Long-Term Care Insurance was first offered in the United States in the 1970s but became most prevalent during the late 1990s. Long-Term Care Insurance policies of that era often provided rich benefits with, for example, no limits on payments during the insured’s lifetime. Long-Term Care Insurance provides daily or monthly assistance with the costs of a broad range of long-term care services. Long-Term Care Insurance policies can be traditional or hybrid, though traditional policies are becoming increasingly rare.
Traditional polices cover some or all your costs if you need long-term care. Traditional policies have premiums that may increase over time If the benefit is not used, it is lost, unless the policy’s benefits can be transferred to a surviving spouse.
Hybrid policies serve the same purpose as a traditional policy, but they also have a built-in-death benefit (life insurance benefit) for your heirs. Hybrid policies, using the long-term care coverage will either reduce or eliminate the death benefit. A hybrid is designed to provide some form of benefit no matter what, whereas a traditional policy only benefits you if you become ill enough to require long-term care.
Life Insurance Policy with a LTCI Rider. This type of insurance policy is designed to provide a death benefit, also includes a rider that provides coverage for LTC costs. If the insured is certified as needing long-term care, the policy allows access to the death benefit to pay for long-term care costs.