For many, a viable solution to the dilemmas associated with purchasing an LTC policy is the use of a life insurance plan that offers a rider that provides Long-Term Care or Chronic Illness benefits. With this type of plan, a policyholder is able to pay for their long-term care by utilizing the provisions built into the death benefit defined in the life insurance policy.
This creates three options for using the life insurance policy. If you live, you potentially have access to the cash values, tax-free. If you die, obviously the face amount of the policy will be paid to your beneficiaries. However, in the event you need care, and can qualify for the rider to kick in, upwards of 80 to 90% of the face amount of the policy will become available as a “living benefit” for the long-term care needs – again, tax free.