Long Term Care Insurance Riders

Long term care insurance comes with optional add-ons that allow you to customize coverage. These typically come with an additional cost. In this article, we will go over some common long term care insurance riders and what they can accomplish for you.

Inflation Protection

The first long term care insurance rider is for inflation protection. This rider increases your benefit amount each year to keep pace with inflation. You choose a fixed percentage for it to rise by, either 3, 4, or 5%. There are two ways your inflation protection is calculated, simple and compound interest. Simple interest is going to add a fixed dollar amount each year. Whereas compound interest increases your percentage based on your current benefit, creating a snowball effect. It will significantly grow your benefit amount over time.

Shared Care/Spousal Rider

A shared care of spousal rider allows partners to pool their long term care benefits. That way if one person uses up all their benefits, they can utilize their partners’ benefits. Additionally, if one partner passes before the other and they were unable to use their benefits, their unused portion transfers to the surviving partner with no additional cost.

Waiver of Premium

A waiver of premium rider kicks in once you start receiving long term care benefits. It stops the need for premium payments without the risk of your policy lapsing. It is important to note that you will still be subject to a waiting period, usually around 90 days, and you will have to satisfy the disability definition of your policy. During the waiting period you will still be responsible for premiums, but they may be refunded.

Nonforfeiture Benefit Rider

This rider will protect your policy from lapsing if you become financially unable to pay the premiums.

Choosing Your Long Term Care Insurance Riders

If you are not sure which long term care insurance riders are best for you, meet with a qualified insurance agent who can help you decide what will work for your situation.

Questions? Want to schedule an appointment? Contact us by clicking here.