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Life Insurance Coupled with Long-Term Care Coverage

Life Insurance Coupled with Long-Term Care Coverage

May 16, 2023

As you navigate the complexities of planning for the future, insurance products have become increasingly sophisticated to address a variety of needs. One solution we suggest for clients who are aging and looking to secure or change their life insurance coverage is to consider the benefits of a hybrid plan that includes long-term care benefits.

Combining the benefits of both life insurance and long-term care, a hybrid policy can offer individuals and families a comprehensive and flexible approach to protecting your financial well-being.

What does a hybrid policy offer?

  • Long-term care coverage: If you need long-term care due to a sickness or life-threatening event that leaves you disabled, you can use part of the policy’s death benefit to help pay for medical and non-medical expenses related to care, including home assistance care or assisted living.
  • Life insurance benefits for loved ones: Unlike traditional long-term care policies, if you never use the policy’s long-term care benefits, your loved ones will receive the death benefit in full when you pass away. If you do use the policy’s long-term care benefits, loved ones can get a portion of the death benefit. 

What Happens If I Don’t Need Special Care Before I Pass?

If long-term care benefits are not used, the hybrid life insurance policy still provides a death benefit to beneficiaries. This ensures that loved ones are financially protected, allowing them to cover final expenses, outstanding debts or simply maintain their standard of living after the policyholder's passing. The death benefit can be a tax-free lump sum, providing additional peace of mind to policyholders and their families.

Additional Benefits

The policy can work as an estate planning tool. Hybrid life insurance policies that also offer long-term care coverage can serve as an effective tool for estate planning. These policies not only provide a partial or full death benefit to your loved ones, but the death benefit is also usually exempt from income taxation. Moreover, the long-term care coverage can help mitigate the financial impact of care costs, which may otherwise diminish your financial assets earmarked for your heirs.

Rest easy at night knowing you won’t need to dip into your retirement savings. With long-term care coverage included, you can rest easy knowing that it's there if you need it. This way, you won't have to worry about draining your retirement savings to cover care costs for yourself or a loved one.

Say goodbye to paying premiums forever. With hybrid life insurance policies, you have flexibility when it comes to paying premiums. You can choose to pay for the policy in full upfront or opt for a multi-pay plan. With the latter, your premiums can be spread over several years, allowing you to achieve your financial goals without straining your budget.

It's important to remember, however, that not all hybrid policies provide the same level of coverage or financial security, so it’s critical to consult our team so we can evaluate your insurance needs, conduct research and compare policies before making a purchase.

At Scafa Financial Services, LLC, we take an integrated approach to financial planning. For more information, visit or give us a call at 609-750-0002, and we’ll begin helping you, your family, or your business today.