A Possible Solution: A new generation of long-term care insurance that combines an annuity with long-term care insurance benefits. These are called hybrid long-term care policies and are also know as asset-based plans. They are usually funded with a single premium but some companies offer other payment options.
For many people the major advantage of hybrid policies is that they are not a “use it or lose it” product. Like any other tax-deferred annuity, hybrid products earn interest and even though there are surrender charges in the early years, a substantial portion of the premium may be available for withdrawal. And if the insured does not use the long-term care benefits or withdraw the premium, it will go to his or her designated beneficiaries.
The Bottom Line: With a hybrid policy if you need long-term care benefits, you have them. If you don’t use the long-term care benefits you have access to the cash surrender value of the contract. If you don’t use the long-term care benefits or withdraw all of the cash value, your beneficiaries will receive a death benefit.
Hybrid products may not be a perfect replacement for traditional long-term care insurance but they are an option that many people should consider. As with most insurance, you have to qualify so don’t wait until it’s too late.
Posted by C. Thomas Thames