A “hybrid policy” is a just that: a mix of standard life insurance policy with long term care benefits. Basically, in exchange for a hefty upfront investment, a consumer purchases an amount of long term care coverage. If long term care is not needed, the policy has a death benefit payable to the consumer’s heirs, which is usually the value of the initial investment. Hybrids usually offer a lower level of underwriting and a level premium as well. If long term care is required, the death benefit component is reduced. As with traditional long term care policies, a consumer could purchase a rider for inflation adjustment to insure against the risk of rising health care costs.
There are two points worth noting about current traditional long term care insurance products. Premiums are now gender specific; females pay a higher rate than males due to the higher probability of women living longer and more likely to file for benefits. Premiums for long term insurance can also go up based on the insurance company’s claim paying experience. While the premium quoted is fixed for now, it will likely go up