Hybrid life insurance with long-term care

Many people think that long-term care refers only to nursing homes and end-of-life care, but it encompasses a wide variety of services that help with a person’s personal care over short or long periods of time. The most common type of long-term care is focused on personal care, also called activities of daily living. This includes things like bathing, dressing, eating, transferring, toileting and continence, and cognitive impairment. The goal of long-term care is to help maintain your lifestyle as you age.

People are living longer than ever. This means more years in retirement. However, living longer can come with a new set of challenges. Health care, possibly including long-term care, is expected to be one of your largest expenses and potential key risks when planning for retirement. Planning ahead can help families manage the financial, personal, and emotional challenges that may arise when loved ones need services.

To decide whether you need long-term care insurance and how much to buy, you need a sense of how much your care could cost. You can refer to the 2023 Genworth Cost of Care Survey to help estimate the potential long-term care costs in your state.

Long-term care insurance typically covers a comprehensive array of care, including in-home care if you can no longer perform everyday tasks called activities of daily living, as well as adult day care, assisted-living facilities, and nursing-home care.

Reimbursement policies require you to submit bills and receipts each month for the long-term care costs you incur. These policies specify which types of long-term care expenses are covered, and you (or the facility) will be reimbursed for the exact amount of qualifying expenses, up to the maximum benefit amount. Cash indemnity policies provide you with a monthly check for the amount you elect, up to the maximum amount of the long-term care benefit.

There are some considerations that will determine your suitability for long-term care insurance. Schedule an appointment with your Fidelity financial professional or call 866-489- 0963 to discuss options based on your personal situation.

Fidelity makes available long-term care planning solutions from Massachusetts Mutual Life Insurance Company (MassMutual), Nationwide Mutual Insurance Company (Nationwide^®), and New York Life Insurance and Annuity Corporation (New York Life).

Fidelity works with highly rated insurance providers with extensive histories of serving clients. We know that insurance can be confusing, so we’ll help you understand what option best fits your needs—not push you to make a purchase. Our professionals will work with you so that insurance is part of your overall financial plan.

Essentially, there are 4 different ways to pay for long-term care: government assistance; traditional long-term care insurance; "hybrid" insurance, which offers life insurance or annuity benefits with long-term care coverage; and personal savings. Your options depend largely on your personal and financial circumstances and what you expect for your standard of care—both now and in retirement.

The options depend on the policy design. For example, hybrid life insurance with long-term care provides value regardless of how you use it: You can use the long-term care benefit, you can use the insurance to leave a death benefit to beneficiaries if you don’t use the long-term care benefit, or you can surrender the policy for the cash value or exercise return of premium.

Depending on the policy design, by adding the cost-of-living rider when you purchase your long-term care coverage, you can make sure your benefit grows alongside inflation.

Medicare doesn't cover non-medical long-term care and covers skilled nursing facility care for a limited time if conditions are met.*

*For more information regarding benefits provided by Medicare or Medicaid visit medicare.gov Medicaid guidelines vary by state. Contact your local Medicaid office for details.

Health plan premiums are not considered qualified medical expenses (QMEs). However, any premiums you pay for COBRA continuation coverage, qualified long-term care insurance, and Medicare are considered QMEs, so you can use your HSA to pay for those premiums. Not all hybrid Life/LTC insurance premiums are considered qualified when paying premiums from an HSA. For more information, consult your tax advisor.

Life insurance can be an important part of a comprehensive financial plan and can provide your loved ones with necessary resources in their time of need. It's a good idea to review your need for life insurance whenever a major life event occurs—a new home, marriage, child, or job.

Consider working with your financial professional to explore life insurance options as part of your overall financial planning process.

Life insurance options through Fidelity come in various shapes and sizes. These include term life insurance and hybrid life insurance with long-term care.

Over the course of your life, you'll likely have a series of short-and long-term financial needs that change over time. Consider working with your financial professional to explore life insurance options as part of your overall financial planning process.

A premium is the amount you must pay for your health plan. Costs may vary depending on whom you cover. In addition to the premium, you may be responsible for paying for deductibles, copays, and coinsurance. You’ll see the actual cost of your health plan when you enroll in coverage.

A beneficiary is an individual who receives the benefit from an estate, trust, retirement account, life insurance policy, or account with a transfer on death (TOD) designation. Taking the time to choose your beneficiaries can help your family avoid probate later. Most importantly, you can feel confident that your loved ones will receive the assets you intend for them to have.

The cost of life insurance is influenced by factors such as death benefit amount, type of policy, riders, age, gender, health, tobacco use, family history, lifestyle, and occupation.

Some employers—recognizing an opportunity to attract and retain employees—have begun adding long-term care insurance to their employee benefits packages. A more common offering is disability insurance, which provides a portion of your income after you’ve been disabled for a specific period of time. Contact your employer benefits administrator to determine what benefits you may have available.

Generally, Medicare covers skilled nursing facility care for a limited time, if certain conditions are met. And most health insurance plans don't pay for long-term care.

Term insurance covers you only for a specified time period—10, 15, or 20 years. If you pass away while the policy is in force, your beneficiaries receive a payout known as a death benefit. Permanent life insurance is coverage that remains in place until you die.

Depending on the policy design, the life insurance disability rider provides the benefit of waiving off future premium payments on the main policy if the policyholder becomes permanently disabled and unable to work.