Long Term Care

 This type of long term care policy uses a multiplier (depending upon age & health) to determine how much coverage can be purchased. For example, you deposit $50,000 into this type of long term care policy and it generates a $120,000 worth of coverage in the event of needing long term care. This type of policy can work for those with idle assets in which they want the coverage but complete liquidity at the same time. 

 This type of policy is in fact a life insurance policy with a long term care rider. The insured of the policy can use a percentage of the benefit base for the expense of long term care or a certain payment for long term expenses is guaranteed. An example would be to purchase a $500,000 policy which would guarantee a monthly payment of $5,000 per month for two years for the purpose of long term care. 

 A periodic premium is associated with the policy that covers a certain payment if need be for the long term care. These are probably the types of policies that most people think of when they think of long term care insurance. An example would be that you pay $3,000 per annum for a policy that would generate $6,000 of income for the cost of long term care expenses if need be.

Each of the above ways have advantages and disadvantages. Each of them can make sense depending upon objectives and circumstances. Furthermore, each of them (and all policies) have different qualification requirements so it is important to know how you would actually qualify to receive the benefit. Some policy qualifications are very lax while others dictate what type of facility is required.