What is return of premium on a long-term care policy?
A return-of-premium feature refunds your premiums — to you or your heirs — if you never use the policy. It is built into most hybrid policies as a death benefit and addresses the "what if I never need care" concern of traditional coverage.
Return of premium answers the most common objection to long-term care insurance: "what if I pay for years and never need care?"
On a hybrid policy, it is built in — because the policy is based on life insurance, your family receives a death benefit if you never use the long-term care coverage. On a traditional policy, it is available as an optional rider that refunds premiums (often to your estate), which raises the premium and may reduce the refund by any benefits already paid.
The trade-off is cost: the guarantee is not free. See what happens if you never use your policy.
General information only. This is educational and not insurance, legal, tax, or financial advice. Rules and products vary and change — confirm the specifics with a licensed professional.
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