more flexibility in choosing how to use your long-term care benefits, such as hiring informal caregivers or receiving care at home²³.
- You may be able to avoid premium increases or policy cancellations that can happen with traditional long term care plans²³.
Some disadvantages of a hybrid policy are:
- You may have to pay a large lump sum upfront or higher premiums than a traditional long term care plan²³.
- You may have to pass medical underwriting to qualify for a hybrid policy, which can be difficult if you have pre-existing health conditions²³.
- You may have less coverage for long-term care than a traditional plan, since the benefits are limited by the death benefit amount²³.
Hybrid long term care insurance policies are not for everyone. They may be suitable for people who want to protect their assets from the high cost of long-term care, but also want to leave something for their heirs or get some money back if they don't need care. However, they may not be affordable or available for people who have limited income or health issues. You should compare different options and consult with a financial advisor before deciding whether a hybrid policy is right for you.
(1) Should I Get Hybrid Long-Term Care Insurance? - Policygenius. https://www.policygenius.com/life-insurance/hybrid-long-term-care-insurance/.
(2) Hybrid Long-Term Care Policies | Meaning, Types, Pros, & Cons. https://www.financestrategists.com/insurance-broker/life-insurance/hybrid-long-term-care-policies/.
(3) How Hybrid Life Insurance Pays For Long-Term Care - Forbes. https://www.forbes.com/advisor/life-insurance/long-term-care-hybrid/.
(4) What Is Hybrid Long-Term Care Insurance? - SmartAsset. https://smartasset.com/insurance/hybrid-long-term-care-insurance.
(5) Does Hybrid Long-Term Care Insurance Makes Sense? - NerdWallet. https://www.nerdwallet.com/article/insurance/hybrid-long-term-care-insurance.