There are basically
two ways how to finance a LTC policy through a life insurance plan. Interested
policyholder may either use life settlements or the accelerated death benefits
rider. Though these options may be the last resolves into finding ways to fund
long term care, they are still worth looking at especially if the insured has
waited too long and was denied coverage for long term care.
Accelerated
Death Benefits
With this
insurance rider, the policyholder is allowed to receive cash advances against
his death benefit in case he is diagnosed with a terminal illness. In order to
qualify and start receiving benefits from this rider, the insured must be
diagnosed with a terminal illness, as stated by the Interstate Insurance
Product Regulation Commission. The insured must be terminally ill, with death
expected within the next 24 months or less.
Other situations
where the insured may be qualified for benefits include:
- · If he or she has to undergo major organ transplant· He or she needs to be in continuous artificial life support· Have a medical condition which requires permanent confinement in an institution· Be diagnosed with an illness that, without treatment, would result to a limited life span· A demand for long term care assistance, especially with activities of daily living, such as eating, dressing, bathing, toileting.
Beneficiaries of the insured can still get
cash benefits in the time of death of the insured. These will be reduced
amounts based on the pre-determined percentage of the life insurance contract,
which usually ranges from 25 percent to 95 percent.