Long-Term Care Insurance and Three Ways of Buying It!

Kimberly Watson, Editor in Chief
April 12, 2012 /

An important decision when buying long-term care insurance, is determining which the right option for you is!  Each one will have particular benefits that suit your needs, but you are the one who must consider what the priorities in your life are.

The three titles by which the types of log-term insurance are generally identified are; a stand-alone long-term care; a fixed annuity with LTC benefits and a life insurance policy with an LTC rider.

In the present economic climate, affordability is a major issue in the lives of an average family. Should you elect to invest in a policy, it is a critical that you do not encounter a position whereby you are unable to afford it. This would mean a total waste of your money. Therefore, many assured persons prefer the simple form of life insurance, but with the added long-term care.

Competition for this type of policy is provided by hybrid life and annuity products. There are people who view the traditional LTC as a waste of money if they do not make use of it. This is a total misconception, but it provides ammunition for the competitors. If LTC policies are viewed in the same context as home or automobile insurance, it is more affordable due to the lesser premiums you are paying. This implies that you are retaining more money for investment in your retirement.

If you are seeking long-term care protection, then when you make a financial comparison, a well designed LTC policy is excellent value for your money. It is preferable for any one to invest in a smaller policy that they can afford and meets their basic needs.

The annuity aspect has various advantages, with you retaining access to the money you pay, although there are applicable fees involved.  The cost of added LTC may prove less than an LTC policy, with the advantage that you can get coverage without underwriting for health, if your application for a stand-alone policy was rejected

A disadvantage to this type of policy is that besides the relatively high initial investment, the rider fee can affect the interest income, generated by your annuity.


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