14 Nov 2019
elderly man with caretaker

Learn about combination insurance policies.

While it’s a recommended policy, many people are hesitant to secure long-term care insurance.  This is because you can never be sure whether you will need this coverage or not.  Fortunately, there are new types of policies that take the uncertainty out of long-term care insurance.  Here’s what you need to know about combination policies.

  • What is a Combination Policy?

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 automatically 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.  However, if you never use your long-term care coverage, then it automatically converts into a death benefit.  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.

  • Should I Get a Combination Policy?

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 if 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 policies that combine long-term care and life insurance.  Do you have additional questions about your life insurance?  If so, then contact the experts at Patterson & Associates in Richardson, Texas.  Our dedicated team is eager to assist you with all your coverage needs today.