Combination policies; insurance that combines long-term care and life insurance benefits.

When it comes to long-term care insurance, many people are hesitant to invest.  This is because, if you do not end up needing long-term care services, your insurance goes to waste.  However, not having coverage means that you will have to pay out-of-pocket if you do need long-term care.  To offer policyholders a form of insurance with guaranteed benefits, the combination policy was introduced.  Here's what you need to know about this type of insurance.

• Combination Policies

Insurance policies that offer coverage for long-term care and life insurance are known as combination policies.  These policies cover the long-term care expenses that regular health insurance or Medicare will not.  If you do not end up needing your long-term care coverage, then the insurance company will convert the money into a death benefit payable to your beneficiaries.

• How Do Combination Policies Work?

Depending on the specifics of your policy, you will pay a lump-sum premium or several large annual premiums (usually over the course of ten years or less).  Your policy will set aside a pot of money that you can use to pay for long-term care expenses.  Typically, this amount is equivalent to several times your premiums.  If you access your long-term care insurance, then your death benefit is reduced.  Some policies will guarantee a percentage of the full death benefit (usually around 10%), even if you use all the money allocated for long-term care.

• How Do I Get a Combination Policy?

Every combination policy is different and therefore has different application requirements.  Some insurers will require you to submit your medical records and take a medical exam to qualify for coverage.  Other insurers offer simplified underwriting, which means that the application process is far less strict.  Please note that insurance companies that offer simplified underwriting may place limits on your coverage or charge more for coverage.  The average cost of a single-premium combination policy is about $75,000. This is what you need to know about combination policies.  Are you interested in learning more about long-term care or life insurance?  If so, then contact the experts at East End Insurance Agency.  Our dedicated team is eager to assist you with all your coverage needs today.