Tuesday, July 08, 2008

LTC rider on single premium life insurance policy might be a good way to plan for possible long term care needs


Merrill Lynch today posted a detailed story on how long term care, pensions and life insurance can come into play together.

The story cites a case of a man who left a widow and two sons. It seems that the man’s pension perhaps did not have the proper 5 years certain payments for surviving spouse (which is usually the standard), or it expired. In any case, the widow needed long term care, at a time when the economy was faltering. Instead of inheritance, the sons could have wound up paying for her care and being drained themselves. (The story is specific about this.) I worked for a life insurance company in information technology for twelve years (and through two mergers) but I don’t recall LTC riders, but LTC insurance was starting be offered around 1999.

The article mentioned a new product available at age 65: a single premium life insurance policy with a long-term care rider. For $100000 single premium, the person could buy up to $500000 in long term care, of collect about $166000 if the long term care was never needed. The article also suggests considering first-to-die and second-to-die policies.

The link is here. It may be necessary to have a ML account to see the article; the link will bring up the ML CMA logon screen to sign in.

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