LTC insurance is important for a number of reasons. But what motivates most people to buy this policy is the fact that they don’t want to be a burden to their families. However, most people still don’t purchase this policy because of financial reasons. If you have a spouse or a domestic partner, this insurance policy is even more imperative to have for you. And the good news is couples can find this policy more affordable, thanks to the shared care rider.
What is a Shared Care Rider?
A shared care rider is an additional feature that couples can add in their individual long term care insurance policies. This is optional, but it is highly recommended as it can help them save money in terms of long term care coverage.
How Does it Work?
When you have a shared care benefit, you are added as a rider to your spouse’s policy. Meaning, you can use your partner’s long term care coverage and vice versa. In case you used up all of your benefits, you can tap into your partner’s coverage instead of signing up for a new policy—which is definitely more expensive. Add the fact that qualifying for a policy may not be as easy as before because first, you got older and second, you might have already developed medical conditions.
A shared care rider pools all your benefits together. Say, each of you has a long term care insurance plan that has a daily benefit of $200 and benefit duration of 5 years. That gives you 10 years worth of benefits—around $700,000—to work with. If you already used up all of your benefits, you can use your partner’s coverage so that your care expenses will be paid continually without having to sign up for another policy.
The Advantages of Having a Shared Care Rider
Savings are the main advantage of having a shared care rider. That’s why couples should take advantage of it.
This rider allows both partners to access coverage amounting to twice of what’s actually written in their policy. With the example above, we can see that if a couple purchases a shared care rider, they only pay for a 5-year policy yet they have access to 10 years worth of benefits.
A shared care rider usually adds 12% to 18% on top of the policy’s cost, but this extra amount is still cheaper as opposed to buying two individual policies that will last for 10 years each.
In addition, the validity of the shared care rider will not expire even if one spouse dies. The surviving spouse can still use what remains of the other’s benefits. In some instances, insurers may charge a percentage of the deceased spouse’s premium so that the surviving partner can utilize the remaining benefits.
Major life changes such as getting married or being in a committed relationship call for adjustments in how you manage and secure your finances. This is usually the time when the need for long term care insurance is greater. And it’s good to know that couples can have an extensive coverage even if they’re living on a budget.