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Q: Should I Consider A Combined Life And Long Term Care Plan?

2015 May 27
by zanderins

AThe combination of a life and long term care insurance plan is sometimes referred to as a hybrid policy.  These are based on buying a cash value life insurance plan and a rider that allows the cash value of the policy to be used for Long Term Care expenses.  Conceptually, and from a sales perspective, these hybrid plans seem to make sense. Looking more closely, however, there are serious flaws. First and foremost: the life insurance plan that these additional coverages are coupled with are cash value type policies such as Whole or Universal Life.  Dave is adamantly against these types of plans and coupling them with a Long Term Care Insurance benefit does not increase their appeal.  In most cases the added benefits are inferior to plans you can purchase independently and not worth the risk.  Many of the LTC benefits in a hybrid plan are limited to either the amount of benefit paid, the types of services covered, or the length of benefit period.

Dave Ramsey recommends life insurance while you have debt that your estate cannot pay if you were to die prematurely, and/or you have dependents who rely on your income for their financial lifestyle.  As you attack debt and grow savings, you start to reduce and eventually eliminate the need for life insurance while increasing the need for long-term care coverage.  Long-Term Care allows you to protect the financial lifestyle of both spouses into the future; incurring an expense for life insurance when it’s no longer needed so you can keep your long-term care protection makes no sense.

Please visit our website to get more information on Long Term Care insurance and to request a quote.