A new option for long-term care coverage is hybrid policies that include life insurance or a fixed annuity.
These provide more options than separate policies and can be used for purposes other than long-term care and can have beneficiaries.
Insurance industry research group Limra estimates sales of hybrid policies have more than doubled since 2008 to more than $2.4 billion last year, according to The New York Times. Stand-alone policies sold annually only reach $300 million and only 16 insurers currently sell them compared to almost 100 in 2006 because of higher costs.
Dive Insight
Hybrid policies keep a specific amount of cash within the policy and many have "surrender periods" when the money is frozen for a number of years. If money is withdrawn during this time, a penalty is issued. Also, these policies can be complicated and coverage can be denied - a big difference from regular health insurance.
Some considerations to take into account when deciding on a hybrid policy include whether: A monthly income is needed (chose an annuity); a spouse needs coverage; a death benefit for survivors is needed; and what is the wait to access money in the policy?
Riders in plans that offer features like accelerated benefits or chronic condition coverage tend to cost more than stand-alone life policies or annuities. The article concluded it's best to save money by working with a fee-only financial planner for objective advice.
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