Can You Secure Life Insurance and Long-Term Care Coverage Together?

Can You Secure Life Insurance and Long-Term Care Coverage Together?

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.