How Hybrid Long-Term Care Insurance Can Help Protect Your Assets 

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It’s no secret that the cost of long-term care services can be incredibly expensive. In fact, according to a report from Business Insider, the median price of a private room in a nursing home is now over $27,000 per year. While there are many ways to finance long-term care services–including traditional long-term care insurance policies and government programs like Medicaid–hybrid long-term care insurance (Hybrid LTCI) is an increasingly popular option. Read on to learn how Hybrid LTCI can help protect your assets. If you have any questions afterward, please contact our team at Good Life Mt. Pleasant to schedule a complimentary consultation.

What Is Hybrid Long-Term Care Insurance?

Hybrid long-term care insurance is a policy that combines features of traditional long-term care insurance and life insurance. With a hybrid policy, you pay premiums into a policy that will eventually provide benefits for long-term care services should you need them. If you never need to use the benefits, your heirs will receive a death benefit.

In other words, Hybrid LTCI provides a way to protect yourself (and your assets) from the high costs of long-term care while also providing peace of mind in knowing that your precious ones will be covered financially if something happens to you.

How Hybrid Long-Term Care Can Help Protect Your Assets

One of the biggest reasons to consider Hybrid LTCI is that it can help protect your assets from being depleted by the high costs of long-term care. Here’s how:

1.    It Can Help You Qualify for Medicaid

If you’re unfamiliar, Medicaid is a government program providing financial assistance for medical expenses. To qualify for Medicaid, you must have assets below a certain level. If you have a Hybrid LTCI policy in place, the policy can be used to help pay for long-term care services, which can help you preserve your other assets and qualify for Medicaid.

2.    It Can Help You Avoid Spending Down

To qualify for Medicaid, you may also be required to “spend down” your assets until you reach the $2,000 limit. This means using your fortune to pay for long-term care services until you are eligible for Medicaid. However, if you have a Hybrid LTCI policy, you can use your policy benefits to pay for long-term care services instead of spending down your assets. This can help you protect your assets and ensure they will be there for your loved ones after you leave.

3.    It Can Help You Reduce or Eliminate Estate Taxes

Another way Hybrid LTCI can help protect your assets is by reducing or eliminating estate taxes. This is because your life insurance death benefit will not be subject to estate taxes. If you have a large life insurance policy as part of your Hybrid LTCI, your heirs could potentially avoid a significant amount in taxes.

4.    It Can Help You Leave a Legacy

Hybrid long-term care insurance can help you leave a legacy for your loved ones. If you never need to use the policy benefits for long-term care services, the death remuneration will be paid out to your beneficiaries. This money can be used for anything they want, whether it’s to help with living expenses, pay off debt, or enjoy life. And because the death benefit is paid out tax-free, your loved ones will be able to keep more of the cash you leave them.

5.    It Can Help You Stop Feeling Like a Burden to Your Family

Finally, hybrid long-term care insurance can help put your mind at ease by knowing that you’re prepared for the future and won’t be a burden to your family if you need long-term care. This peace is priceless and can enable you to enjoy your retirement years worry-free.

How to Choose the Best Hybrid Long-Term Care Policy for You

Now that you know how hybrid long-term care insurance can help protect your assets, you may wonder how to choose the best policy. Here are a few tips:

  • Work with an experienced financial advisor and/or insurance agent
  • Ensure the policy covers both home and nursing home care
  • Pick a policy with a benefit period that meets your needs
  • Ensure the policy has an inflation rider
  • Get quotes from several carriers 
  • Read the fine print and ensure you comprehend it

By following these tips, you can make sure you’re choosing the best Hybrid LTCI for your needs and budget.

Explore Your Options Today

Hybrid long-term care insurance is an increasingly popular way to pay for long-term care services. At Good Life Mt. Pleasant, we know that figuring out which policy is right for you can be confusing and overwhelming, and that’s why we’re here to help. If you have any other questions about choosing the policy that is right for you, contact us today to schedule a free one-on-one consultation. We can’t wait to help you plan for the future!

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.