The last year has seen a lot of changes in the insurance industry, courtesy of the COVID-19 pandemic. More specifically, the extended-care policies have been affected with most people now finding it difficult to qualify. The most affected group is the high-risk individuals.
About 70% of the seniors tend to need extended care down the line, however, many of these services are not offered by Medicaid, Medicare, or standard health insurance. So, if you have these kinds of coverage, chances are you need to self-insure separately in the event that you need this kind of care.
What is The Alternative?
Getting stand-alone Extended-Care insurance can be difficult, however, there is a workable alternative: hybrid policies. This type if insurance option combines your typical life insurance and extended-care coverage and has quickly gained popularity in the last one year or so.
Many people are now choosing the hybrid option over the traditional stand-alone extended-care policies. In fact, more than 250,000 hybrid policies were sold in 2019, compared to about 55k stand-alone extended-care policies.
Before choosing your type and level of extended-care or life insurance, first determine what your qualification eligibility may be and how much the cost of such coverage will entail.
A life insurance or financial expert can provide this information for you.
More about Hybrid Policy
As we have stated, a Hybrid extended-care policy is a cover that combines life insurance and extended-care policy. Just like with the standard life insurance policies, the earlier you start, the more manageable your premiums will be in the long run. Depending on the provider, a medical underwriting may be necessary to quality for this kind of policy.
The best part about the hybrid cover is that it’s more forgiving, and you may be able to qualify even if you’re not healthy enough to qualify for the traditional stand-alone extended-care coverage. Some providers may structure this policy into life insurance with a death benefit payout if you never benefited from the extended-care services. It’s not the typical “use it or lose it” kind of approach employed by most traditional life insurance policies.
Some older extended-care policies structured in the 1990s and early 2000s made a wrong assumption that only about 30% of the policy holders would use them. This resulted into restructuring, resulting in premiums that nearly doubled. With a hybrid policy, you’re least likely to run into such unexpected negative changes.
Should you go For Hybrid Policies?
Now you might be wondering if hybrid policies are worth considering or just an inferior compromise. This new policy has attracted both fans and critics. For the most part, critics are of the opinion that hybrid extended-care policies do no offer comprehensive benefits that you will get with the standalone extended-care coverage.
The hybrid version also tends to attract two sets of fees, which some detractors have frowned upon. But this a little compromise you have to make to get the best of both worlds. Let me know if you need any more details about extended-care coverage.