Are long-term care insurance premiums refundable if the seniors dies without needing care?


Q: If my parent has long-term care insurance, but dies without needing care, are the premiums refunded to the family?

A: No, there is no refund of premium to the family if benefits are not needed. You can buy a return of premium rider (very expensive) but its something to consider if a family is buying long-term care insurance (LTC) for their parents.

If you are thinking of purchasing LTC, there is a new type of hybrid product that combines life insurance with LTC. Many people think if you buy a LTC policy and don't use it (which may be a blessing) that you've wasted your money on the premiums. So the life insurance industry has begun to offer products that have a combined whole life insurance policy with LTC. You purchase a policy with a single or lump-sum premium. If you pass away, your heirs receive the death benefit as with a normal life insurance policy.

However, if you need LTC during your lifetime, you can draw down on the death benefit to pay for those needs. Whatever remains after you pass away still goes to your beneficiaries. The other advantage is the LTC benefit is income tax free since life insurance payouts are not taxed.

Rosanne Rogé joined R.W. Rogé & Company, Inc. in January 1995. She is a graduate of C.W. Post - Long Island University. Ms. Rogé is certified by The Certified Financial Planners Board of Standards to use the professional certifications CFP and Certified Financial Planner. She is also a Certified Senior Advisor (CSA).

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The life insurance/LTC combo plan explained here is better for those with high assets, who can afford to put $40,000 to $200,000 in to it up front. There are usually no inflation benefits, so for the younger buyer, with fewer disposable assets available, long-term care insurance may be more affordable and with 5% compounding, will provide higher monthly benefits 15-25 years from purchase. If someone uses their policy (65%+ will after age 65), the amount spent on premiums is back in their pocket within 6 months or less. See an LTC specialist who will help you decide on the best option for you
My mom had a LTC policy that she paid for for many years and never used because she went from ALF to hospice care and her policy only covered skilled nursing care at a NH, which she never needed. My options were to move her to the higher care level she didnt need at a much higher cost to get partial coverage after 90 days.....or leave her where she was and keep paying the premiums "just in case". She passed away two weeks ago and never used the coverage. My advice is to READ those policies carefully! The worst part is that her husband died in a nursing home and she didn't know about the policy....and it was through MOAA(military officers). Shame on them!!!!