Shared Care Riders on Long Term Care Insurance Policies

Shared care riders on long term care insurance policies are a definite necessity and a definite buy when a couple buy long term care insurance.  Shared care riders extend the policy protection by allowing the transfer of benefit monies to be transferred to a party who needs extended care and exhaust their benefits.  They also allow for the transfer of benefits if one of the parties in a couple dies without using their benefits.  There are however two different approaches in the market being sold and they have different impacts on your benefit dollars. 

Traditional shared care riders

This shared care rider which is part of industry leading Mutual of Omaha allows for the transfer of benefits if a party of a married couple or life partner couple need extended care. In this instance say one of the parties in a couple use all of their benefits due to extended need of long term care and has exhausted their benefits. They then can dip into the benefits of the other spouse to use to extend their care until those benefits are also exhausted.  In this instance the second spouse’s benefits are being depleted, and can lead to a complete use of both parties benefits.  This is becoming an increasingly big issue with Alzheimer’s and dementia patients living longer life spans through medications, and yet still needing long term care.  In this case there are only two pools of money to exhaust.  

Third pool long term care riders

This type of shared care rider is relatively new and offered by companies such as National Guardian Life.  In this scenario there are three pools of money for benefits.  If one of the parties were to use all of their benefits then they would begin to use the third pool of benefit money instead of exposing the spouse to decreased benefits.  The second spouse’s benefit pool would remain fully intact until they were to need it. The spouse who would have exhausted their first pool of benefit would then have a full second pool to use.   This essentially gives 33% more coverage for a very little amount of money.  Similar policies can be very close in premium cost while one is yielding far greater insurance protection.  

In conclusion this writer advocates that a couple in the market for long term care insurance seriously look at the difference between these two types of shared care riders which I find essential to buy for a couple who want long term care insurance.