Should You Terminate Term Life Insurance for Long-Term Care Insurance?

Agent talking to prospectsIs it a good idea to terminate a term life insurance policy and use the money to buy Long-Term Care Insurance? This was the question a healthy individual, age 65, who is planning to work full-time until 70, and has a wife age 55, asked.

Term Life Insurance is one of the cheapest ways to ensure maximum financial protection for your dependents. It would not be ideal to terminate term life Insurance, as his goal is to provide financial protection to his wife in the event of death.

Long-Term Care Insurance would help in paying for assistance, if he becomes chronically ill or disabled, and requires assistance with activities of daily living. The premium will depend on various factors such as age, current health condition, the limits of benefits chosen, etc.

Long-Term Care Insurance should be bought considering the affordability to pay the premium even after retirement. If the premium payment becomes unaffordable and he stops paying the premium, the policy terminates, and all benefits accrued will be lost.

The decision to buy Long-Term Care Insurance should be based on his income, expenses and other finances before and after retirement. Also, family longevity and other health concerns are to be kept in mind.

Younger individuals have an alternative that is more flexible and can relatively be more affordable than Long-Term Care Insurance. That is buying a Whole Life Insurance Policy, with a Long-Term Care rider.

Whole life policies are costlier than the Term Life Insurance, but they have a savings element added to the insurance benefit. It builds cash value for as long as you pay the premiums. The Long-Term Care rider is a relatively cheap add-on when compared to a standalone Long-Term Care Insurance policy. It should be considered carefully, as the benefits available under the rider may be less restrictive.

Proper planning is needed when it comes to your future financial health. To get the facts and understand all the options available based on your own unique needs; fill out the form to the right to download your long-term care insurance planning guide today.

The information is free; the results could pay you hundreds of thousands of dollars when you need it most.