Today there are several viable alternatives to traditional long term care insurance. One of these is the long term care insurance and life insurance combination plan. Unlike many traditional plans that provide use-it-or-lose-it benefits, the long term care/life combination plan provides the buyer benefit even if long term care is never needed. Either the policy holder will use some or all of their long term care benefit or a benefactor receives a tax-free death benefits. Some of these plans provide maximium liquidity; any time you want the money invested in the policy back, you can cash it in with no penalty at any time and for any reason. Your principle is 100% protected and liquid!
Since these new combination plans protect your principle and provide liquidity, they address the concern that many have regarding the potential that they may never need long term care. With a combination plan, there is no long term care insurance expense; the policyholder merely repositions existing assets.
Depending on the specific program, benefit payments from these policies can be administered either as monthly cash payments or as reimbursement for expenses paid. Once on claim the cash plan pays the monthly maximum benefit the beginning of each month as long as the policy holder supplies evidence that expenses have incurred. The reimbursement plan will pay actual (qualifying) expenses up to the policy’s maximum (generally set as a monthly amount).
Since long term care insurance and life insurance combination plans typically require a significant single premium deposit, these plans are only appropriate for individuals with significant liquid assets not required for income. Never the less, these new combination plans serve as an excellent solution for those who would rather not self-insure all of their long term care risk.
