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Life is long, and there’s a good chance that as you get older, you’ll need help taking care of yourself and your personal needs. Unfortunately, getting the care you need can be expensive, and many Americans simply won’t be able to afford it. Fortunately, there is a product you can pay into now that will be there for you down the road – long-term care insurance.
Long-term care insurance it works like any other insurance product; you pay premiums now in exchange for reimbursement at a later date that can be spent on various long-term care needs. Some services that long-term care insurance will cover include nursing, physical therapy, nursing homes, and even hospice care.
When you buy a long-term care insurance policy, there will likely be optional riders you can attach to your coverage. Some of these riders may be a good idea, but it’s important to know exactly what’s available to customize your policy.
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5 popular long-term care insurance policies
Before choosing which long-term care insurance to use, it’s important to know how each one works. Make sure you take your time and consider each one and if it is makes sense for your situation. Remember that each rider will increase the cost of your premium, so pay attention to how much you can afford to pay every month.
Anti-bloat rider
Ann inflation protection rider protects you from the prospect of rising costs that may occur between the time you buy your policy and the time you use it. If current trends continue, the cost of these services may have risen significantly. This rider will increase your benefit payout by a small percentage, usually between 1% and 5%, each year.
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Spouse benefits rider
This rider allows you and your partner to combine your benefits together. This means that if one partner ends up using all of their benefits before the other partner, the first partner can start dipping into the other pool of money. Also, if one partner dies before the other, the surviving partner can use any unused benefits of the partner who died.
Rider with survival benefits
This is another rider that can be a good deal for married couples. Essentially, this means that if one partner dies after more than ten years of paying premiums, as long as neither couple uses any benefits, the surviving partner does not have to pay premiums for the rest of their lives. This is a particularly popular rider among younger couples who may not need the benefits as quickly.
Return of premium rider
Return of premium riders allow the family of a policyholder to receive their paid premiums after the insured person dies, provided certain conditions are met.
For example, one type of return of premium rider returns the premium to a person’s survivors if they do not reach age 65. Others return it regardless of age, but some only cover the difference between premiums paid and benefits claimed. Generally, the more likely the premiums are returned, the more expensive the rider will be.
Cash Benefit Rider
The cash benefits rider allows you to take some of your long-term care insurance benefits in the form of cash instead of direct payments to service providers. While in theory you can use these cash benefits for anything—even something completely unrelated to long-term care—the purpose of this rider is to help you pay for services that may not be covered by your insurance.
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The bottom row
Long-term care insurance is a good idea for anyone who is worried about being able to pay for the care they need as they get older. Although the product is relatively simple, there are a number of optional riders that potential users should consider when purchasing a long-term care insurance policy. Make sure you weigh the potential benefit of the rider against the monthly cost when choosing which riders to buy.