Hybrid LTC Insurance 101

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Hybrid LTC Insurance 101

The long term care landscape has changed considerably in recent years. Costs have steadily increased, the need for long term care has grown, and as such, many individuals and their families have found that they are unprepared and financially ill-equipped to address the rising expenses associated with care.

For many years, traditional long term care insurance provided a sound solution for covering long term care expenses, but just as the long term care industry has evolved, so too has long term care insurance to meet consumer needs. Hybrid long term care insurance is one such advancement.
 

Traditional vs. Hybrid Long Term Care Insurance

Traditional long term care insurance operates like many other insurance policies; in exchange for a small premium, benefits are be paid out for long term care expenses. However, similar to auto or homeowners insurance, if you do not make a claim on your traditional long term care insurance policy, you will not receive any benefits. In other words, there is no cash value.

As an alternative option, hybrid long term care insurance operates as both an insurance policy and an investment. With an asset-based strategy, hybrid LTC insurance invests the cash value of your policy to establish a fixed interest rate for cash value growth. These investments then pay for your care in the event of a claim. If you do not make a claim on your hybrid long term care insurance policy, or if you do not spend the full cash value of your policy, your heirs receive a benefit.
 

Some Advantages of Hybrid Long Term Care Insurance

  • Asset-based. Because hybrid long term care insurance is asset-based, it’s possible for your policy to continue growing in value until it is used. It is also possible that asset-based hybrid long term care policies can be tapped for funds if needed. Thus, hybrid long term care operates somewhat as a mix between a retirement fund and long term care insurance plan.
  • Indemnity benefits. Some products will pay cash.
  • Death benefit. If not used, traditional long term care insurance will not pay a death benefit. Hybrid long term care insurance, on the other hand, carries its own value and will pay out a death benefit to your heirs.

 

Speak With a Hybrid LTC Expert

It’s worth mentioning that hybrid LTC plans often have higher premiums than traditional LTC plans, but can also yield greater, more flexible benefits. To discuss these details and learn more about the right plan for you, contact Schneider & Shulman Associates today.