Universal life insurance provides much the same protection as whole life
insurance. However, unlike whole life insurance, universal life policies can
build cash value above the minimum guaranteed rate. This money grows and
accumulates on a tax-deferred basis. By earning additional cash value, the
money can be used to pay premiums in times when you may not have the funds to
pay the entire amount. In addition, just as with a whole life policy, you can
borrow against the cash value. Universal life polices are much more complicated
than whole life insurance because you can adjust the amount of insurance or the
premiums in order to create more cash value or increase the death benefit. It
is important to consult a licensed and qualified professional to determine the
best options for your future goals.
Long-Term Care Insurance
Long-term care (LTC) insurance provides benefits if a person needs
specialized care from in-home nurses, stays at a nursing home, or from assisted
living facilities. Most LTC plans pay a daily benefit to help with the costs
associated with needing these types of specialized care. It is a sad fact that most
American do not have the means to pay for their care as they become elderly.
This usually means that they are at the mercy of Medicare to meet those needs.
As anyone who has dealt with an elderly relative knows, relying on Medicare
means following their rules as to what types of treatments are covered and
when.
With LTC, more options are given to the person needing care as to when and
where they can receive that care—including in-home treatment from nurses. When
purchasing LTC, there are parts of the policy that must be considered. All
LTC polices have an elimination period. This is the amount of time that must
pass before you begin receiving benefits. For most LTC polices, the elimination
period can be as short as 30 days, or as long as 1 year. In addition, all LTC
polices have a benefit period and a benefit amount. The benefit period is the
length of time for which you will receive benefits from your policy. Many
polices have a benefit period that is around 5 years. The benefit amount is the
amount of money you will receive for each day that you need specialized care.
For most polices, the benefit amount ranges from $75 per day to $150 per day.
Finally, most LTC polices have an inflation protection rider. This rider
increases the daily benefit every year based on the cost of living. This
protects the insured from the rising cost of medical expenses during the course
of their policy. Companies that sell long-term care insurance include MetLife,
John Hancock, and Prudential.