Using Life Insurance to Pay for Long-Term Care

Opinions differ on whether an Acceleration Rider on a life insurance policy is an adequate substitute for a separate LTCI policy or not. The answer depends, in part, on the size of a life insurance policy, the money received while the policy is in-force to pay long-term care costs, and how much long-term care is expected to cost at the time it's needed.

66% of Americans surveyed say long-term
care planning is important, but only 20%
have discussed the topic with an advisor 

If you do the math, you'll discover that an LTC Rider on a life insurance policy won't cover all of  the possible long-term care expenses. In fact, it may give a false sense of security that all needs would be met. And keep in mind that long-term care benefits received will reduce a policy's death benefit, possibly leaving little or nothing for beneficiaries.

However, the premiums on a stand-alone LTCI policy can be very costly, depending on current age, health, and the benefits offered. If these costs make such a policy too expensive, an LTC Rider on a life insurance policy may be a reasonable middle-ground solution. An LTC Rider can allow for tapping into the funds in the future, should the need for long-term care arise. 

For help in assessing your clients' personal situation, consider these Agent Resources.