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Hybrid insurance options to cover long-term care needs

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Virtually no financial adviser will tell you it's a bad idea to save for retirement, and everyone wants to be able to enjoy his or her golden years. One thing that can derail those years, making them financially difficult for you and for your loved ones, is an illness or injury that lands you in a long-term care facility. To avoid debilitating debt that can come when traditional medical insurance fails to cover long-term care situations, many people invest in long-term care insurance.

Traditionally, the way this insurance works involves an individual paying a premium each month. If a long-term care situation arises, the insurance policy provides a predetermined monthly benefit amount to the individual -- an amount meant to help defray or cover the costs of the care.

One issue with this type of insurance is that many people see it as a gamble. Will they pay the premium for the rest of their lives without ever using the policy? Is it, then, a waste of money? An option that helps alleviate this concern is a hybrid insurance policy that combines some benefits of long-term care insurance with those of life insurance.

A hybrid policy builds some cash value over time, like a whole life insurance policy would. That way, if a person passes away without using the long-term care benefits, his or her heirs receive a cash benefit from the policy as they would from a life insurance policy. This helps individuals paying for the policy avoid the mindset that they are throwing money away.

Understanding your long-term care insurance needs is important. Equally important is the ability to file a claim and have it paid when needed. If you are dealing with denial of your long-term disability claim, consider seeking assistance from a lawyer.

Source: The Christian Science Monitor, "When hybrid long-term care insurance makes sense," Damon Gonzalez, June 23, 2016

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