Insurers Combine Long-Term Care And Life Insurance

Whether it is the swift hand of death or the unrelenting grip of a chronic malady, insurers are addressing those end-of-life scenarios by creating an insurance product that covers both. This is appealing to a growing awareness that living longer presents a threat to people's money supplies, firms are wrapping long-term care coverage into the old standby life insurance contracts. Congress also may stimulate demand for the combined coverage with a proposed tax deduction for long-term care insurance premiums.

Insuring against being financially ruined by a degenerative illness sounds like a good idea, but watch out: Many combo policies aren't inflation-protected and they're so new -- and complicated -- that they make comparison shopping difficult, experts say.
The attempt to cover both circumstances simultaneously stems from some sobering figures. The average cost for skilled care at a private-pay nursing home was more than $4,000 a month in 1997, according to the National Center for Health Statistics. In some parts of the country, the monthly cost can exceed $5,000 for a bare bones facility, experts say.