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Life Insurance From a Different Angle

Life Insurance From a Different Angle

June 04, 2024

When most people think about life insurance, it’s usually in the context of providing financial security for their loved ones in case of an untimely death. For many married couples with kids, term life insurance is the go-to solution. It’s affordable and offers peace of mind knowing that if the worst happens, the surviving spouse and children will have money to live on. However, there's an important aspect that many overlook: the potential need for long-term care in the future. 

The Reality of Term Life Insurance 

Here's how the typical life insurance journey goes: 

  1. Purchase Term Life Insurance: Couples buy term life insurance to cover the financial needs of their family in case one parent dies prematurely. 
  1. Save for Retirement: Over the years, they save money, contributing to retirement funds and securing their future. 
  1. Children Grow Up: The kids go to college, eventually leaving the nest. 
  1. Retirement Concerns: As retirement approaches, new worries arise, particularly about having enough money to enjoy retirement and potential long-term care needs. 

The Long-Term Care Dilemma 

The statistics are daunting. According to recent data, 70% of people aged 65 or older will need some form of long-term care during their lifetime. The cost of this care is significant and continually rising. For instance, in New Mexico, the average cost of assisted living is over $50,000 per year, while nursing home care can exceed $100,000 annually. 

Timing is Everything 

Unfortunately, many people wait until their 60s to start considering long-term care insurance. This delay can be problematic: 

  • High Decline Rates: 30% of applicants aged 60-64 and 47% of applicants aged 70-74 are declined for coverage due to health reasons. 
  • Increased Costs: The cost of long-term care insurance rises significantly the longer you wait to purchase it. 

A Smart Solution: Hybrid Long-Term Care Policies 

Here’s where a proactive approach can make a significant difference. Hybrid long-term care policies, which combine permanent life insurance with a long-term care rider, offer a compelling solution. These policies allow you to use part of the death benefit for long-term care expenses, effectively covering two bases with one policy. 

Why Hybrid Policies Make Sense 

  1. Early Purchase Advantages: By buying one of these hybrid policies when you are young and healthy, you lock in lower premiums and ensure coverage regardless of future health changes. 
  1. Dual Purpose: These policies provide both a death benefit and long-term care coverage, adapting to your changing needs over time. 
  1. Flexibility: After your children are independent, your need for term life insurance decreases. However, the need for long-term care coverage and permanent life insurance persists. 
  1. Cash Value Access: Many hybrid policies build cash value, which can serve as an emergency fund or opportunity fund, providing additional financial flexibility. 

Making the Transition 

Consider this strategy: 

  • Maintain Term Life Insurance: Continue with your term life insurance policy to cover the bulk of your life insurance needs while your children are young. 
  • Invest in a Hybrid Policy Early: Purchase a hybrid long-term care/life insurance policy while you’re still young and healthy to secure better rates and ensure coverage. 
  • Adjust Coverage Over Time: As your need for term insurance diminishes, you can rely more on your hybrid policy for both life insurance and potential long-term care expenses. 


Planning for the future isn’t just about covering immediate needs; it’s about anticipating the possibilities that lie ahead. By integrating hybrid long-term care policies into your financial plan early on, you can provide comprehensive security for your family, ensuring that you are covered no matter what life throws your way. Don’t wait until it’s too late—consider a hybrid policy today to safeguard your tomorrow. If this is something you want to discuss, feel free to reach out to me HERE. As always, thanks for reading.  KB