Life Insurance with a Long Term Care Rider

Long term care is a topic many individuals avoid until it’s too late.  During the past two months, I have had five individuals ask me what they can do to get care for an elderly parent.  You probably know someone in a similar situation.  They are learning elder care is expensive, $40K -$60K per year.  They realize these costs will consume all their parent’s assets. They are hoping there is some “program” to help them.  The answer is no and maybe. 

No, Medicare does not pay for long term care.  The most Medicare will cover is 100 days in a rehabilitation facility while you are receiving therapy.   There is a government program which covers long term care.  It is called Medicaid, and you must be virtually broke to qualify for it.  That is the maybe. 

Under Medicaid, you would have to exhaust all your assets to qualify for care. Then, find a long term care facility which is willing to accept a Medicaid patient.  This is not the path most individuals want to pursue.  It is especially difficult for married couples, where one individual needs care and the other needs to pay living expenses. 

Some look to purchasing long term care insurance.  This may be a good choice when you are younger, but can get very expensive in later years.  In some cases, individuals pay tens of thousands of dollars and never receive a benefit.   In addition, like most insurance, you must purchase it when you really do not need it.  You will not qualify for long term care insurance when you are ready to enter a facility. 

We have a solution. 

We understand a high premium is a deterrent to many people purchasing long term care insurance, especially if you forfeit the premiums if care is not needed.  Yet, I believe everyone reading this has insurance on their home, automobile and health.  I believe we pay for this insurance and hope we never use it.  However, if we ever get in an auto accident or our home burns down, we are very glad to have coverage. We possibly have a similar solution for long term care. 

Instead of forfeiting those premiums, a better solution is a life insurance policy with a long term care rider.  This policy is better known as a combination policy.

Here is how it works.  You purchase a life insurance policy where the death benefit can be converted to monthly payments to pay for long term care when you need it.  If you never need long term care, the policy will still pay out the death benefit to your family when you pass on.  Either way your premium payments will result in a substantial benefit since life insurance is very affordable.  This is an inexpensive way to get long term care if you need it.

Additional benefits to consider.  Many clients already have life insurance.  We can convert these policies to a new policy with the rider at no cost to you.  We also can set up a policy where you only make a single premium payment upfront for these policies, so you never should pay a premium again.  If you do make premium payments, they will never increase, and we can limit them to only a number of years.  We can tailor a policy to meet your needs. 

At Griffin Financial Advisors, we have worked with clients to cover this and other insurance needs.  As we’ve previously stated, we’ve been successful in providing lower costs for Medicare supplement insurance.  If you feel the cost of your supplemental plan is too high or want to further discuss this long term insurance policy, please do not hesitate to contact us. We have the knowledge and expertise to find a solution.

Lastly, as financial advisors, we feel obligated to contact you regarding all aspects of your financial well-being.  Of course, if there is a topic or need you wish to address, again do not hesitate to contact us.  We look forward to being of service.