Learn about combination policies and the benefits that they offer.
When it comes to life insurance, policyholders are guaranteed a return. However, the same cannot be said about long-term care insurance. Because you may not actually need long-term care coverage during your lifetime, many people are hesitant to secure a policy. However, if you do not have this coverage when you need it, then you may be unable to afford the care that you need. This creates a tricky situation. Fortunately, there is a solution that checks all the boxes. Here’s what you need to know about combination policies.
- What are 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.
- How do combination policies work?
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.
- Are combination policies advantageous?
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. Finally, some combination policies offer a money-back guarantee. With these policies, the insurance company will return your premium is you decide that you don’t want your policy after a certain period of time. If you decide that you no longer want your policy before then, you can get a percentage of your premium back.
This is what you need to know about combination policies. Do you have further questions about your life or long-term care coverage? If so, then contact the experts at Steve Wilk Insurance. Check out our new office today at 310 S Main Street, Suite C, Lombard, IL 60148.