How does the federal long-term care insurance differ from other long-term care policies?
The federal long-term care policy falls under the Traditional LTCi category. Traditional LTC pays a benefit when the insured cannot perform 2 out of 6 activities of daily living.
Traditional, standalone long-term care policies offer coverage only for long-term care in your home or in a specialized facility. There is no cash value in traditional LTC policies, therefore nothing goes to a beneficiary from your LTC policy upon your death. However, there may be joint options available where two spouses may share the same pool of money.
Traditional LTC are still popular, but in recent years long-term care has an innovative new choice. Hybrid policies, sometimes called combo or linked-benefit products, bundle long-term care insurance with either life insurance or an annuity.
That means if you need long-term care, the policy covers your expenses, but if you don’t need it, you’ve got other options. Depending on the type of hybrid policy you select, it will either pay your loved ones a death benefit, like a life insurance policy, or it guarantees you an income stream during retirement, like an annuity.
