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Safety Net?

Insurance companies are offering plans that move beyond traditional long-term care. But do they really protect your assets?

By Scott Bernard Nelson

Opinions expressed by Entrepreneur contributors are their own.

The glory days of long-term-care insurance--designed to protectyou from the cost of late-in-life health problems--may be a thingof the past. Insurers have hiked up premiums for many policyholdersin the past 18 months, half a dozen companies stopped selling newpolicies, and at least two exited the business entirely. Still,some companies are happy to sell traditional policies if you'rewilling to pay the freight, and an increasing number of insurersare mixing and matching long-term-care coverage with otherfinancial products to provide new options.

The most common of the new twists involves long-term-carecoverage with life or disability insurance. Variations are all overthe map, but a simple example might involve a $500,000 lifeinsurance policy with supplemental long-term-care benefits. If youdie without needing long-term care, then your estate gets the full$500,000. But if you were to spend $100,000 for long-term care inthe final year of life, the death benefit would drop to$400,000.

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