Last week, one of my clients was concerned that if he didn’t need long term care, he would lose all the premiums he spent. So we added a very interesting rider known as Return of Premium Rider (ROP). An ROP rider gives back all the premiums spent (minus any claims) if the client dies before using any or all of their benefits. I love this rider and use it quite often. It is not expensive and protects the premium dollars spent over the years prior to needing the care. It is particularly appealing for clients who truly believe they will never need long term care.
Another kind of long term care policy for those who are concerned about not using their policy benefits, is a Linked Life and Long Term Care policy. These policies are a combination of both Life Insurance and Long Term Care insurance. If the client needs long term care then that pays, if the client dies then the life insurance pays out the death benefit.
Here are Some Reasons to Consider a Linked Benefit Policy:
- A single premium Linked Benefits policy allows for a single payment which may use “lazy money” kept in savings, certificates of deposit, or money market funds.
- The client may have the availability of using a “1035 exchange” from an older, no-longer-useful life insurance policy. The old policy simply rolls over to a new Linked policy that will provide either a death benefit or long term care funds.
- Some single premium Linked policies offer the option of funding over 3, 5, 7 or 10 years.
- Many Linked policies pay their long term care benefits out in cash (not reimbursement). This gives clients flexibility to use funds as they wish.
- For clients concerned about the possibility of rate increases on their traditional LTC insurance policy, a Linked Benefit policy provides more guarantees against future increases.
Be sure to talk about your options with an experienced broker. One who is an expert in all the types of LTC insurance options available.