Financial Services Blog

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A New Way of Thinking About Long-Term Care Insurance

What is wrong with this math?  Less than 10% of people in the U.S.  have long-term care insurance, yet roughly 70 percent of Americans over 65 will need some form of long-term care at some point in their lives, according to a study by the U.S. Department of Health and Human Services. Pretty unbalanced, isn’t it?

Many people don’t want to contemplate long-term care during their healthy years—part of the reason is confusion over what long-term care is and who can get it. Some of the common myths about long-term care insurance include:

  • I won’t need it
  • I’m not healthy, so the plans aren’t available to me
  • I can’t afford it
  • I already have life insurance
  • It’s “use it or lose it”

If you identify with any of these statements, you may want to take a fresh look at what long-term care really is, especially because the vast majority of Americans will need some sort of long-term care services as they age.

Many people don’t realize that long-term care can be linked with life insurance or annuity products.  Known as “linked benefit” products or hybrid long-term care insurance policies, these policies combine the benefits of an annuity or life insurance agreement with a long-term care rider.  What makes these options most attractive is that they provide flexibility and benefits that are, in many cases, more affordable than traditional long-term care insurance.

Hybrid policies work in several ways.  One policy links long-term care with life insurance. With this plan, the insured pays a set premium and depending on age, gender, health and the amount of the death benefit, a long-term care benefit is created.

This particular approach offers an attractive option to those who are concerned about the “use it or lose it” aspect to long-term care—in one way or another, the hybrid policy will be used.  Further, some annuities now offer tax qualified long-term care benefits.  These annuities enable you to invest the money you might have saved for long-term care into a product that provides a fixed income and also provides larger payouts if you need long-term care benefits. In some cases, like one we recently had with one of our clients, some products will double or triple the annuity payment when long-term care is needed.

It is to your advantage to do the math and review your current life insurance or annuity policy.  It might behoove you to exchange your policy for one that may do a lot more than what you originally intended it to do.

For more information or a quote, contact Skoda Minotti’s Financial Services.  Contact Deborah Marino at 440-605-7104 or

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