As standalone long-term care insurance becomes more expensive, more of our clients are turning to hybrid life insurance policies, which combine life insurance and long-term care coverage.
These hybrid policies, which are actually permanent life insurance policies with a long-term care rider, typically appeal to clients who need both types of coverage and want to avoid paying separately for both a long-term care policy and a life insurance policy.
In a simple hybrid scenario, a policyholder would withdraw funds from their life policy when they are needed for long-term care and the insurance company pays for care when those funds run out. And if the policyholder dies without having the need for long-term care, their beneficiary receives the full death benefit.
If you're interested in a hybrid life insurance policy, you typically need to make that decision when you first purchase your life insurance. It usually isn't possible to add a long-term care rider at a later date in time.