The Insurance Buying Guide: LTC and Disability Income Insurance

Another progressive use of an LTC rider is in combination with a disability income policy. Disability income insurance is designed to protect a person's most important asset -- the ability to earn an income. However, your disability income needs normally end at age 65 or at retirement, since you no longer have earned income.

How does this combination work? Here's an example: Jack, age 45, purchases a disability income policy to protect his ability to earn an income. He adds a Guaranteed Insurability Option (GIO), whereby he will be eligible to purchase units of LTC coverage ($10 to $50) at certain option dates from age 55 to 70, without the need to prove insurability. At age 65, Jack retires and "surrenders" his disability income policy for an LTC contract.

This appears to be an ideal mix of products, as the disability income insurance need terminates at retirement and, generally, the need for long-term care coverage begins.

In the years and decades to come, it would appear that the types of LTC policies offered will only be limited by the imagination of those responsible for product design to meet the LTC needs of the senior citizen.