Should I buy a linked-benefit long-term care insurance plan?
It can be expensive to age in America – especially if you end up needing long-term care in a nursing home or via an in-home health care worker. One year in a private nursing home room, for example, costs, on average, about $108,405 nationwide.
The simple fact is that most people won't be able to afford that type of cost out of pocket. But if you're worried about being able to pay for long-term care when you get older, there is something you can do right now to prepare: purchase long-term care insurance.
There are many types of long-term care insurance to choose from. One that you might consider, especially if you have a family, is linked-benefit long-term care insurance, which couples coverage for long-term care with a traditional death benefit like a life insurance policy offers.
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Should I buy a linked-benefit long-term care insurance plan?
There are numerous reasons why getting a linked-benefit long-term care insurance plan — also known as a hybrid long-term care insurance plan — makes sense. Here are some of the reasons you might consider getting this type of policy:
It can help your family
Getting older isn't the only expensive thing in America. Dying is also expensive, from the funeral costs to dealing with probate. And, a linked-benefit plan could give your family the money they need to handle all those costs.
"Linked-benefit plans combine long-term care insurance with life insurance, providing broader coverage and greater flexibility, usually at a slightly higher price point since you are insuring multiple risks," says Jeff Beligotti, a vice president and head of long-term care solutions at New York Life. "But this type of policy also ensures you can leave a legacy for your loved ones, as they include a death benefit."
Some linked-benefit plans provide a death benefit no matter what; others give your family what is left from your pool of long-term care funds, meaning that if you utilize this type of coverage, there is a chance there won't be any death benefits left for them. Speaking with your insurance agent can help you determine which plan is right for you.
Find a long-term care insurance policy that works for you.
Many types of long-term care are covered
As with any other long-term care insurance product, there are many services you can pay for with a linked-benefit plan. If you need full-time care in a nursing home, you'll be able to pay for that. If, on the other hand, you can stay independent but want to be in a community where help is available, you can pay for assisted living. You can also your benefits to pay for in-home care, hospice care and occupational therapists.
Some plans even let you pay your family members if they take the time to care for you. Again, make sure you talk with an insurance agent or another advisor to get the plan that will best work for you.
Streamline your insurance
Long-term care insurance is important. Life insurance is also important, especially if you have a family you want to ensure is taken care of. While you could certainly buy two separate policies, buying a linked-benefit plan will let you combine the two policies into one, making your life significantly easier.
This type of plan also means that you aren't paying unnecessary insurance premiums if you don't end up needing long-term care.
"Linked-benefit long-term care plans are more versatile because they give you long-term care coverage if you need it, life insurance if you don't, or a combination of both," says Beligotti. "You pay for a defined period, and it offers a money-back guarantee."
The bottom line
A linked-benefit long-term care insurance plan provides money for long-term care and a death benefit for your family after you pass. This type of plan could be a great option if you want to leave some money for your family to help offset the cost of your death while also offering coverage for long-term care. Each policy is different, so just make sure you know the details of what you purchase,
