Updated: May 6, 2019
When we get older, we began to consider long-term care. Compared to a life insurance policy, long- term care insurance could provide enough funding to help cover medical expenses while you are still alive. While some may believe is contrary to life insurance, newer polices are providing living benefits that could bring the same benefits as a long-term care policy while providing higher return on your investment.
Long- Term Care Insurance:
As the name describes, this type of insurance could provide enough funding for assisted living. This type of policy covers individuals with a critical illness that makes them unable to manage their daily task. It provides an inflation rider option where a $300,000 policy could increase to a $500,000 at at 3% inflation in 20 years. While it may sound favorable, this type of insurance will become more expensive in the long run. One of the downsides, is that the policy could be lost complete if its not use. Moreover, the prices are not guarantee and could increase gradually over time. The policy only provides its funding for a maximum of 5 years, living you expose to any further expenses afterwards. If the policy is not use, all the long-term insurance benefits will be lost living with nothing. While obtaining this policy is better than nothing, we still recommend life insurance as a based of protection.
Life Insurance - Living Benefits:
All our consumers believe that life insurance only provides the funding in case of a death. While this may be true, newer policy have the ability to access the funds beforehand. Identical to long-term policy, the ability to access the funding in a life insurance policy could only come from a critical illness that makes you unable to meet 2 out 6 daily living activities. Life insurance provides funding after your death, long-term care provides nothing. Life insurance provides living benefits if needed similarly to long-term care. If the policy holder obtains a whole life insurance, their premium will stay the same for a lifetime. Whole life insurances provide cash value benefits that saves money on your investment for retirement. Compared to a 401K, life insurance cash value is fully accessible and can be withdrawn when needed. Life insurance provides the same benefits as a long-term care insurance, while still protecting your family in an event of your death.
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