If you’re a couple researching long-term care insurance, a decision you need to make is the length of your benefit period.
How long should you both have coverage – 2, 3, 4, 5, 6 years or even an unlimited time period?
This can be a daunting decision because we have no idea how long we’ll need care.
An option that can help lengthen your benefits is to add a shared benefit rider, which will give you a pool of benefits that you can share.
2 Ways to Share Benefits
There are two main types of shared benefit options.
The first and most common is called shared care and it allows spouses to take from each other’s individual plans. If you use all your benefits, you can dip into your partner’s half and use theirs. Any remaining benefits are still available to your spouse. For instance, instead of having 4 years for each spouse, you would have 8 years of coverage all together that either one of you can use. If your spouse needs care for two years, you’ll still have 6 years of coverage. Some companies will require you to leave the healthy spouse one year’s worth of coverage.
The second type is called shared benefit and it has a separate 3rd pool of money that either spouse can use after they’ve used up their own benefits. Under this type of policy, a person doesn’t take money from their spouse’s plan, instead they can only take money from the 3rd pool of benefits.
Insurance companies will have either the shared care with the shared pool of money OR the shared benefit with the 3rd pool of money, not both. Either way, they both allow you to get the most out of your policy by sharing your benefits and it’s a way to hedge your bets when choosing your benefit period.
Flexibility
Adding a shared benefit rider to a long-term care policy usually costs more than buying two separate benefit periods, but having this option provides flexibility and may make you feel more comfortable with buying a shorter benefit period. Also, adding the shared rider works like other long-term care insurance in that it can help pay for things like home care, assisted living, nursing home, respite care, hospice care, memory care facilities, and bed reservation.
When you apply with a spouse or partner you’re also eligible for an extra discount off your premium payments. In most states, the discount is available to married spouses and any adult partners living together for a certain number of years.
The Bottom Line
You and your partner can maximize your coverage effectively and efficiently by sharing long-term care insurance benefits.