Combined Insurance Policies

More individuals are purchasing insurance policies that combine long-term-care with other types of insurance (e.g. life insurance or annuities). Typically, combined insurance policies pay long-term care tax-free from an annuity or by prepaying the policy holder’s death benefit under the life insurance contract. An individual who does not require long-term-care can recoup money paid on premiums.

Upfront premiums for these combined policies can be quite steep, however, and a couple cannot share each other’s long-term-care benefits. Additionally, businesses cannot claim tax deductions for the owner’s premium payments, and combined policies cannot qualify for partnership programs available in many states.

See Ann Tergesen,‘Combined’ Insurance Policies Grow, The Wall Street Journal, Jul. 31, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.