Share

Gainesville Florida Estate Planning & Elder Law Blog

Monday, April 28, 2014

Hybrid Long-Term Care Policies May Be the Answer

New hybrid long-term care policies may be the answer for people wrestling with the issues related to traditional policies for these services.

Among the most significant and attractive features of the new policies is their greater affordability. In fact, it may be possible for you to convert an already existing annuity or life insurance policy to a new policy with a long-term care rider without any additional expense.

Long-term care has become a critical need, and it has staggering costs. According to the 2014 Genworth Cost of Care survey, the median annual cost for a private room in a nursing home in Florida is now $91,615.00, and a semi-private room is not much better at $83,950.00. Long-term care insurance may be the best answer if you don’t want to wipe out all your savings.

The other option is to simply assume you won’t need long-term care. But the odds are against you. The U.S. Department of Health and Human Services has determined that someone turning 65 today has an almost 70% chance of needing some type of long-term care services and supports in their remaining years. Women need care longer (3.7 years) than men (2.3 years). One-third of today's 65-year-olds may never need long-term-care support, but one fifth will need it for longer than five years.

With traditional long-term-care policies you pay an annual premium, either in a lump sum or in installments, and you continue to pay the premiums to keep the policy in force until you either file a claim (assuming you have a waiver of premium clause in the policy), or until you pass away. If you fail to pay premiums, the policy is forfeited. There are no refunds. You receive no benefit from the premiums you already paid. The insurance company can raise premiums at any time by seeking approval from the State Insurance Commissioner.

The new hybrid policies fall into two types: annuity-type policies and life insurance policies with a long-term-care rider.

All the annuity-type policies and most of the life insurance-type policies call for a single lump-sum payment when you take it out. You do not have to pay anything beyond that. The premium and benefits are fixed and can never be altered by the insurance company. If you never file a claim, depending on the policy, you may be entitled to a return of most of the premium on an annuity-type policy, or a death benefit greater than the premium on a life insurance-type policy. If you wish to cancel a policy of either type, you may be entitled to a substantial return.

Also, if you have an existing life insurance policy or annuity, you may be able to exchange it for a hybrid policy tax-free, without having to pay anything for an additional benefit. You will have to pass a physical exam. The life insurance policy may offer a lower death benefit than the existing policy, but a substantial long-term care benefit.


Archived Posts

2019
2018
December
November
October
September
August
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013



The Law Office of Sam W. Boone, Jr. assists in Gainesville, Florida and the surrounding counties.

*The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.*

* I have read and accept the disclaimer **


The hiring of an attorney is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience. Additionally, the comments, statements and articles contained herein are general in nature and should not be relied upon as a basis for any legal opinion, action or conclusion on the part of the reader with respect to any particular set of facts or circumstances.

© Sam W. Boone, Jr., P.A. | Disclaimer | Law Firm Website Design by Zola Creative



© 2019 Sam W. Boone, Jr., P.A. | Disclaimer
4545 NW 8th Avenue, Suite A, Gainesville, FL 32605
| Phone: 352-374-8308

Estate Planning | Advanced Estate Planning | Elder Law | Special Needs Planning | Probate / Estate Administration | Asset Protection | Guardianships | Pet Trusts | Planificación de Bienes | Planificación Avanzada de Propiedad | Reviews | About Us | Resources

Attorney Web Design by
Amicus Creative