How does a shared-benefit rider for long-term-care insurance work? How much does it cost?
A shared-benefit rider gives you and your spouse a pool of long-term-care benefits to split between the two of you. Instead of a three-year benefit period for each of you, for example, you’ll have a total of six years of coverage that either one of you can use. If your spouse ends up needing care for two years, you’ll still have four years of coverage to use yourself. (The rules are slightly different with some insurers.)
When buying long-term-care insurance, a big unknown is how long you may need care. The average nursing-home stay is about three years, but some people need care for much shorter periods, and others with a condition such as Alzheimer’s disease may need care for much longer. It has become very expensive to buy a policy with coverage for more than five years – and nearly impossible to find ones offering lifetime benefits. Adding a shared-benefit rider to policies you and your spouse own can help you hedge your bets when choosing policies with a shorter benefit period.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A shared-benefit rider can add from 15% to 30% to the cost of your policies. A 55-year-old couple who buys separate Genworth policies that pay $150 per day for three years with a 3% compound inflation adjustment would each pay about $1,350 per year for the coverage. Adding the shared-benefit rider (for a shared pool of six years) would increase each spouse’s premiums by about $300 per year – a 22% surcharge. The shorter the pooled benefit period, the higher the cost because you’re more likely to use the extra coverage.
For more information about buying long-term-care insurance and other ways to plan for these potential expenses, see our Long-Term Care Insurance special report.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Credit Report Error? They All Mattercredit & debt Don't dismiss a minor error. It could be the sign of something more serious.
-
Insurance for a Learning Driverinsurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
-
529 Plans Aren’t Just for Kids529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
-
When to Transfer Ownership of a Custodial Accountsavings Before your child turns 18, you should check with your broker about the account's age of majority and termination.
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
-
When It Pays to Buy Travel Insurance
Travel Investing in travel insurance can help recover some costs when your vacation gets ruined by a natural disaster, medical emergency or other catastrophe.
-
What Travel Insurance Covers When Planes Are Grounded
Travel Your travel insurance might help with some costs if your trip was delayed because of the recent grounding of Boeing 737 Max planes.
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
