The passage of the Pension Protection Act of 2006 (PPA) opened the door for "hybrid" life insurance/long-term care insurance products.
Life insurance/Long-term care products offer the benefits of a life insurance policy:
- principal of which is an income tax-free death benefit
- plus an additional source of funds in the event long-term care is required.
In addition, because of the more rigorous underwriting performed in connection with the sale of life insurance, life insurance/long-term care policy owners are generally eligible to receive long-term care benefits immediately-subject, of course, to any elimination period-rather than after a lengthy waiting period.
Life insurance/Long-term care benefits are paid:
- first, as accelerated death benefits until the death benefits are completely accelerated; and
- second, under an extension of benefits rider that continues to pay long-term care benefits at the same maximum level for a selected period after death benefits have been completely accelerated.
Contact us today to explore your options to plan for long-term care utilizing a "hybrid" life insurance/long-term care strategy.