Last time we discussed a new life insurance product that is available to help people with their long-term care planning. For those who are interested, we will go a little deeper into the details today. As we mentioned before, these life insurance products are being referred to as combo products, because in addition to having a death benefit, they also have a benefit that becomes available in the event of a terminal or chronic illness or condition. This accelerated benefit is sold as a rider to a standard life insurance policy.
While each policy has its own attributes, the accelerated benefits on a combo policy can typically be used for a variety of reasons. For instance, a Wall Street Journal article on combo policies reported how these benefits can be used for expenses ranging from building a wheelchair ramp to hiring a caregiver. But, buyers of combo policies should expect to pay a premium for this additional security. Those who purchase a rider for the accelerated benefits can see an increase in their life insurance premium of up to 20%. And, these policies are generally limited to paying no more than the amount of the death benefit, even if the policyholder’s long-term care expenses exceed this amount.
In the end, combo policies may provide another alternative for long-term care planning, but they certainly have their limitations. The truth is that planning for long-term care is simply not an easy thing to do. Long-term care is extremely costly, and financing such care can be difficult, whether it is doing so out-of pocket or by purchasing an insurance product. Many times, people find that Arizona Medicaid planning provides the most workable solution for their long-term health care needs. While making these tough preparations, it is always wise to consult with a qualified Elder Law attorney.