Hybrid Long-Term Care Insurance

Hybrid LTCI combines components of traditional long-term care insurance with life insurance or an annuity policy. It provides financial protection to clients who need long-term care, including in-home care, assisted living, or a skilled nursing care, while also offering a death benefit or cash value feature. If long-term care benefits are not fully used, the remaining value is passed to beneficiaries as a death benefit.

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Hybrid LTCI Highlights

  • Also known as asset-based or linked benefit LTCI
  • Available for individuals aged 30 to 80
  • Flexible payment options including single pay, 5 pay, 10 pay, or recurring premiums
  • Recurring premiums remain level throughout the life of the policy
  • Contains cash value
  • Policy earns growth on a tax-deferred basis
  • Guaranteed death benefits available

Tax-Deferred Growth

Hybrid LTCI earns growth on a tax-deferred basis, so the policyholder can receive a return on investment and access the proceeds tax-free to cover long-term care costs. The policy can also be funded with an existing deferred annuity, and any gain recognized on that annuity can also be used tax-free in a long-term care situation.

Guaranteed Death Benefit

Hybrid LTCI counteracts the old “use it or lose it” mentality that used to accompany LTCI. If the policyholder never requires care, a guaranteed death benefit will be paid to their intended heir(s). The death benefit is typically reduced dollar-for-dollar for any benefits paid on the policyholder’s behalf.

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