President, Lane Independent Agency, Southern California
Such an excellent question! Yes, but do it in a very new and special way. There is now a Life Insurance you can buy which comes with living benefits, but not just the ability to get some money from it, but true living benefits to cover your needs in life. The benefits include chronic care, chronic illness, terminal illness, retirement, and other major needs. This type of policy is only available through a limited agent pool, those working with Premier Financial Alliance. They provide a product through National Life Group, 167 years in Vermont. The company limits its sales of this full product exclusively through Premier Financial. I urge you to call your PFA agent for find out the details. You can save a great deal of money by combining your policies and coverage, while get the coverage you really need. Thank you. GARY LANE. PFA agent, 714 422 9616.
That is a great question! The latest statistics I saw showed that roughly 70% of us will need long term care at some point, so it definitely makes sense to prepare for it. How to do that will depend a lot upon how your retirement planning has been, or is being, done. There are some insurance policies that will combine the two policies, and there are several annuity products that will double or triple your payout, should you need the care. There are some companies that will write stand alone LTC policies. Which is the best choice for you? That will depend upon a lot of things. Can you afford another policy? LTC policies are being restructured, and have gotten much more expensive, as time has passed and insurance companies have found them to be much less profitable than originally thought. Congress passed a law that went into effect in 2010 that allows any funds pulled from a retirement vehicle that are earmarked for long term care to be free from income tax requirements, so if you have annuities or retirement funds that can be set aside for this purpose, and still have funds to live on, then maybe not. I'd advise you to speak with someone that you can trust to look at where you are now financially, and where your retirement plan is, before recommending purchasing a policy of any kind. And be sure that you read the fine print, okay? Many policies allow the early payment of benefits for LTC, but there are often fees, penalties, and tax consequences that can really make it a questionable if not down right bad, thing to do. Thanks for asking!
By the wording of your question, I believe you are referring to Life Insurance with living benefits. This type of policy will allow you to take some of the death benefit as cash if you are diagnosed with a chronic condition that will render you unable to do two or more ADL's for the foreseeable future.
Your other option would be to buy two policies: Long Term Care Insurance as one policy, and Life Insurance as the other.
There are many questions to walk through with a financial counselor to determine which is correct for you, as Jim so wonderfully explained. Life Insurance with living benefits or a Long Term Care type rider can be an affordable way to purchase some LTC coverage along with your Life Insurance. On the other hand, there are advantages to having separate policies, as well. A financial counselor can explore all the variables to help you get the product(s) that best suit your situation.
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Your other option would be to buy two policies: Long Term Care Insurance as one policy, and Life Insurance as the other.
There are many questions to walk through with a financial counselor to determine which is correct for you, as Jim so wonderfully explained. Life Insurance with living benefits or a Long Term Care type rider can be an affordable way to purchase some LTC coverage along with your Life Insurance. On the other hand, there are advantages to having separate policies, as well. A financial counselor can explore all the variables to help you get the product(s) that best suit your situation.