Long-Term Care Insurance Riders: Which Are Right for You?

​​According to the U.S. Department of Health and Human Services, long-term care will be a reality for many retirees. The agency estimates that 70 percent of today’s 65-year-olds will need long-term care at some point in their lives.1
 
Long-term care involves extended assistance with basic living activities such as dressing, bathing and eating. It’s usually provided either in the home or in a facility. As you might expect, it can be costly. No matter where the care is provided, it often costs thousands of dollars a month. Considering care is sometimes needed for years, it’s easy to see how it can drain one’s retirement assets.
 
Long-term care insurance can be an effective tool to minimize your out-of-pocket costs. You pay premiums today in exchange for protection in the future. Not all policies are the same, though. There are many different types, each of which has its own set of costs and benefits.
 
Many long-term care policies also offer optional benefits known as riders. You pay an extra fee to get additional coverage for a specific risk. Below are three of the most commonly used riders. Before you buy your policy, consider your needs and which riders may best help you meet your objectives.

Spousal Benefit
 
A spousal benefit can be a valuable option for married couples. Many policies have lifetime coverage caps that are usually expressed as either a benefit dollar amount or a maximum number of months of coverage.
 
The spousal benefit combines the maximums of each spouse into one pool. That way either spouse can use the benefit as needed. Some policies will even increase the maximum coverage to accommodate both people. This benefit can increase the cost of the policy, but it can also provide a valuable level of protection.

Return of Premium
 
One of the biggest concerns many people have about long-term care insurance is the risk that the policy will never be used. Of course, not using the policy means you didn’t need long-term care, so that’s not necessarily a bad thing. However, you may not feel great about paying premiums for years only to never put the policy to use.
 
Some policies offer return-of-premium riders. These riders vary by policy, but they essentially return a portion of your unused coverage to your beneficiaries upon your death. Some companies will package this benefit as a life insurance hybrid. These riders are especially appealing for those who want to leave a legacy. However, the rider can also significantly increase the cost of the policy.

Inflation Protection
 
Inflation is a natural part of the economy, but health care costs sometimes rise faster than other prices. It’s possible that long-term care costs could increase significantly after you buy your policy. By the time you need care, inflation could have eroded the value of your benefit.
 
Inflation protection riders increase your benefit each year to keep up with rising costs. The rider may increase your premium, but it may be worth the extra cost.
 
Ready to find the right long-term care plan for your needs? Let’s talk about it. Contact us today at Stoll and Basler Financial Services. We can help you develop the right strategy for your goals and your budget. Let’s connect soon and start the conversation.
 
1https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18090 – 2018/10/2
 
 

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