What you need to know about combination insurance policies.
When it comes to long term care insurance, many people are reluctant to buy because they don’t want to spend money on something they may not use. That being said, failing to secure a long-term care insurance policy could prove disastrous if you do need to go to a nursing home or require assisted living or home healthcare services. Fortunately, there are new types of insurance policies that combine long-term care and permanent life coverage. Here’s what you need to know about this multi-faceted form of insurance.
- 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.
- How Do I Get a Combination Policy?
Every combination policy is different and therefore has different application requirements. Some insurers will require you to submit your medical records and take a medical exam to qualify for coverage. Other insurers offer simplified underwriting, which means that the application process is far less strict. Please note that insurance companies that offer simplified underwriting may place limits on your coverage or charge more for coverage. The average cost of a single-premium combination policy is about $75,000.
This is what you need to know about combination policies. Do you have questions regarding your long-term care or life insurance needs? If so, then contact the experts at Udell Family Insurance We are ready to get you the coverage that you need today.