Disability Income • Critical Illness Insurance • Long Term Care • Life Insurance

Hybrid Life/Long Term Care Rider Combinations

Hybrid Life/LTCi Rider policies are also designed to cover chronic illnesses. When added to Life Insurance policy, what are the differences between a 101(g) LTCi Rider and a 7702B LTCi Rider?

This Section of the Code permits a LTCi Rider benefit to be paid as a tax-free acceleration of the death benefit. Benefits are designed to be received income tax-free. Policies containing these riders have certain limitations and, in fact, they may not be presented in any way as being Long Term Care insurance. A decided drawback to a 101(g) rider, generally referred to as "Accelerated Death Benefit for Chronic Illness" is this: the condition subject to claim must be one that is non-recoverable and is likely to last for the claimant's lifetime. This non-recoverable definition may preclude benefit payments for many conditions.

This Section of the Code also contains 101(g), but takes 101(g) further. 7702B polices may be presented as Long Term Care insurance and coverage is also extended to conditions from which the insured may eventually recover. Benefits are designed to be received income tax-free.

Combinations Have Growing Appeal

Hybrid Life/LTCi Rider policies tie two very important coverage opportunities into one policy Design (Life Insurance and Long Term Care), often with a premium savings.

Hybrid Life/LTCi Rider policies help assure that someone will receive a benefit, whether it's in the form of the LTCi Rider attached to the base Life Insurance policy and/or as a death benefit associated with the base Life Insurance policy. See below under "Use-it-or-Lose-It".

Depending upon the funding level, carrier and plan design selected, a Hybrid Life/LTCi Rider policy may provide cash surrender values. If you decide you no longer need your insurance policy, you have the option to surrender the policy for its then present cash surrender value. This refund is reduced on a dollar-for-dollar basis by any Hybrid LTCi Rider benefit payments and/or by other policy benefits that may have been previously accessed, such as policy loans or partial withdrawals from the base Life Insurance policy. Single Premium Hybrid Life/LTCi Rider policies offer similar features.

Long Term Care Insurance
Long Term Care National Average Costs
Tax-Qualified "Stand-alone" Long Term Care Insurance
Hybrid Life/Long Term Care Rider Combinations
Plan Design Considerations
Elimination (Waiting) Period
Long Term Care insurance Partnership
Long Term Care Insurance in the Workplace
Paying for Care - Insuring the Risk
Paying for Care - Selling Your Life Policy
Paying for Care - Government and Personal Sources
State Filial Responsibility Laws
Long Term Care Insurance Disclaimers and Notes

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Paul SuPrise, CLU, LTCP
770 Nuangola Road • Mountain Top, PA 18707-9507
570-868-6871 • Fax 570-868-6872
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