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Life Insurance/Long-Term Care Combos: Opportunity, but Questions on Value

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The over-60 crowd often chooses a single-pay life insurance policy with a long-term care rider over conventional LTC coverage, whether because of cost, underwriting, or other reasons. In fact, the combination is not just popular because it offers flexibility for those who cannot get LTC coverage for other reasons, but also because such policies offer a way to provide a guaranteed death benefit for a spouse while at the same time securing LTC coverage – all for a single premium – and also offer a way to protect part of an estate (the single premium) from taxes by using it to purchase that guaranteed death benefit, according to reports by NU Online News Service.

However, one factor to consider is whether the single premium that amasses the cash value will be depleted by a LTC claim. Some advisors find that it is not economically feasible, and the client would be better served by the purchase of separate LTC coverage and life insurance.