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Hybrid Life Insurance Could Be Just What You Need


If you have managed to save any money for retirement, you must know enough about personal finance to know that being insurance poor is a mistake.  If you have not retired yet, then the biggest decisions about how to spend your retirement, such as whether to stay in the Washington DC area or move to the Sun Belt and whether to retire at age 65, 70, or somewhere in between, can wait.  You should, however, pay for insurance that you will not need for many years, because insurance policies designed for use in old age are less expensive the younger you are when you buy them.  Long-term care is so expensive that buying long-term care insurance is almost always worth the cost, even if you are planning on aging in place, especially if you buy the policy while you are still young enough and healthy enough to remain in the workforce.  Is it worthwhile to buy life insurance when you are old enough to get unsolicited correspondence from the AARP?  The best option could be to cover all your bases by buying one policy that includes both death benefits and long-term care benefits.  A Washington DC estate planning lawyer can help you with the less glamorous decisions about planning for retirement, such as which insurance to buy.

Should You Buy Life Insurance, Long-Term Care Insurance, or Both?

Life insurance policies guarantee your closest relatives (or anyone else you have chosen as beneficiaries) a guaranteed lump sum of money that does not need to go through probate.  It is a good investment because the premiums are low relative to the payout amount, especially if you buy the policy when you are young.  If you have other non-probate assets, such as payable on death accounts, then you might not need a life insurance policy.

Everyone needs long-term care insurance coverage, because the costs of long-term care are prohibitively expensive for all except the wealthiest people, whether you choose home health aide services or residency in an assisted living facility.  Your family members who must provide your care or pay for the services of your professional caregivers will bear the financial burden, and the fact that you have listed these same family members as beneficiaries of your life insurance policy is cold comfort.

One of the least expensive ways to get both long-term care coverage and a death benefit payout is to buy a hybrid life insurance policy.  If the policyholder dies without ever needing to use the long-term care coverage, the beneficiaries get the full amount of the death benefit.  If the policyholder uses the long-term care benefits, then the death benefit payout amount decreases each month.  The death benefit amount usually reaches zero five years after the policyholder starts using the long-term care benefits.

Contact Tobin O’Connor Concino P.C. About the Less Glamorous Parts of Estate Planning

An estate planning lawyer can help you make decisions about the more mundane parts of estate planning, in addition to the fun parts, like retirement travel and being generous to the people you love.  Contact Tobin O’Connor Concino P.C. for help.



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