Is Hybrid Long Term Care a Diamond in The Rough?

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Hybrid Long Term Care Insurance

Many people know that there are many kinds of diamonds in the world, just as there are many forms of life insurance policies. You could say Hybrid Long Term Care Insurance is the new Red Diamond a.k.a the rarest, most sought after kind of diamond in the world. Red diamonds are created when a stone undergoes a rare process while in formation and that changes the structure and allows light to pass through the stone differently than it does with other colorless diamonds. Due to the diamonds rarity, red diamonds are also the most expensive per carat over any other colored diamond.

Many people are growing an interest in Hybrid Long Term Care products. As popularity grows so does the demand and questions as to what exactly it is. Hybrid Long Term Care Insurance is a plan that combines traditional long term care insurance with life insurance. Hybrid LTC policies pay for home health care, assisted living, adult day care and nursing home services. If long term care is not ever needed then the life insurance benefits within the policy pay your beneficiaries a death benefit amount disclosed within the policy. The life insurance benefit value is at least the equivalent of the premiums paid, if not more.

Just like there are different types of diamonds there are also different types of Hybrid LTC plans. The most common form of Hybrid Long Term Care Insurance is Linked-In Hybrid plans, which combine LTC insurance with another type of insurance such as life insurance or an annuity. This kind of Hybrid LTC accounts for the majority of long term care coverage purchased. Things such as long term care riders can also be purchased and added to the policy, but will increase the premium cost. 

Tax Advantages

The cost spent on the long term care needed is subtracted from the death benefit, while the remainder of the death benefit is not subject to any taxation. This is advantageous compared to a 401k or retirement plan which is taxed when transferred to the beneficiary if given to anyone other than the spouse.

Red Diamond

Unlike Hybrid Long Term Care Insurance, diamonds are most definitely taxed. The Red diamond is worth at least 1 million per carat and up. There is a good side to this though. If you ever go to sell a diamond ring you are only taxed on the profit made. So if you bought your ring for $500 and then sold it for $300 there’d be no taxes at all. This is because the government views the value of the ring as the fair market value at the time you purchased it. Diamonds are priced per unit of weight, called a carat. In March 2022 diamond prices moved higher by an average of 7.6% in February 2022. The average price per carat of all and any diamond is $13,101. 96 higher than $12,178.44 a month ago. The average USA diamond price is $234.85 every .25 carat currently, but these numbers often change. This price is for the average diamond and not the Red Diamond. The Red Diamond Moussaieff weighed roughly 5.11 carats and was sold in 2001 for an extraordinary $8 million dollars or (R10 billion). The Moussaieff was also known as the Red Shield and was found in the mid 90’s by a Brazilian farmer and was originally 13.9 carats. Whopping 8.79 carats was lost when the diamond was cut. Red Diamonds are mostly found in Brazil, Africa, and Australia. The most well known Red Diamond mine is called Argyle mines and is in Australia. There have also been Red Diamonds found in India and Russia. The hue, tone, and saturation determines the type and price of diamond alongside the carat size.

Final Statement

Overall it is easy to see how Hybrid Long Term Care Insurance and Red Diamonds are both so well sought after by many people. While so different they both have many aspects that draw people in and cause people to want to look further into them. Will you be looking into these subjects anytime soon? Make sure to get a good jeweler and an even better independent insurance agent. When looking into insurance an agent can be a good alley or a good salesman looking for the best sale for themselves. Make sure your agent is independent and not tied down to a specific insurance company.