Is your private side investment comparable to a hybrid LTCI policy? Not necessarily. For most, a side investment has value that will hopefully appreciate over time or provide a return on investment. Hybrid LTCI policies can be seen in the same regard in that you can choose an inflation protection option that will grow your LTC benefits over time as well as a return of investment in the form of long term care benefits or a death benefit. The difference here is that by purchasing a hybrid long term care policy, you are protecting your financial portfolio. So in a sense, hybrid LTCI policies can be seen as a separate side investment put in place to protect your financial profile you have built over time. This allows you to retire comfortably without the worry of spending down your assets to pay for any long term care services that are not covered by health insurance.
One of the biggest advantages of a hybrid LTCI policy when compared to a traditional policy is the coupling of a Whole Life policy with LTC benefits. This is favorable to consumers due to the fact that a traditional policy is a “use it or lose it” style policy so it is seen as an expense rather than an investment such as a hybrid policy. With a traditional style policy, you are purchasing this product for the mere “just in case” factor which is not a bad purchase by any means and is still a good option for protecting your other assets and investments. However, with a hybrid policy, if that “just in case” never amounts to needing care, then your premiums paid in will leave behind yet another asset to your beneficiaries in the form of a death benefit that is paid out as untaxed income.
Having learned the statistic that around 70% of people aged 65 and older need some form of long term care, we are given the advantage to plan ahead and protect our assets so that we may enjoy our retirement. While many of us purchasing long term care insurance hope to never need it, we know that there is a higher than likely chance we will use it even if only a small portion. Keeping that in mind, if you are one of the lucky few who never need any form of long term care services, your premiums paid into a hybrid policy will not have gone to waste as they will be paid as a death benefit to your beneficiaries all while simultaneously protecting your other assets. We’d call this a win!
