Life insurance and long-term care insurance are two important tools in financial planning. Life insurance is designed to provide financial support for loved ones after a policyholder’s death, while long-term care insurance helps pay for extended medical or personal care as individuals age. Some policies now combine these protections into one.
Universal life insurance policies with a long-term care rider allow the death benefit to be used for nursing home care, assisted living, or home health services if needed during the policyholder’s lifetime. This type of policy is available to members of the Colorado Medical Society who are practicing full time, with coverage amounts starting at $25,000. Monthly premiums depend on age and selected coverage amount.
Transamerica offers a Universal Life Insurance policy with a Long Term Care Rider that includes several features. According to Transamerica, “Transamerica Universal Life with Long Term Care Rider is a two-in-one benefit that offers simplified issue life insurance for family needs plus long-term care benefits. With the Restoration Rider, the life insurance benefit pays out even if you use the long-term care benefit.”
The company also states: “The death benefit can help protect your loved ones financially after you pass away. During your lifetime, it also responds to a long-term care need—one of the most expensive health-related events we face that is not covered by health insurance. Planning for long term care can be one of the most important decisions you can make, and it’s a gift for your family, too.”
Some key features include no required medical exams or blood work to qualify, guaranteed death benefit protection, cash value accumulation accessible during the policyholder’s lifetime, and premium waivers in case of layoff or strike. Payroll deduction payment options are also available.
Universal life insurance differs from traditional term life policies by combining permanent protection with an account that builds cash value over time and allows flexible premium payments.
A notable feature is the Long Term Care (LTC) Rider. The LTC Rider provides monthly benefits equal to 4 percent of the death benefit for nursing facility or assisted living care and 2 percent for home health or adult day care services. For example, someone with a $100,000 death benefit could receive up to $4,000 per month for nursing home expenses or $2,000 per month for home health services.
An Accelerated Death Benefit for Terminal Condition Rider is included at no extra cost; this allows access to up to $150,000 or 75 percent of the death benefit if diagnosed with a terminal illness.
If all long-term care benefits are used up, an Extension of Benefits Rider continues coverage while preserving part of the death benefit for beneficiaries.
Policyholders have flexibility to adjust their coverage levels and premium payments as their needs change over time.
Enrollment is currently open. More information about this offering can be found at https://enroll.buddyins.com/cms.
