You value your freedom and independence, and you want to maintain them for as long as you can. However, you know that an unexpected accident or illness can jeopardize that freedom and independence.
Your health insurance policy won’t cover long-term care costs and government funding falls short, as well, with only limited financial support coming from Medicaid. Plus, in order to qualify for that support from Medicaid, you must deplete the vast majority of your assets.
Are you financially prepared to cover the expenses of long-term care should you become ill or disabled, or need special medical treatment as you get older?
What is long term care?
According to Medicare.gov, the official US Government Site for Medicare, long term care is “a range of services and support for your personal care needs. Most long-term care isn’t medical care. Instead, most long-term care is help with basic personal tasks of everyday life, sometimes called activities of daily living.”
What is a hybrid long term care rider?
A hybrid long term care rider is added to a life insurance policy to cover the cost for help with activities of daily living.
How does a LTC rider work?
Adding a Long Term Care Rider to your life insurance contract can help give you the additional financial protection you need. In the event you need long-term care, this rider can help pay qualified long-term care costs.
Pekin Life Insurance Company’s Long Term Care Rider is specially designed to help pay for long-term care expenses when there is a need for special care at adult day care centers, assisted living centers, nursing home facilities, or even at home by giving you access to your life insurance policy’s death benefit to help pay for these services. If you never do need long-term care, your policy’s death benefit remains in place for your beneficiaries.
How Long Term Care Riders work
Our Long Term Care Rider allows you to designate a portion of your insurance death benefit ($50,000, $100,000, or some other amount not to exceed your face amount or $350,000, whichever is less) to serve as a pool of money to pay for long-term care expenses. Once you have incurred any qualifying long-term care expenses, we will reimburse your out-of-pocket costs up to a maximum payment of $17,500 per month, up to a total payout of $350,000.
By adding Pekin Life Insurance Company’s Long Term Care Rider to your life insurance contract, you can maintain your independence while you are living and, in the event you do not require long-term care, we can help protect your family and/or business after you are gone, providing money to cover final expenses, uncovered medical and nursing home costs, and estate taxes.
FAQs about long term care riders
Will receiving benefits under the rider change the death benefit of my life insurance policy? As you draw your long-term care benefit payments from your pool of money, your death benefit and the other values in your policy are being reduced each month. Depending on how long you draw benefit payments and on what percentage you elected for your pool of money, your death benefit may eventually be eliminated. But because your estate isn’t depleted to pay for your care, more of your estate will be left for your beneficiaries.
Can I receive long-term care benefits if I’ve already received part of my death benefit as an advance due to terminal illness? Yes, although your benefit would be adjusted slightly by the amount you have received due to terminal illness.
If I need long-term care benefits, when will they begin? You can begin receiving benefit payments after 60 days of continuous care. You must be deemed chronically ill by a licensed health care practitioner and be unable to perform two or more Activities of Daily Living (ADLs) either as a result of illness, injury, advanced life, or upon diagnosis of a reduction of mental capacity.
Does the rider cover Alzheimer’s Disease? Yes. We will pay benefits for Alzheimer’s Disease and other brain disorders without any requirements for demonstrable organic disease
What is the maximum long-term care benefit I can receive? You can draw up to 100% of the actual dollar amount you specified for the benefit, to a maximum benefit of $350,000, minus any policy loans and previous withdrawals.
Where must care be provided in order for me to receive long-term care benefits? Care must be provided in a long-term care facility, an adult day care center, a hospice, an assisted living facility, or at home by a home health care agency.
If I already have long-term care insurance, should I replace it with this rider? Only you can make that decision. You should remember that this rider’s benefits are paid as a percentage of your life insurance death benefit and are not based on the actual costs of long-term care. These benefits will help you pay long-term care expenses, but may not cover them completely. You should examine your benefits carefully before making any replacement decisions.
Are the Long Term Care Rider benefits subject to federal income tax? Whether or not you’re liable for taxes on your long-term care benefits depends on how the IRS interprets portions of the applicable tax code. This rider is intended to be a federally tax-qualified traditional long-term care insurance contract as defined by the tax code. You should talk with your tax advisor if you’re concerned about the impact of taxes.
How much does the Long Term Care Rider cost? That depends on a number of factors, including your age, health condition, and the amount of coverage you are requesting. Most individuals find that the cost for the rider is very reasonable in relation to the overall cost of their life insurance contract.
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