3 Things To Know About Hybrid Long-Term Care Policies
As you plan for your retirement, you need to also make sure that you are planning on your long-term care. There is a good chance that as you age, you may need long-term care. Long-term care is when you need medical or other assistance in order to take care of your health and daily life functions. Many people develop the need for long-term care due to either cognitive or physical impairments that come-up. Generally, if you need care for more than a few months at a time, that is considered long-term care.
How To Pay For Long-Term Care
However, long-term care can be expensive if you don't save and plan for it. Although your medical insurance may cover some long-term care costs, generally a lot of left for you to take care of yourself. One of the best ways to ensure that you will have the money you need to pay for long-term care is by purchasing a long-term care policy. The two primary types of long-term care policies are traditional polices and hybrid polices. Here are a few things that you need to know about how hybrid polices differ from traditional polices.
The Cost Is Set
With a hybrid policy, the cost is set. You are going to pay a set premium every year for a set amount of years. For example, you will pay a premium of $8,000 for ten years. After the ten years have passed, your policy will be fully paid off, and you will be able to use it for the duration of your life. The price for the police will not increase over time, and you can rest assured that it is paid off and you'll have access to it when you need it.
In contrast, with a traditional long-term care policy, you will have to pay a premium every year for as long as you want to be covered by the long-term care policy. You may also face increased rates over time. For example, you may have to pay $2,000 dollar premium per year for coverage for the rest of your life. If you fail to pay the premium one year, you'll lose the coverage that you paid for.
You Can Get A Refund While Alive
With a hybrid policy you can get a refund if you don't use the benefits. Most hybrid polices are set-up so that you can get a significant part of the premium back if you decide to cancel the policy after it is paid in full when you are still alive. This makes your hybrid long-term care policy also a great savings tool; it can give you direct access to cash if you ever need it.
Your Heirs Can Get A Refund
If you don't use your long-term care policy and you die, your heirs can still get back some of the money that you invested in the policy. Your heirs could potentially get back as much money as you invested into your long-term care policy when you pass away. This provides another way of saving money to take care of yourself and your family at the same time.
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