Hybrid Long-Term Care Policies
How do Hybrid Long-Term Care Policies work?
Live, die or quit, an insurance policy that is guaranteed to pay off! Who knew!!!
Hybrid policies, also known as linked benefits, have two primary elements: a life insurance contract and Continuation of Benefits rider (COB).
If a policy holder never needs long term care, the contract pays just like traditional life insurance.
When the same policy holder needs long term care, the value of the life insurance is ‘spent down’ to cover the cost of care then the COB continues to pay for care in the home, assisted living or senior care facility (aka, nursing home).
If long-term care or life insurance protection are not needed some time in the future, the insurance company pays out a cash surrender benefit. Depending on the insurance contract and the length of time it’s been in force, the surrender value may be equal to or more than the premium paid.