A long-term care rider is a Universal Life Policy add-on that may cost less than you think, but you’ll be glad to have it when you need it. It’s easy to purchase as part of a life insurance policy from Erie Family Life Insurance Company.
It’s not something you want to think about, but most of us will need long-term care at some point in our lives. Your need for care may develop suddenly, brought on by a major health event like a heart attack, stroke or injuries from a car accident, or develop gradually as you age or when a chronic illness gets worse.
Planning now will give you the opportunity to protect yourself from the full effect of the high costs of long-term care. You can choose the level of care that you want with an eye toward preserving the bulk of your savings or estate, while relieving your family members of the burden of making these decisions for you at a stressful time.
It’s also important to keep in mind that private health insurance or Medicare may not pay for the long-term services that you need, so taking some time to develop a plan for yourself and your loved ones that can be enacted should the need arise is a smart financial move.
How does a Long-Term Care Rider Work?
A long-term care (LTC) rider is an optional add-on to a qualifying life insurance policy that provides financial support if you need hands-on daily care from a nurse or a health aide for long periods of time. This care can be received at your home or in health care facility.
The benefits are triggered when a licensed health professional certifies that you are unable to complete at least two daily living activities independently, such as bathing, dressing, eating, using the bathroom or moving in or out of a bed.
The coverage for an LTC rider is provided through an acceleration of death benefits on a life insurance policy. That means the payments that you receive to cover long-term medical expenses are subtracted from the amount that will be paid to beneficiaries through the life insurance policy after your death.
For many, an LTC rider is a more appealing option than a stand-alone LTC policy, which may be expensive, offer no cash value and could require more extensive underwriting.
With a Long-Term Care (LTC) Accelerated Death Benefit Rider you’ll have the flexibility to use your money for what you need.
How does a Long-Term Care Rider Pay?
You can choose a monthly benefits distribution of 2 percent, 4 percent or 8 percent of the death benefit of the life insurance policy. You can collect (as long as you meet eligibility criteria as outlined in the policy) up to the value of the residual death benefit. (The minimum payable for any month is $1,000.)
The LTC benefits are distributed directly to you and can be used for adult day care services, assisted living care, home health care and other forms of care.
The acceleration percentage does not change with payment of benefits, unless you request a change when you have a claim.