There recently was an article in the Wall Street Journal “Combined Insurance Policies Grow” addressing the cost differential between purchasing straight Long Term Care Insurance (LTCi) and Long Term Care Insurance as a rider to a Life Insurance policy. Everyone including myself loves the idea of having a Long Term Care Policy available if you need it and a full refund if you don’t. Only catch is nothing is free, especially a full refund!
When actuaries price life insurance they use mortality statistics. Long Term Care actuaries use morbidity statistics. When you put these 2 actuaries in the same room pricing a product for mortality and morbidity (plus a cushion of course) the cost increases.
So bottom line, as much as I love the concept of Long Term Care Insurance as a rider to life insurance I find it rarely pencils out in favor of the insured, my client. Exception – If you already have an existing life insurance policy with cash value that can be transferred tax free to another life insurance policy with the LTC rider this may be the right solution.