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Eight Long-Term Care Traps

Trap # 8: Not Taking Advantage of the Premium Refund Feature

Affluent clients may want to consider buying a Return of Premium benefit, which will refund 100% of their premiums to their families when they die, less any benefits received. This benefit guarantees that all of their premiums will be recovered either as benefit payments or from the premium refund. In addition, it is a hedge against premium increases.

Even though it makes sense to own long-term healthcare insurance, many of the policies are riddled with exclusions, limitations and restrictions that can confound clients. Also, most policies are written in legalese that is difficult, if not impossible, to understand. As an advisor, it's your duty to help your clients navigate the pitfalls.