Hybrid policies coupling life insurance with long-term care could be advantageous

Oct 07, 2011

Hybrid life insurance could be a good solution.

A long-term care and life insurance hybrid policy could be another choice for those looking at their insurance options, according to author Gail Liberman on The Palm Beach Daily News' website.

Liberman said there are many different options that can be selected, including a long-term care rider on cash value life insurance, which gives a long-term care plan that pays benefits for a specific term with the unused money going to a beneficiary after death.

Another option is the tax-deferred fixed annuity, which sees a lump sum invested with a life insurance company. A certain amount of the cash value can be tapped for long-term benefits, the news source said. If those benefits are not used, funds can either be withdrawn or obtained in periodic income for life.

"Benefits on either of these are likely not as comprehensive as straight long-term care insurance," Liberman said on the website. "However, experts say the long-term care benefits are apt to be more comprehensive on hybrid life insurance policies than on hybrid annuities."

According to the Insurance Information Institute, the average amount of individual life insurance a person carries has decreased by $12,000 in 2010, compared with a $6,000 decline in group coverage. Even so, premiums for life insurance saw a large decline, from an average of $142.80 in 2008 to $101.70 in 2010. 

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