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Rayvt writes,

As I see it a LTHC policy is similar to whole-life insurance. Part of the premium is pure insurance and part of the premium goes to build up an internal cash-value to cover the eventual claim. Whole life insurance policies have a nonforfeiture clause so that you can get back some of this excess money if the policy lapses.

I believe that there are some LTC policies that are combined with whole-life coverage and allow you to pay the premium from the cash value. Don't know the details, but they may just be another way for the insurance company to skim off another large portion of the premium stream in overhead & profit.

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