All Mom’s worry about caring for their parents as they age or their in-laws. In fact, many Mom’s bite the bullet and purchase long term care insurance for their aging parents. They do so because Mom’s worry about the cost and the loss of money. They often think that they will not need it and will have wasted their money. However, hybrid long term care policies protect you from losing your money if your policy is never used. This allows you to have the option to use the death benefit. You are able to cash out your policy to leave to loved ones.
What is Hybrid Long-Term Care Insurance?
Hybrid long term care insurance policies are built to protect you from financial loss, while still giving you the security a long-term care policy would.
There are a few drawbacks that you need to know. When you purchase a hybrid long term care policy, you don’t earn the interest like you would on a regular long-term care policy. You are required to pay a much large sum of money up front, rather than small premiums over time.
Depending on what kind of policy you are looking for, and your financial means, it’s good to know the facts about the different types of policies. Hybrid long term care insurance policies require you to put in a larger sum of money. One major difference is long-term care policies may increase in premium every year, but with a hybrid you generally have a locked in premium price. However, if you do decide to cash out your policy you could be looking at penalty fees. This could potentially result in cashing out less money than you put in to begin with.
Because people are living much longer than they have in the past, many are outliving their life insurance policies. This obviously causes major financial problems because you are unable to pay for the care you need for the remainder of your life. A benefit of the hybrid policy is that you potentially can purchase an “extension” or a “discount rider,” allowing you to keep receiving payments even after the base amount runs out.
Hybrid long term care insurance policies have become more popular because they give you both life insurance and long-term care. For a lot of people this is a more appealing option because they know that their family is covered, as are they.
There are, however, drawbacks of purchasing a Hybrid long term care insurance policies. One of those being, sometimes only a percentage of your long-term care is covered. For example, you could be limited to only 75% of your long-term care expenses being covered. So, for those who are not financially prepared to pay that remainder of the cost, could find themselves in a tight spot.
The main reason why many people still lean towards the tradition long-term care policies is because there are more options and they are more flexible.
However, there are still many people that aren’t aware of the differences and the benefits of each policy. When you are determining what type works best for you, it’s best to do research and figure out exactly what you need in a policy. Knowing all the facts is the first step to choosing which policy is right for your lifestyle. You want to make sure you have the coverage you need, for both you and your loved ones. Cost and benefits are another major factor in choosing your policy type. You want to make sure that you are given all of your options to find the best fit.