What effect can a long-term care benefit rider have on a life insurance policy?

A long-term care benefit rider can indeed lead to a reduced death benefit on a life insurance policy. This rider allows policyholders to access a portion of their death benefit while they are still alive, specifically to pay for long-term care expenses such as nursing homes or in-home care.

When a policyholder utilizes this rider, the amount withdrawn for long-term care reduces the total death benefit that will be paid to beneficiaries upon the policyholder's death. Essentially, the policy is designed to provide financial assistance during the policyholder's lifetime, potentially compromising the benefit that heirs would ultimately receive. This feature reflects the trade-off inherent in many insurance products, where accessing certain benefits can impact the overall coverage available in the future.

Therefore, the presence of a long-term care rider can be beneficial for meeting immediate care needs, but it has the consequence of reducing the eventual payout to beneficiaries. This understanding is crucial for policyholders as they navigate their coverage options and plan for both their personal care and their heirs' financial security.