“Consumers who are skeptical of traditional long-term-care insurance are snapping up ‘hybrid’ policies combining life insurance with long-term-care benefits. But are these products really a better way to manage the risk of catastrophic long-term-care costs? …
“The sales pitch is simple: By paying a single premium or series of set premiums, you avoid the risk of future premium increases—an issue that has plagued traditional long-term-care policies. And many consumers have balked at the ‘use it or lose it’ nature of traditional long-term-care policies; the hybrid’s potential death benefit removes that concern.
“But those advantages aren’t as clear-cut as they sound. For traditional long-term-care policies priced today, the risk of future premium increases is very low, according to new research by the Society of Actuaries. And by handing over a large lump sum for a hybrid product, you’re giving up the opportunity to earn a market rate of return on that money.”
LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):
Pros and cons for a complicated, but critical decision.
Hybrid Insurance Policies Gaining Steam