Contact us with questions about this topic.
Contact us with questions about this topic.

Are Hybrid Insurance Policies a Better Option than Long-term Care Insurance Policies for Meeting Nursing Home Costs?

Many people are aware of the high cost of nursing home care. Unfortunately, nursing home costs in Massachusetts rank as some of the highest in the nation and can exceed $12,000 a month. Some insure against these potential costs by purchasing long-term care insurance (LTCI). However, LTCI polices are not without their drawbacks. LTCI premiums can be high and there is generally no residual death benefit if the insurance is not used. Insuring against a risk that may never come to pass without any return on the investment does not sit well with some.

One alternative to purchasing a LTCI policy is to purchase a hybrid life insurance policy that provides long-term care benefits. While hybrid premiums can be five to fifteen percent higher than LTCI premiums, these policies provide a residual death benefit that regular LTCI policies do not. While the downside is if the hybrid policy holder does indeed require long-term care, the value of the death benefit is diminished by the payments made by the insurer toward nursing home care, for many the chance of providing a death benefit for surviving loved-ones is worth the price of the increased premiums. Hybrid policies also function as low-yield investments, which is another benefit they have over regular LTCI.

Of course, those that cannot afford long-term or hybrid policies or are too unhealthy to pass underwriting have other options and can employ trust and gifting strategies that render hard-earned assets uncountable by MassHealth. Contact the Law Office of Brandon L. Campbell for a complimentary telephone consultation to see if any of these strategies may be right for you.

How a Special Needs Trust is Set Up in Massachusetts

Many Massachusetts families take care of another family member with special needs. Caring for people with special needs can require additional resources from the caregiver, including a great deal of financial resources. If you efficiently plan ahead of time, you and your family can take advantage of financial programs that are made to assist in paying for these medical expenses. One way to financially protect your loved one with special needs is to get a special needs trust, also known as a supplemental needs trust, or SNT.

What is a Special Needs Trust?

The purpose of a special needs trust is to provide for the needs of someone without disrupting that person’s qualification for Medicaid, Social Security, and other federal benefits. The trust is created on behalf of a person who is physically or mentally disabled. Assets that are placed in the special needs trust are distributed to the beneficiary with the permission of a trustee. This kind of trust will not pay for basic needs, which are covered by other government benefits. Instead, the trustee will be in charge of payments for things like vacations, movies, social outings, extra quality-of-life items, medical treatments not covered by other programs, and hiring a lawyer. Special needs trusts can either be self-settled, meaning that the assets are preserved directly by the disabled person, or they can be third-party settled, which would mean the trust is funded by someone else. Self-settled special needs trusts include payback provisions, which require the trust to repay MassHealth for any benefits that were received upon the beneficiary’s death. Third party special needs trusts don’t include these payback provisions.

Special needs trusts are helpful additions to have along with the government benefits that are given to your loved one. The law office of Brandon L. Campbell has a special needs planning attorney who can help you and your loved one set up the trust that’s best for your family’s needs. Contact us today to get your plans started.