Use an Annuity to Buy Long-Term Care Coverage

Long-term care insurance may be an important (even necessary) part of your financial plan. But you may be reluctant to buy a policy whose premiums can rise. Plus, if you never require long-term care, the money that you had spent on premiums simply vanishes. Still, you may want the financial security that long-term care insurance provides. There is another way to get long-term care coverage – by combining it with a life insurance or deferred annuity policy. These combination policies could make long-term care insurance more financially attractive. Here’s a brief summary about how they work. Long-term care insurance is added as a rider or as an additional benefit to a life insurance policy or deferred annuity contract. Premiums for many of the life/long-term care insurance combo policies are usually paid up front.  While this can be a significant outlay of funds at the start of the policy, the one-time premium payment for both life and long-term care insurance does provide protection from rising long-term care insurance premiums down the road. In contrast to the life/long-term care policy, the long-term care coverage on a deferred annuity will typically be based upon a percentage of the annuity assets (based, among other [...]

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