The Insurance Buying Guide: LTC and Annuities

LTC coverage is not only being combined with life insurance policies, it is being combined with annuities and disability income insurance.

An annuity, which is designed to be a retirement vehicle, may be issued with an LTC rider in much the same way that the LTC rider may be attached to a life insurance policy. With this arrangement, the annuity provides necessary funds to help with LTC expenses. It might be said that the annuity and the LTC policy are cousins, in that annuities provide retirement income and LTC needs normally occur after retirement.

When and if needed, annuity funds will be paid to cover LTC expenses. This, of course, will have the effect of reducing the amount of money in the annuity and, consequently, the monthly retirement income may be reduced, as well.