How does hybrid long-term care insurance work? (2024)

Getting older is a reality of life. And aging will come with costs, both during your life and after you have died. Fortunately, there are ways to prepare for these costs in advance so that you can better live your golden years with peace and security.

There are multiple ways to prepare yourself and your family for these financial realities, though. In fact, there is one product that can help you get ready for both – hybrid long-term care insurance. This insurance policy combines the benefits of long-term care insurance – which is used to pay for services like nursing homes and in-home care – with a life insurance policy, which provides a payout to your family after you die.

Start shopping for long-term care insurance online now.

How does hybrid long-term care insurance work?

Hybrid long-term care insurance is a long-term care insurance policy that also includes a death benefit for your family after you die. It is important to understand how each element of the policy works so that you get the greatest benefit from a policy.

Long-term care insurance basics

Long-term care insurance works like any other insurance product – you pay premiums now in exchange for a payout later in life. Long-term care insurance is used to pay for health and personal care when you get older. The exact services covered by a long-term care insurance policy will vary based on the individual policy, but generally you can expect a plan to cover things like:

• Adult day care
• Hospice care
• Nursing homes
• Skilled nursing care at home
• Physical therapy

How much money you get from your policy will depend on the premiums you paid and the specifics of your policy. Start planning for your golden years now by looking for a long-term care insurance policy.

Life insurance basics

Again, life insurance works similarly to other insurance policies. However, in the case of life insurance, the payout doesn't actually go to the policy holder; instead, it is paid to a beneficiary you name when you buy the policy. That said, there are policies, like whole life insurance, which will let you cash a portion of the plan while still alive.

There are many different types of life insurance, and the type of policy you buy will determine when and how much money you and your beneficiaries ultimately receive.

Hybrid long-term care insurance basics

A hybrid long-term care insurance policy combines the benefits of the two products discussed above. The details of how your policy works will depend on how much you pay and the benefits offered by the insurance company you use, but generally speaking, you'll get long-term care services covered and any money you don't use will be converted into a death benefit for your family.

Some policies may also come with a guaranteed death benefit that you get no matter how much money you use to pay for long-term care. These products are especially useful as you can bank on some payout to your family and on having money for your needs later in life without having to purchase two separate insurance policies.

Essentially, a long-term care insurance policy helps you address two major aspects of financial planning – retirement planning and estate planning. It helps with retirement planning by setting you up to have money for services you need when you are no longer working. It helps with estate planning by giving your family an infusion of money right after you die that they can use as they see fit, whether to deal with funeral and estate costs or for some other purchase they want to make.

Shop for hybrid long-term care insurance online today.

The bottom line

Hybrid long-term care insurance combines the benefits of a life insurance policy with those of a long-term care insurance policy. You'll get money to pay for healthcare and other needs as you get older and your family will get a payout when you die to deal with the many costs associated with closing an estate and saying goodbye to loved ones.