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.