How Couples Can Share Long Term Care Benefits

Q: How does a shared-benefit rider for long term care insurance work? Does it cost more than regular coverage?

A: One of the big unknowns with long-term-care insurance is predicting how long you’ll need benefits. Although the average need for care is about three years, you might die before needing any care or you could have a long-lasting condition, such as Alzheimer’s, and receive care for much longer. Getting a shared-benefit rider with your spouse is a way to hedge your bets when choosing your benefit period.

Instead of two separate benefit periods, a couple has a pool of long-term-care benefits to split. For example, rather than having three years for each spouse, you may have a total of six years of coverage that either one of you can use. If your spouse needs care for two years, you’ll still have four years of coverage.

Adding a shared-benefit rider to a LTC policy generally costs more than buying two separate benefit periods, increasing the cost by about 16 percent for a three-year benefit period — six total years of coverage for a couple — and 10 percent for a five-year benefit period, says Claude Thau, a long-term-care insurance specialist in Overland Park, Kan. But having the shared benefit may make you feel more comfortable with buying a shorter benefit period.

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By Kimberly Lankford, Kiplinger's Personal Finance

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