Buy Cheap Long Term Care Insurance

Health care insurance premiums take the biggest bite out of most people's incomes. Adding in the cost of a long term care policy just isn't possible for most of us. Though people have tried other ways to finance these types of policies such as private funding and reverse mortgages, they have not had much success. Do we have any other options?

One possible alternative is Life insurance. To fully appreciate how this works you must understand how life insurance works. The most basic kind of life insurance is term life insurance. Your life is insured for a period of time such as 10 or 20 years. If you die the policy pays your beneficiaries. The policy does not have any worth other than that specific circumstance i.e. there is no cash value.

Permanent insurance, a kind of life insurance where there is a cash value has four variations - whole life, universal life, variable life and variable universal life. Whole life insurance involves paying the same premium each month and part of the premium is invested so that you accumulate some savings you can borrow against or receive if you cash in the policy. Universal life is a combination of term insurance and savings account but the difference here is you can change the amount of your life insurance. Your premium varies according to the amount of life insurance you have.

Variable Life insurance the third type of permanent life insurance gives you a greater range of choices in where to invest your money. Your death benefit depends on how well you choose your investments though there is generally a minimum death benefit. Your premium payment will remain the same. Variable universal life insurance allows you to change the amount of your death benefit and premium.

One of the alternatives to long term care insurance is to use a viatical settlement firm.A viatical settlement company can purchase your life insurance while you are still living. The settlement firm will get the money from your policy when you die and so they pay the premiums. You receive a single payment for the value of your policy while you are alive that you can choose to use for long-term care needs.

The amount that you receive from a viatical settlement company is usually 10 to 50 percent of the actual value of the policy. The amount of money you get depends mostly on your life expectancy - the shorter your life expectancy the more money you get. Insurance experts recommend that you check with your agent regarding viatical settlement firms. Only about half of the states regulate viatical settlement companies. Even in the states that do regulate there are "bad" companies who will try to cheat you.

Another possible alternative to long term care insurance is accelerated death benefits. This is a provision that a permanent life insurance policy may have which helps in providing money to help pay for long term care. The benefit of this arrangement is that if you do not require a nursing home or in home care the policy still has a death benefit. With a conventional long term care policy if long term care is never required the money paid in premiums is gone.